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State health exchange improves, but fed. system hinders results

(Nov. 29, 2013) Providing health insurance is like running from a bear – you don’t have to be the fastest, just faster than the other guy.

On the scale of inconvenience to outright debacle, Maryland’s online health insurance exchange system appears to now be more of the former, at least compared to the continuing disaster that is the federally-managed website.

“We’re probably getting 60 to 70 percent of our applications through the first time,” said local insurance broker Chris Keen of Keen Insurance. “I’ve got 50 people with approvals right now, and we’re probably getting three to five new people enrolled each day.”

For at least the first two weeks following its Oct. 1 launch, however, virtually no applications were getting through the Maryland Health Conection. But according to the latest data from the U.S. Department of Health and Human Services, 10,917 applications for insurance have now been received via Maryland’s health exchange through Nov. 2.

The linchpin of timely enrollment, however, appears to be whether or not an applicant actually has to go through the federal government at all. The cost to exchange subscribers is subsidized by the federal government at different tiers, depending on their income, with those making up to 400 percent of the current poverty level receiving some assistance. Past that, exchange insurance rates are un-subsidized.

“There’s nobody to get in the way in those cases,” Keen said. “If you’re not getting a federal subsidy and you don’t have to go through their exchange, those policies are getting enrolled in a week.”

Of Maryland’s applicants, 3,498 have been determined to be eligible for an exchange-based plan, and 2,638 of these eligible for a federal subsidy. 1,284 have gotten so far as to enroll with an insurer.

State-wide, young people have made up a large number of the 53,000 people who have at least created accounts on the Maryland Health Connection, regardless of whether their application has actually gotten through the federal portion of the process.

According to state data, Worcester County’s 21811 zip code has one of the state’s highest concentrations of account holders, with numbers in the same range as more urban areas of the state.

However, Keen said that local interest trends less toward the young and uninsured and more toward older residents whose plans will have to be re-configured under federal law.

“The people I’m seeing are probably more on the older side,” Keen said. “What’ I’m seeing as the driving factor is typically people who have health insurance and have received a letter that their plan is going to be cancelled. It seems right now that it’s not the people who are uninsured that are coming forward.”

Under the federal Affordable Care Act, all insurance plans must provide subscribers with a single deductible that covers all potential out-of-pocket costs. This was conceived by the Obama administration as a way to reduce hidden fees and force insurance companies to provide more comprehensive coverage.

“The new laws require that if you make co-pays or deductibles or any kind of coinsurance, all of those expenses you pay out-of-pocket have to contribute to one large number,” Keen explained.

However, this means the cancellation of plans that have ancillary fees or qualifications, and their replacement with compliant plans whose premiums are much higher. If one is eligible for a federal subsidy, however, the net cost will still likely be lower.

“Most of the policies being cancelled were missing one of those requirements,” Keen said. “In every case, the premiums on the new plans are higher. So if you’re above the 400 percent of poverty level, it’s costing you more.”

Due to the backlash from some whose policies were being cancelled, the White House announced this week that non-compliant policies could be renewed through the end of 2014, instead of having to switch over in the coming year.

“CareFirst has just released that they will allow their policy holders to keep their policies through all of 2014, but they have a limited time to submit their requests,” Keen said. “So we’ll likely be seeing a rush of people who want to keep policies that are being phased out.”

Further complicating the situation is the fact that Maryland will be automatically enrolling over 82,000 people in Medicaid as of Jan. 1. Maryland is one of several states that has chosen to expand the publicly-backed system, with all those making less than 138 percent of the national poverty line eligible for Medicaid.

Although the state expects new private insurance enrollments to continue to rise through the end of the year, the fact that these are still dwarfed by new Medicaid policies has been pointed to by many critics as evidence that the ACA is unbalanced in private vs. public burden.

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