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About 2.5M people miss out on Obamacare tax credits

WASHINGTON – Oct. 5, 2016 – About 2.5 million people are missing out on tax credits to lower the cost of their insurance, because they are buying health insurance plans off the federal and state health care exchanges, federal regulators said Tuesday.
Those earning between 100 percent and 400 percent of the federal poverty level – up to $100,000 for a family of four – are eligible for tax credits that lower the cost of their insurance premiums. People who make less than 100 percent of the poverty level were to be eligible for Medicaid under Obamacare, but nearly 20 states have opted against expanding the program.
The Department of Health and Human Services’ new data highlight a key group the Obama administration needs to attract to sustain the key component of its law – the marketplace for those not covered by employer or government insurance plans. Insurers, including Aetna, Cigna and United Healthcare, have dropped out of the exchanges in many areas, citing the high costs of covering sicker-than-expected people who have enrolled so far.
HHS cited a recent Commonwealth Fund survey that found only 52 percent of uninsured adults knew they could get financial assistance for plans sold on the exchanges. Those who don’t buy insurance have to pay a penalty at tax time that many say needs to be higher to boost enrollment, although the penalty is increasing as it is phased in.
“We have an uninformed public and the government chooses to use social media to encourage the young people, when the truth is the penalty is not high enough to encourage them,” says Ronnell Nolan, CEO of the trade group Health Agents for America.
Some consumers may in fact be more informed, however.
Every state has some health plans that are available for sale only from the exchanges, although most of the plans that are sold on exchanges are available through insurance agents, navigators or direct from insurers. Still, a small subset of plans are sold only on exchanges, says Katherine Hempstead, who directs the health coverage team at the Robert Wood Johnson Foundation.
In many areas, one benefit of plans sold through the exchanges is that they are more likely to have some benefits when patients use doctors and hospitals that are not in the insurer’s network, says Hempstead. And they may also have broader provider networks.
“For some consumers, these features may be worth forgoing the tax credit, and since they are ACA compliant they provide the same coverage,” she says.
In Illinois, where broker Jordan Wishner runs the Health Insurance Shoppe, he says the same plans are sold on and off except for an Aetna plan that didn’t prove popular.
In six states – California, Texas, Florida, North Carolina, Illinois, and Pennsylvania – HHS said more than 100,000 individuals enrolled in off-exchange individual market coverage have incomes that make them eligible for tax credits.
HHS Secretary Sylvia Burwell repeated that those who qualify for financial assistance usually have the option to buy coverage with a premium of less than $75 per month.
The new HHS analysis estimates about 6.9 million individuals now buy health insurance outside of the exchanges. Of those, about 1.9 million have incomes that would qualify them for Medicaid if their state expanded the coverage. Others can’t buy plans because of their immigration status.
HHS noted that credits protect consumers from rate increases, which are a big concern this year.
Another problem, Wishner said, is that families may qualify for assistance, but that may be only that their children are eligible for Medicaid’s Children’s Health Insurance Program (CHIP).
Copyright © 2016,, USA TODAY, Jayne O’Donnell
Source: Florida Realtors Feed

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