Tax credits could take sting out of health insurance premiums

Source: Detroit Free PressSept.self storage 19--One word: affordable.If nothing else, that's what the executive director of the United Health Organization, a health outreach nonprofit, wanted the crowd at Second Ebenezer Church to take away -- that single adjective.Here at the massive Detroit church on Dequindre, many congregants -- like thousands of Michiganders, from poor people to those with above-average incomes -- will be able to save thousands of dollars off health insurance policies when the Michigan Health Insurance Marketplace opens Oct.1.Affordable. It's arguably the most audacious consumer feature of the 2010 Affordable Care Act, which mandates that nearly every person must have health coverage by Jan. 1. That coverage can be purchased on the marketplace, also known as the state exchange, where policies might be more affordable, or it can be bought from an insurer not on the exchange. People who don't buy coverage and don't fit into an exemption will face tax penalties.-- Full coverage: Affordable Health Care ActSo, as enrollment begins, many people want to know: How affordable will coverage be?Thirteen insurers will offer policies on the state's exchange to an estimated 1.4 million Michiganders who are underinsured or uninsured because they don't have access to minimal, affordable coverage.They won't have to buy a policy on the exchange, but purchasing insurance through the exchange could mean big savings in the form of tax credits.One analysis by the Kaiser Foundation, a respected California-based health policy research nonprofit, estimates that the average American family could shave about $2,700 off the sticker price of a policy bought on the exchange, reducing total costs by about one-third. The figure depends on many factors, including the price of the policies on the exchange.Michigan will release details of its policies and pricing on Oct 1."The important word for me is 'affordable,' " UHO's Ifetayo Johnson told about 100 people at Second Ebenezer.They had gathered a bit earlier than usual for Bible study on this night to find out more about the exchange, scribbling on notebooks stacked on their Bibles.The theory behind requiring everyone to buy health coverage is to expand insurance pools to balance the costs of older, sicker policyholders with younger, healthier policyholders who don't go to the doctor as much. That, along with less-expensive preventive care to hold expensive chronic conditions in check, will shrink the stress on the health care system that each year is forced to treat patients who have no way to pay -- the "uncompensated care" patients, health reform advocates say.Nearly everyone who does not have employer coverage or Medicare must participate in some way.Even those on Medicaid, the publicly funded insurance for poor people, may access it through the exchange. They can determine their eligibility starting Oct. 1, although coverage under Medicaid expansion doesn't kick in until April 1.There are opponents to the law.In Washington and in Lansing, they say the law is an unprecedented federal reach and it will only expand a broken, overloaded system full of waste and fraud.The law is proving a tough sell on the street sometimes, too.Although many are thrilled at the prospect of insurance, they are doubtful that their checkbook can handle it, said Madiha Tariq,who coordinates outreach efforts for the Dearborn-based Arab Community Center for Economic and Social Services, or ACCESS."People don't believe the affordable part of the Affordable Care Act," she said.People like Robert Schuster, 57, and his niece Karene Stinson, also 57.Stinson had worked in a parts factory for 17 years before it closed down in 2009. She got a certificate in medical billing, but says she hasn't been able to find a job close enough to home.And Schuster, who lives with his niece, said he'd been healthy for most of his life, but the pain from standing at his long迷你倉ime job as a dishwasher -- a pain that starts in his hip and radiates to his back and arms -- seems ever-present these days. Plus, a doctor at a free clinic recently found a growth in his neck, but without any insurance, Schuster said he hasn't been able to get more exploratory tests.On Oct. 1, Stinson said she'll log onto the exchange to check out options for herself and her uncle. But she's skeptical."What's so crazy is that they tell you that Oct. 1, you have to have this (insurance). But what happens if you can't pay it?" she said.Advocates for the law say the point of health reform is to put insurance within reach of everyone.Expanded Medicaid, something narrowly approved by state lawmakers last month under federal health reform, opens up the program to Michiganders up to 133% of the federal poverty level. In 2014, an individual with an income less than $11,490 or a family of four with an income less than $23,550 will be considered to be living in poverty. The program had mostly covered children, disabled people and the poorest of poor people, often leaving out childless adults, for example.Stinson and her uncle will be able to determine immediately whether they'll be eligible for Medicaid when they log on. If they're not eligible, they'll be directed to apply for federal credits to shrink their monthly premium payment or their deductibles and co-pays when they access care."I'm going to try to be as positive as I possibly can," she said.Tax creditsNeither the state nor the insurers will release details of the approximately 150 policies that will be available before Oct. 1, so it's unclear how much Michiganders would save if they purchase coverage on the exchange.But even families with significant income will be able to get help. For example, a family of four living anywhere in the U.S. making up to four times the federal poverty limit -- or $94,000 -- will get tax credits to offset the sticker price of premiums on the exchange.And those who fall below 250% of the federal poverty line -- if that same family of four made less than $58,875 -- also would pay less in deductibles and co-pays when they see their doctors.The Kaiser Family Foundation has used projections from the Congressional Budget Office to create a calculator for consumers to get an idea of how much help might be available.Using a hypothetical plan that would cover about 70% of medical costs -- considered a benchmark plan on an exchange -- Kaiser analysts concluded that the average premium for a 40-year-old making $30,000 a year would be $3,857 a year, and that tax credits of about $1,345 would reduce the cost to $2,512.To be clear, not everyone will save money.Consumers who are young and healthy and carry bare-bones insurance most likely will pay more.Even those bare-bones policies must carry 10 essential benefits, such as prescription drug coverage and hospice care. That means more coverage, yes, but it also means more cost.The uncertainty leaves a lot of people guessing and worried."It's the question everyone asks: How does this shake out for me?" said Thomas Berry, a retired Detroit police lieutenant.Detroit's bankruptcy has plunged retirees' health care into doubt. Under a recent plan by emergency manager Kevyn Orr, the city would eliminate traditional health-care benefits for retirees under 65 and instead kick in $125 a month to help them pay for premiums for policies they buy on the exchange.It's a constant in the conversation when Berry golfs with other retirees on their weekly league.He tries to laugh when he can."After golf it used to be, 'Did you shoot a bogey or double bogey?' Now it's 'How much do you think we're going to have to pay for that hearing aid?' or 'How much do you think we're going to have to pay for that cholesterol medicine?' 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