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Health care exchange starts today

Today marks the beginning of a seismic shift in the state’s health-care industry with the opening of Covered California, a health insurance marketplace that offers a variety of coverage options direct to consumers. It’s the cornerstone of the hotly contested implementation of the Affordable Care Act (ACA), also known as ObamaCare.

To help Sonoma County residents understand what this change will mean for them, 1st District Supervisor Susan Gorin hosted a meeting last Thursday at Altimira Middle School, during which a panel of experts discussed the law and took questions from the audience of about 40 attendees. The speakers ranged from representatives of the county’s Department of Health Services, to the Sonoma Valley Chamber of Commerce.Each spoke about different aspects of the new law and how it will affect various stakeholders, from the business community to new immigrants.

The meeting was briefly interrupted when an audience member began shouting at the dais in what appeared to be a staged protest against the ACA. The protestor, who refused to identify herself, ignored repeated requests for order from officials, and left only when other attendees shouted back for her to “shut up.”

Of the 70,000 Sonoma County residents who currently live without health insurance, approximately 50,000 will be eligible for insurance under the Affordable Care Act. However, not all 50,000 will sign up in the first year. Dr. Abraham Daniels of the Department of Health Services said, “We want to enroll 13,500 in Medi-Cal, as well as 12,000 into Covered California in the first year.”

Medi-Cal, California’s version of Medicaid, will be expanded to cover a wider range of patients. In 2014, people under age 65, including those with disabilities, with an annual income of less than $15,856 for a single individual or $32,499 for a family of four, can sign up for Medi-Cal. No longer will assets, such as owning a house or car, count against a person’s eligibility for the state-provided insurance.

“Right now, to be eligible for Medi-Cal, there has to be a child somewhere in the picture,” said Cheryl Johnson, chief executive officer for the Sonoma Valley Community Health Center, explaining that under Medi-Cal expansion, single people who meet the income requirements will be able to qualify.

For those who don’t meet Medi-Cal’s salary requirement, Covered California offers a variety of tax subsidies based on income. Those who make between $32,500 and $58,875 for a family of four (or $15,860 to $28,725 for a single adult) will receive financial assistance to pay for deductibles and co-pays as well as a tax credit to lower monthly premium rates. Families of four who have a total combined income from $58,875 to $94,200 (or $28,725 to $45,960 for a single adult) will qualify for a tax credit for lower monthly premiums. Income is measured by what a family or individual takes home after state and federal taxes are paid, and can be found on line 27 of most recent tax returns.

How much a family or individual pays for health insurance depends on the level of care desired. Plans range from platinum, which covers 90 percent of “actuarial value” (the share of health care the plan will fully cover) but has the highest monthly premiums; to bronze, which covers just 60 percent of accrued health care costs but comes with a lower monthly premium. While plans will have different price points, all must cover 10 “essential benefits” such as emergency treatment, mental health care and pediatrics; and the maximum out-of-pocket cost for any one individual is capped at $6,350, or $12,700 for a family of four. Covered California has a calculator on its website that will determine the average monthly cost for insurance based on total household income and level of coverage preferred.

Open enrollment for Covered California plans will begin on Oct. 1, for health coverage that will go into effect on Jan. 1.

What follows is an assessment of how ACA impacts different stakeholders.

I have health insurance through my work

Not much will change for the roughly 50 percent of Americans who receive health insurance through their work – employer-provided plans will continue as usual in most workplaces. Employers will be required to notify staff about the health exchange marketplace, and in some cases, buying insurance through Covered California could be more cost-effective for an employee. Employers must inform staff if the insurance provided is deemed inadequate (defined as covering less than 60 percent of “actuarial value”), and those employers will be required to notify staff about tax credits available through Covered California. Some small businesses may decide to drop private employee coverage and seek insurance through the state, as they can get tax credits for utilizing Covered California instead of a private insurer (see section on business owners below).

I buy my own health insurance

For the one in 10 Americans who fund their own health insurance, costs are expected to drop dramatically for low-income individuals under Covered California. A Milliman Client Report on individual health care plans found that those living under 250 percent of the federal poverty line (FPL) would save, on average, 76.2 percent on annual health care costs. Those living between 250 and 400 percent of the FPL would save 39.9 percent annually. However those who are above 400 percent of the federal poverty line are expected to pay 20.1 percent more each year for coverage. The federal poverty line for 2013 is $11,490 for a single adult, or $23,550 for a family of four. Insurance can be purchased online, in person, over the phone or by mail.

I am on COBRA

Nothing will change for those who currently get health insurance through COBRA. However, COBRA beneficiaries will not be subject to the same open enrollment dates as other users (Oct. 1 to March 1), and will instead see enrollment open when the COBRA coverage lapses.

I am on MediCare

“I am here to dispel the rumor about the Affordable Care Act and its impact on Medicare – there is none,” said Alan Piombo, a counselor with the nonprofit Health Insurance Counseling and Advocacy Program (HICAP), during Thursday’s meeting. “Just know it doesn’t impact Medicare recipients.” Piombo said, in the future, ACA could lead to lower drug costs, but Medicare users do not have to do anything different to maintain their coverage under ACA. Learn more at senioradvocacyservices.org.

I am on Medi-Cal

For those already using Medi-Cal, there will be no change to coverage. Medi-Cal will be vastly expanded under the new law to cover more individuals. To prepare for this change, the federal, state and local government have been providing more grants to federal qualified health centers to prepare for the influx of new patients.

I am an immigrant

Undocumented immigrants cannot obtain coverage through either Medi-Cal or Covered California. “Hopefully, we’ll get to the point where everyone is covered,” said Cheryl Johnson, chief executive officer of the Sonoma Valley Community Health Center. She added that many nonprofit, auxiliary health services are refocusing efforts to help care for the more than 2-million undocumented immigrants living in California.

I am under the age of 30

Under the ACA, children will be able to stay on their parents’ health insurance until the age of 26. People under 30 who have limited health care needs can sign up for the state’s “catastrophic coverage,” which helps avoid financial ruin should a catastrophic medical issue arise. Users of this plan won’t pay a monthly premium, but will have to pay for care should they require treatment, with the out-of-pocket cost capped at the state’s maximum individual deductible of $6,350. The plan covers three primary care visits per year, as well as a slew of “preventive care” options, such as an annual pap smear for women. Additionally, those under 30 can qualify for Medi-Cal (depending on income); or buy into a Covered California plan, which can run as low as $38 a month for a bronze-level plan for a 25-year-old who makes $22,000 annually.

I am a business owner

Businesses will be impacted more significantly by the new law, which is why the federal government extended the requirements of ACA to 2015 for business owners. Starting in 2015, businesses with more than 50 fulltime employees will be required to offer health insurance to employees, or will be subject to fines. Businesses with 50 or fewer employees do not have to provide insurance to employees. Businesses with 25 or fewer employees, who make an average of $50,000 or less, will be eligible for tax credits should they choose to provide employee health insurance.

“You’re going to have more options as to what you can provide your employees,” said Jennifer Yankovich, executive director of the Sonoma Valley Chamber of Commerce. Working with the Economic Development Board, the chamber will offer a series of workshops, both online and in person, for business owners to better understand the requirements of the law before it goes into effect in 2015.

I want to opt out of health care coverage

The new law requires all who are eligible to sign up for health care or pay a fine, with a few exceptions. Exemptions will be given to those who have a conflict with their religious belief, such as the Amish; Native American tribes; those who are incarcerated and people who would have to pay more than 8 percent of their total income for insurance. Fines for those who do not qualify for an exemption will increase over the coming years, beginning at $95 a person or 1 percent of income (whichever is higher) in 2014, and reaching $695 per person or 2.5 percent of income by 2016. Penalty fines must be paid with tax returns.

Get the details of California’s health exchange at coveredca.com, where you can see insurance coverage options based on income.