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Insurance commissioner pens open letter regarding new health exchange

As Obamacare’s new insurance exchanges have come online on at the beginning of October, Iowa’s Insurance Commissioner Nick Gerhart penned an open letter to inform the general public of some expected outcomes and key points for Iowans to consider when purchasing health insurance products.

The letter discusses some of the significant changes that are now required under the law.

These include “the elimination of any consideration of a pre-existing condition for acceptance of an application for coverage, the removal of all annual and lifetime benefit maximums, the extension of coverage for children covered under a parent’s plan to age 26, and minimum essential benefit standards to be followed by all plans.”

All health plans offered must now conform to these minimum standards both for products purchased privately and for products purchased through the public health-insurance exchange.

The letter explains the different health plan levels that will be offered through the exchange as Bronze (a plan with an actuarial value of 60 percent, meaning a person would be responsible or 40 percent of all covered benefits), Silver (70 percent), Gold (80 percent), and Platinum (90 percent).

Detail is also included related to tax credits available to those that purchase a product on the insurance exchange with qualifying incomes. “Individuals from 100 percent of federal poverty level (FPL) up to 400 percent of federal poverty level ($11,490 — $45,960 for an individual and $23,550 — $94,200 for a family of four) will qualify for tax credits.”

Commissioner Gerhart makes a special effort to point out key points that Iowans need to consider before purchasing a product through the insurance exchange. He notes:

• Make sure your physician is in the network of the plan you are purchasing. Some plans in the marketplace are narrow network plans and you may need to locate a new physician if your current physician is not in the plan’s network.

• Make sure the drugs you need are covered if you require certain drugs for ongoing treatment.  A qualified health plan is only required to cover one drug from each United States Pharmacopeia (USP) category. Individuals will have a right to appeal to get medically necessary drugs covered.

• Understand the costs related to your plan. Depending upon the plan you purchase, the amount you will be required to pay for deductibles and coinsurance may vary.

•Understand that you will not qualify for a tax credit if you have access to affordable minimum essential coverage through your employer. Affordable coverage is defined as 9.5 percent of your household income based upon the single employee’s premium and coverage of 60 percent of your insurance costs.  

• Tax credits are available only for plans purchased on the marketplace. You are not eligible for tax credits if you purchase insurance outside of the marketplace or if you continue on the health insurance plan you have currently.

• Failure to obtain minimum essential coverage will subject you to a penalty based on a minimum flat rate or a percentage of your income, whichever is greater.

• Medicare coverage is not impacted by these changes. You must still enroll for Medicare or supplemental insurance during the separate open enrollment held every year for those types of coverage.

• All plans certified by the division will be available on www.healthcare.gov on Oct. 1 and will meet the definition of minimum essential coverage. The federal number to call for assistance is 800-318-2596.

• Be wary of fraud.  There may be more opportunities for bad actors to steal identities or promote non-existent or minimal coverage plans as qualified health plans meeting new health-plan standards. Use a licensed agent or broker or work with a navigator. 

The opening of the exchanges has been fraught with difficulties, with many encountering problems receiving information and an inability to access the marketplace website, which is being managed by the federal government. New insurance products are set to become active as early as Jan. 1, 2014.

I continue to appreciate the opportunity to represent each of you in the Iowa House of Representatives. May you each have a blessed and safe harvest season.

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