Even the Affordable Care Act’s biggest supporters have been disappointed by how difficult (some would say impossible) it is to apply for insurance on the website, the national online health exchange.
But there’s another problem brewing for the low- and middle-class families hoping to qualify for discounts on monthly premiums. Consumers by and large still aren’t clear on the criteria the government is using to determine eligibility.
Most of the questions on The Tampa Tribune and TBO.com’s ongoing Health Care Q&A have been about income requirements.
Specifically, readers want to know if the government’s definition of “household income” translates simply to an individual salary earned on a job, or if it includes every source of revenue earned by all members of a household, including seniors.
Insurance agent Julian Lago of Boynton Beach hears those questions all the time. He said many consumers aren’t sure if their income falls between 100 and 400 percent of the federal poverty level, the criteria for subsidies listed in the Affordable Care Act. For an individual, that range is between $11,490 and $45,960 a year.
“I would definitely not walk away from a subsidy if I’m close to being eligible,” said Lago, regional vice president of the National Association of Health Underwriters.
Approximately 70 percent of all Floridians earn less than 400 percent of the federal poverty level, according to the Kaiser Family Foundation. But not all of them will necessarily apply on the exchange, which is designed for consumers who already buy their own plans, are uninsured or have no other access to affordable health insurance.
In Florida, that amounts to just 25 percent of the population.
The healthcare exchange needs an estimate of household income for 2014 to establish eligibility for subsidies or tax credits to be applied on a sliding scale. Premium rates are determined based on income, the type of plan selected, age and tobacco use.
While some individuals have great incentives to apply, others may not. For example, a childless couple that earns $90,000 a year may not even want to bother with the marketplace. They would have to earn $62,000 a year or less to qualify for any discounts.
Lago said an inability to log onto healthcare.gov, which administers the health insurance in Florida and 25 other states, shouldn’t stop consumers from putting their income information together and using other resources to determine their status, he said.
It’s important, he said, to understand who is part of a “household,” and to know the “modified adjusted gross income” (MAGI) earned by family members who make enough to file a federal tax return.
For instance, if you have an adult child who works at the neighborhood supermarket, lives at home and is on your insurance, his income may count, Lago said. An elderly relative earning Social Security payments could be added to the total as well.
The exchange says the description for household members goes beyond spouses and their children. Unmarried partners who need health insurance, any dependents you include on your tax return, and anyone under 21 “who you take care of and lives with you” should be included.
But don’t include partners who don’t need health coverage or their children if they are not your dependents. Nor should you include parents or other relatives who live with you but file their own tax returns.
In general, the household income includes your adjusted gross income plus any tax-exempt Social Security benefits, tax-exempt interest and tax-exempt foreign income. Supplemental Security Income (SSI) does not count.
The University of California at Berkley breaks down MAGI even more. The income should include wages, salaries and tips; taxable interest; taxable amounts of pension, annuity or IRA distributions and Social Security benefits. Other categories, such as business income, farm income, capital gains, unemployment compensation; alimony received, royalties or foreign earned income, also should be considered.
Money you don’t need to include as income includes child support, worker’s compensation, veteran disability payments or proceeds from student loans or home equity and bank loans.
Those who are uncertain about how to proceed may wish to work with a licensed insurance agent, Lago said. His national association has a “Find an Agent” search tool on its website: www.nahu.org. It will list contact information for agents within your ZIP code who are members of the association.
Lago said while healthcare.gov is the only location where Americans can officially apply for subsidies, there are other resources that can help with calculating possible premium discounts. A subsidy calculator created by the Kaiser Foundation and available on TBO.com can provide a fairly accurate snapshot.
When checking out plans, don’t forget to make sure your choice includes your preferred doctors and facilities in its network.
“You need to not only look at the price, you want to know your access to providers,” Lago said.