Obamacare Q&A: Why, how and how much?

So you missed the Dec. 15 deadline to sign up for an Obamacare marketplace plan. And you missed the Dec. 17 extension that the federal government hastily granted after a stampede of new enrollees slowed the HealthCare.gov website to a crawl.

It’s not too late. You’ve still got a second- and a third-chance deadline to get health insurance during open enrollment in the weeks ahead.

If you’ve wanted coverage but procrastinated, or if you’re skeptical or totally perplexed about the Affordable Care Act, you probably have plenty of questions. Look for some answers here.

Q: What are the marketplaces and what kinds of plans are these?

A: The insurance plans are similar to what workers get through their employers, or what people buy through an insurance broker. The plans aren’t part of a government program like Medicare; they’re offered by recognized commercial insurance companies. In the Kansas City area, four insurers are offering plans in Missouri and two are offering plans in Kansas.

The plans are ranked by “metal class” as bronze, silver, gold or platinum, depending on how much of your health care costs they cover. Generally, higher-ranked plans have higher monthly premiums and lower deductibles and copays, but there’s enough variation among plans to make it hard to generalize.

The marketplaces are websites where you can compare the insurance plans, enroll and qualify for premium subsidies. Some states operate their own marketplace, but most, including Kansas and Missouri, rely on the federal HealthCare.gov marketplace.

Anyone living in the United States can use the marketplaces as long as he or she is a U.S. citizen or lawfully present foreign national, isn’t in prison and doesn’t have Medicare coverage.

Health insurance is also available outside the marketplaces, but those plans aren’t eligible for subsidies.

Q: I’ve heard that HealthCare.gov is a nightmare. Is that true?

A: For many weeks during the first open enrollment period in 2013, the website was a disaster. But it has improved markedly. The interminable enrollment process has been streamlined. And the site has been made more user friendly, making it easy to browse through plans and get cost estimates before going through the enrollment process.

But HealthCare.gov’s capacity can still be overwhelmed, as was the case in the days before the Dec. 15 deadline when about 1 million people had to leave their contact information to hold their place in line.

Q: OK, so what are the other deadlines?

A: You had to enroll by Dec. 17 for coverage that starts Jan. 1. But sign up by Jan. 15 and your coverage begins Feb. 1; sign up by Jan. 31 and you’re covered March 1. After that, you’ll have to wait until the fall of 2016 to enroll, unless you’ve lost insurance through a “qualified life event,” such as divorce or job loss.

Q: How expensive is it going to be?

A: Local health care organizations say that’s the No. 1 question of people seeking help signing up for coverage. Many of these people wrongly expect to be priced out of the market.

“We have people come in who say they’re scared because they’ve heard it’s going to cost me a lot of money,” said Janie Ness, financial counseling director at Truman Medical Centers. One worried woman recently told Ness she thought she’d have to choose between paying for insurance or providing for her family, which turned out not to be true.

“A lot get their information word of mouth, and a lot of that may be incorrect,” Ness said.

The Affordable Care Act uses a carrot and a stick to goad and entice people to enroll in health plans. The stick of tax penalties may not have been big enough in past years to be much of a motivator, but the carrot of premium subsidies has been fat and juicy for many people with moderate incomes.

Americans with incomes between $11,770 and $47,080 — 100 percent to 400 percent of the federal poverty level — are eligible for a premium tax credit for marketplace plans. The subsidies are on a sliding scale, declining as income rises. The money goes directly to the insurance company to defray the cost of the premiums.

About eight out of 10 people who signed up for a 2015 marketplace plan qualified for this assistance, according to the Department of Health and Human Services. The average subsidy was $270 per month.

As of early this year, about 156,000 uninsured people in Missouri and 83,000 in Kansas qualified for marketplace insurance plan premium subsidies, according to the Henry J. Kaiser Family Foundation.

In the Kansas City area, about 112,000 uninsured people qualify to use the marketplace; most are eligible for subsidies.

Q: But aren’t premiums going up considerably next year?

A: Yes, some of them are. The average premium for the second-lowest-priced silver plan in Kansas will be going up by 16.1 percent next year and in Missouri by 10.4 percent. In the Kansas City market, the premium will jump by 20.1 percent.

But not every insurance plan will see steep premium increases. Insurers may jack up premiums of money-losing plans in order to make them less attractive while keeping premium increases for other plans to a minimum.

And a stiff boost in the cost of the second-lowest silver plan has a negligible effect on its subsidized cost. That’s because these are the benchmark plans used to set subsidies.

For a family of four with an income of $60,000 in Kansas or Missouri, the subsidized premium for a benchmark silver plan next year will run $405 per month, compared with $407 this year. A single person with an income of $25,000 can get the plan for $143, the same as this year.

Bronze plans generally will be cheaper. Federal number-crunchers expect that nearly 80 percent of the people who were enrolled in a marketplace plan this year will be able to buy a plan for 2016 that has subsidized monthly premiums of $100 or less.

That won’t be any consolation, however, to people who don’t qualify for a subsidy and will have to pay the full, higher amount.

Q: How can I make sure I get the best deal?

A: “We really encourage people to shop around,” said Stephene Moore, health and human services regional director in Kansas City. “Go online, talk to an insurance agent, call the HHS information line, make an appointment with an (enrollment) assister.”

Plans change from year to year, so what may have been the best deal one year becomes expensive the following year, while new and more attractive plans become available.

Many people look at monthly premiums when they decide which plan to choose. But other factors to consider may be even more important.

Insurance companies often will keep premiums down by shortening the lists of doctors and hospitals that their plans cover. If you have a favorite hospital or an established relationship with a physician, make sure they’re included in the insurance plan you’re considering.

Another insurance company tactic is to shift your out-of-pocket costs from premiums to things you’re less likely to consider, such as deductibles (the amount you have to spend on your health care before your insurance kicks in) and co-insurance and copays (the share of your medical bill that insurance doesn’t cover). If you have medical conditions that require frequent trips to the doctor, low co-insurance costs may be more important than having the cheapest premium.

These aspects of health insurance are often new information to people who have never been insured before, Moore said: “We don’t talk about copays and deductibles on a routine basis. That’s why it’s important to get information from a trusted source.”

Q: What happens if I don’t get health insurance?

A: You won’t be getting much sympathy, and you may have to pay an additional fee, along with your income taxes.

Nationwide, some hospitals have been cutting back financial assistance on the assumption that more people with moderate incomes have, or at least should have, bought insurance. Truman Medical Center, for example, used to provide free or discounted care to uninsured people making up to 400 percent of the federal poverty level; as of 2014, only those making less than 200 percent qualified.

Over the past few years, the Affordable Care Act has been ramping up the financial penalties for going without insurance. The reckoning comes each year when you do your income taxes and have to factor an added fee into the bill.

In 2014, it was $95 per adult (half that per child) or 1 percent of household income, whichever was greater. This year, it was a minimum of $325 per adult.

Go uncovered next year and the penalty jumps to a minimum of $695 or 2.5 percent of your income. Depending on your earnings and the size of your household, that can easily reach in the four figures.

“I think the penalty is finally a reality,” said Jim Torres, health insurance marketplace coordinator at the Samuel U. Rodgers Health Center. “It starts adding up to real money.”

Q: How does that work?

A: It involves a calculation based on your household’s adjusted gross income, as reported on your tax return and the number of uninsured adults and children in your household. The penalty is prorated for how much time you spend uninsured.

You can find a calculator at https://www.health insurance.org/obamacare /obamacare-penalty- calculator/ that will give you an estimate of your penalty if you remain uninsured.

In Missouri, for example, a Jackson County single adult living alone who has an income of $27,000 and goes all of 2016 without insurance will be liable for the minimum $695 fee. But with an income of $65,000, the penalty will nearly double to $1,367.50

For a Johnson County family of four in Kansas, two adults and two children, with an income of $60,000, the total penalty comes in at the minimum of $2,085 if all are uninsured. When their household income exceeds about $104,000, the penalty starts rising. At $150,000, for example, it’s $3,235.

Some experts doubt that these fines have been much of a motivator yet to buy insurance. But people may discover there’s not much of a spread between the penalties and the premiums.

Take that hypothetical single Jackson County resident: If it’s a 35-year-old man who doesn’t smoke, he would qualify for a monthly subsidy of $112. That brings the premium for the cheapest bronze plan down to $99, or $1,188 for the year. That’s $493 more than the penalty. For that hypothetical Johnson County family, with a husband and wife both 35 and nonsmokers with a combined income of $60,000, the subsidy brings the cheapest bronze plan down to $191 per month. For the year, that comes to just $207 more than the penalty.

Q: If I sign up for coverage that doesn’t start until February or March, will I be fined? That doesn’t seem fair.

A: If you’re uninsured for just one or two months, you won’t have to pay any tax penalties. That means if you heed the second-chance January deadlines and enroll, you won’t see your tax bill go up in 2017 because you were uninsured.

This story was originally published December 22, 2015 at 4:52 PM with the headline "Obamacare Q&A: Why, how and how much?."