Health insurance goes to the marketplace this fall

This fall, Montanans will be able to shop for health insurance in an open marketplace and, depending on their income, they could get significant government help on their premiums.

Some states opted to create their own health insurance exchanges under the Affordable Health Care Act, where health care providers compete for business. But Montana didn’t — its health care exchange will be operated by the federal government.

The exchange is designed to provide “one-stop shopping” for people to compare “apples to apples” health care plans, according to Montana State Auditor Monica Lindeen.

Three insurance companies will offer insurance through the exchange — Blue Cross Blue Shield, PacificSource and Montana Health CO-OP. The marketplace is slated to open in October, allowing Montanans to search for products with coverage beginning Jan. 1, 2014.

Even individuals with health insurance through an employer could potentially benefit from the exchange. An employee who is paying more than 9.5 percent of their household income for health insurance through their employer is eligible for the exchange.

Depending on the individual’s household income, they could be eligible for tax credits. The credits, which are set on a sliding scale, are paid directly to the insurer. They are adjusted on income from 100 percent to 400 percent of the federal poverty level. The 400 percent threshold, for example, is $94,000, according to Lucas Hamilton, communications and policy director for the state auditor’s office.

There are caveats to the exchange program. For one, if an individual gets insurance through an employer, the premium payment isn’t considered taxable income. Under the exchange, an individual would have to pay additional income tax and other taxes, if applicable.

Once individuals purchase a policy, they’re covered for a full year and can’t change the policy until the next open enrollment period, similar to Medicare plans, Hamilton noted.

One fault is that individuals who fall below the 100 percent poverty level don’t qualify for the exchange. About 50,000 people in Montana make too much money to be eligible for Medicaid but not enough to be eligible for the exchange.

Most of those people have part-time jobs and no insurance and will still fall through the cracks, Hamilton said. A Medicaid expansion bill debated by the Montana Legislature last session would have covered that population, but it failed to pass.

Some employers could drop health care coverage to employees altogether. Under the law, companies with more than 50 full-time equivalent employees could simply opt out of providing coverage and pay a penalty to the federal government of $2,000 to $3,000 per employee. Individuals would then have to purchase their own health insurance.

But providing health insurance to employees is one of the main benefits to keep employees retained at jobs, Hamilton noted. The exchange is also designed to help small businesses compare and purchase plans.

Consumers can’t compare options just yet — the exchange’s Web site is not up and running.