Twenty-something, out of work, and losing sleep worrying about health insurance

April 27, 2021/in Basic Health Program, Blog, enrollment, Millennials, premium assistance tax credits /by wpmaddoxins

It’s been a widely held conclusion in the health insurance industry and among health policy types that one of our biggest hurdles lies with the challenge of getting coverage for “young invincibles” – Americans old enough to vote but under 30. That label itself is tied to a widely held perception that – because of their youth – “twenty-somethings” believe they’re healthy enough that they simply won’t need all of the bells and whistles of comprehensive health insurance (any time soon, at least).

As an agent and an avid observer of health insurance trends, I know it’s not that simple: young adults, in many cases, are keenly aware of their need for comprehensive coverage. But – despite various federal and state efforts to make coverage more affordable and accessible (including provisions of the American Rescue Plan) – there are definitely barriers making it difficult for young adults to enter the individual health insurance market.

Last week, I spoke with Carolyn Kettig, a young woman who’s determined to get coverage but facing barriers that many young Americans face. Carolyn Kettig is a professional actor in New York, and has thus far maintained health coverage under her mother’s policy. But that will end this summer, when Carolyn turns 26. She shares her story with me here, and I’ve added my own commentary wherever it might help readers in similar situations understand their coverage options.

Before we begin, it’s worth noting that because Carolyn lives in New York, she has access to a Basic Health Program. New York and Minnesota are the only states that offer these programs, and they’re an excellent coverage option for people who are eligible to enroll. But if you’re not in New York or Minnesota, you’ve still got plenty of options.

That’s particularly true now that the American Rescue Plan has been enacted, making premium subsidies larger and more widely available. For many young people, the American Rescue Plan makes robust coverage much more affordable than it used to be. (Previously, it was common for young people to feel like their only truly affordable health coverage option was a plan with a deductible that may have felt impossibly high).

Louise: What’s your current insurance situation and how is it changing this year? What are your options for coverage?

Carolyn: I’m lucky enough to currently be covered by my mother’s health insurance. She has a very generous insurance plan and I’ve been privileged to, thus far, be fully covered. Unfortunately, because I’m turning 26, I’ll be losing coverage this spring.

As a professional actor, my early twenties were filled with countless side jobs that supported me as I sought acting work in New York City. None of these jobs ever came with healthcare benefits, which at the time was okay as I was covered by my mother’s plan. Three years ago, when I landed my first big theater job, I had the opportunity to join the actor’s union, which among many other wonderful things, provides working actors with comprehensive, affordable health insurance.

The only catch, and it’s a fairly large one, is that an actor must work a certain number of weeks in order to qualify. Even without a pandemic, finding steady work in the theater is difficult. Factor in a pandemic that shutters theaters for over a year and causes the union to hemorrhage money … needless to say, healthcare coverage in my industry has become a near impossibility.

I’m hopeful that live entertainment will return in a vaccinated world, but until then, I’m doing my best to make enough money to pay my bills. I’m grateful to be employed part-time as a program director for a teen program. My job has kept me afloat during this devastating time, but, unfortunately, does not come with healthcare benefits. I make very little money and live paycheck to paycheck, which leaves me relatively few options when it comes to insurance. I will most likely go with New York State’s Essential Plan, which is the best option for low-income people who make too much money to qualify for Medicaid.

Louise: The Essential Plan is New York’s Basic Health Program (BHP), which is available to people earning up to 200% of the poverty level. (For a single person in 2021, that amounts to $25,760.) The Affordable Care Act allowed for the creation of BHPs, but New York and Minnesota are the only states that have opted to establish them.

The Essential Plan provides robust health coverage with no monthly premium, and it has much lower cost-sharing than we typically see in the individual/family health insurance market. The Essential Plan is also being enhanced as of June 2021. Previously, some enrollees had to pay $20/month, and there was an extra premium for dental and vision coverage; dental and vision are now included at no cost.

Louise: How much is the need for coverage weighing on you and other people your age?

Carolyn: I’ve lost sleep over this! It weighs on me heavily. Having grown up in New York, I have a long history with some of my doctors, most of whom will not accept my new insurance plan. This means that I will either be forced to find new doctors or pay hundreds of dollars out of pocket for routine check-ups.

I’m also aware that, even with insurance coverage, an unexpected hospital stay could cost me thousands of dollars. It makes me enraged to know that, in an emergency situation, I would avoid going to the hospital because of the cost.

Louise: The Essential Plan provides much more robust coverage than people may be used to seeing elsewhere. There is no deductible, emergency room visits cost $75, and inpatient hospital stays are only $150 per admission – and these fees are waived altogether for enrollees with income up to 150% of the poverty level, or a little more than $19,000 for a single person. This is better coverage than most people have even with higher-end employer-sponsored plans.

Carolyn: I know that I’m not alone in this. Especially since my generation is now living through a global health crisis, I think my peers are more aware than ever before of how broken our healthcare system really is. Moreover, as a white, cisgendered woman from a middle-class background, I’m cognizant of the privilege my identities afford me and deeply disturbed by the ways in which our healthcare system disregards and harms BIPOC, low-income families, LGBTQIA+ youth, and undocumented workers (many of whom are essential workers and yet have little access to healthcare coverage) among many others. Alongside the climate crisis and the fight for racial equality, I believe that healthcare reform will dominate the American political landscape for the next few decades.

Louise: I agree that our healthcare system is in need of extensive reform. The American Rescue Plan, enacted just last month, is the first major change we’ve seen since the Affordable Care Act was signed into law 11 years ago. It includes some substantial improvements designed to make health coverage more affordable and accessible.

But these improvements are temporary unless Congress takes additional action to make them permanent. And there are other issues, such as the ACA’s family glitch, and the Medicaid coverage gap that exists in the dozen states that have refused to expand Medicaid, that haven’t yet been fixed. Fortunately, lawmakers in Congress are continuing to push forward on these issues, and voters can reach out to their elected officials to express their opinions.

Louise: What do you see as challenges in this situation?

Carolyn: I’ve mentioned many challenges already, but I think chief among them is simply how confusing and difficult it is to make informed choices. Reading about insurance options requires learning an entirely new language and navigating nearly impenetrable websites.

Louise: For folks who are confused by the terminology and concepts that go along with health insurance, our glossary is a great resource. We’ve incorporated plenty of details, since that’s where the nuances always are. And we’ve focused on explaining things using plain language that’s easy to understand.

Help from the American Rescue Plan

Louise: Are you aware of the changes that the American Rescue Plan has made? Do you think it will make it easier for you to access coverage?

Carolyn: I’ve read a bit about the changes made by the American Rescue Plan and am thrilled that this administration is attempting to expand access to healthcare (even though I’d love to see more substantial reform). I don’t think that I will be impacted directly by the bill because I already live in a state that offers an affordable plan for people in my income bracket.

Louise: If you lived in another state, the American Rescue Plan would make your coverage more affordable. But you’re correct: Assuming your 2021 income doesn’t exceed 200% of the poverty level (about $25,760), you’ll be eligible for either The Essential Plan or Medicaid in New York, both of which are already robust coverage with no monthly premiums.

But for others in a similar situation who live elsewhere, the American Rescue Plan implements a variety of improvements that make it easier for young people to transition to their own coverage. Among other provisions, the American Rescue Plan:

Increases the size of premium subsidies and makes them more widely available.
Makes coverage more affordable for young people.
Ensures that people who are receiving unemployment compensation this year can enroll in robust coverage without having to worry about the cost.

Louise: What do you expect to happen with your coverage this summer? Do you have a good idea of the plan you’ll be on after you transition away from your mom’s coverage, or is it still up in the air?

Carolyn: Fortunately, through The Actors Fund, I have access to a professional who will guide me through the process of finding a plan, although I’m fairly certain I will end up on the Essential Plan.

I’ve been told to begin the process a couple months before I lose coverage, so that’s coming up very soon! I also have many friends who are in a similar situation or have already gone through the process, so I expect I’ll be texting them a whole lot. Even though I’m anxious about navigating the system on my own for the first time, I feel well supported as I approach this transition.

Louise: As you’re going through this insurance transition, what do you feel are the most important things for other people your age to keep in mind?

Carolyn: I think it’s important to do your research, seek out trusted professionals or peers to guide you, and ask a lot of questions. The system is designed to be confusing and ultimately benefit insurance companies, so I believe the more questions you ask, the better positioned you’ll be to advocate for yourself. Get acquainted with the vocabulary and make sure you know the basic terms (i.e. premium, deductible, out of pocket maximum, in-network, enrollment period). And if you’re uninsured for a period of time, know that you can find sliding scale clinics, sliding scale hospital services, and assistance paying for prescription drugs. Your health, both physical and mental, is of utmost importance!

Louise: The advice to seek out assistance and ask lots of questions is spot-on. There are no silly questions, and any question you might have about health insurance is certainly shared by plenty of other people.

Thanks to the American Rescue Plan, there has never been a better time to be transitioning to your own health insurance policy. And even if you’re not experiencing a qualifying event (such as aging off of a parent’s health insurance policy), there’s a COVID-related enrollment window that runs through August 15 in most states, giving people an opportunity to enroll and take advantage of the newly enhanced premium subsidies.

And in every community, there are navigators, enrollment counselors, and health insurance brokers who can help you pick a plan and answer any questions you might have. We also have an extensive collection of FAQs, including several that are specific to young adults.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Affordable Care Act’s Basic Health Program

January 7, 2021/in Basic Health Program, BHP, coverage delivery, qualified health plan /by wpmaddoxins

Under the ACA, most states have expanded Medicaid to people with income up to 138 percent of the poverty level. But people with incomes very close to the Medicaid eligibility cutoff frequently experience changes in income that result in switching from Medicaid to ACA’s qualified health plans (QHPs) and back. This “churning” creates fluctuating healthcare costs and premiums, and increased administrative work for the insureds, the QHP carriers and Medicaid programs.

The out-of-pocket differences between Medicaid and QHPs are significant, even for people with incomes just above the Medicaid eligibility threshold who qualify for cost-sharing subsidies.

The Basic Health Program (BHP) – section 1331 of the ACA — was envisioned as a solution, although most states did not establish a BHP. Under the ACA (aka Obamacare), states have the option to create a Basic Health Program for people with incomes a little above the upper limit for Medicaid eligibility, and for legal immigrants who aren’t eligible for Medicaid because of the five-year waiting period.

The Basic Health Program was originally scheduled to begin January 1, 2014, but was postponed until 2015. And even then, only two states chose to implement a BHP: Minnesota‘s BHP was effective in January 2015 (see Minnesota’s BHP blueprint), and New York‘s took effect in January 2016 (see New York’s BHP blueprint).

Why Minnesota and New York?

For several reasons, it made sense for Minnesota and New York to establish BHPs. With a BHP, the federal government pays the state 95 percent of what they would have paid in cost-sharing subsidies and premium subsidies if the BHP enrollees had instead enrolled in the second-lowest-cost Silver health insurance plan in the exchange. The state contributes additional funding as needed, and directs all the money to the managed care organizations that provide benefits under the BHP.

Coverage under the BHP is available to people who aren’t eligible for Medicaid, don’t have access to an affordable employer-sponsored plan, and whose household income doesn’t exceed 200 percent of the poverty level (a little more than $43,000 for a family of three). And it’s also available to legal immigrants with income up to 138 percent of the poverty level who aren’t eligible for Medicaid because of the five-year waiting period.

Under the ACA, legal immigrants who are ineligible for Medicaid (because of the five-year waiting period) are eligible for premium subsidies in the exchange with income as low as $0. But starting in 2001, New York allowed low-income legal immigrants to enroll in state-funded (no federal matching funds) Medicaid. Since a BHP receives significant federal funding, switching to a BHP allowed New York to save money on the state-funded Medicaid they provide for low-income immigrants.

New York’s BHP (aka The Essential Plan) also presents a better deal for enrollees. NY Department of Financial Services noted that a person earning about $20,000/year would spend less than half as much in total healthcare costs on the BHP in 2016 (the first year the state’s BHP was available) than they would have on a subsidized private health plan in 2015. As of 2021, the state’s fact sheet about the Essential Plan indicated that premiums have remained at $20/month (or zero dollars, depending on income), although there is an extra fee to add dental and vision coverage if you’re on the higher end of the eligible income range for BHP coverage. Total enrollment in the Essential Plan stood at nearly 800,000 people as of 2020.

In Minnesota, the state has operated MinnesotaCare since 1992. The state-funded program offered health coverage to residents who weren’t eligible for Medicaid, and the eligibility threshold extended as high as 275 percent of the poverty level for families with children, and 175 percent of the poverty level for adults without children. By converting MinnesotaCare to a BHP as of January 2015 (it’s still called MinnesotaCare), the state was able to take advantage of the much more generous federal funding that goes with a BHP.

Enrollees in MinnesotaCare also have far lower out-of-pocket exposure and premiums than they’d pay if they were enrolled in a private, subsidized plan through the exchange. MinnesotaCare’s copay for an inpatient hospitalization is $250 in 2021, and copays for prescriptions are $7 or $25, depending on the drug, up to a maximum of $70 per month. MinnesotaCare had 94,953 enrollees as of January 2021.

So by implementing BHPs, New York and Minnesota are able to utilize federal funding to provide coverage that they were previously offering under state-funded programs. And their residents are able to obtain coverage with lower premiums and lower cost-sharing than they’d get if they had to enroll in private health plans instead.

Massachusetts has a program called ConnectorCare that supplements exchange subsidies for enrollees with incomes up to 300 percent of the poverty level. It’s not a BHP though — ConnectorCare was created as part of an 1115 Medicaid waiver and uses Medicaid funds to supplement the subsidies.

Millions could benefit, but most states keep status quo

Prior to 2014, a Kaiser Family Foundation analysis projected that nationwide, approximately 34 percent of total projected exchange enrollment would be people with incomes between 138 percent and 200 percent of the poverty level.

Among people who purchased private plans through Healthcare.gov for 2021, about 57 percent — more than 4.7 million people — had income between 100 percent and 200 percent of the poverty level, but the enrollment report didn’t distinguish between people with income from 100 – 138 percent of the poverty level and those with income from 139 – 200 percent (instead, it broke it down to about 3 million with income between 100 – 150 percent, and about 1.7 million with income between 150 – 200 percent). For 2021 coverage, there are 14 states on the Healthcare.gov platform that have not expanded Medicaid, which means they had a much higher percentage of enrollees with incomes from 100 – 150 percent of the poverty level (in Medicaid expansion states, Medicaid covers the majority of people in that category, since eligibility extends up to 138 percent of the poverty level; in non-expansion states, subsidy eligibility begins at 100 percent of the poverty level).

A 2012 Health Affairs study found that if all states were to implement BHPs, 1.8 million fewer adults would churn between Medicaid and QHPs each year. To address the problem of churn, New York’s BHP eligibility is determined annually. That means BHP enrollees aren’t subject to churning between Medicaid, the BHP, and private health plans based on income fluctuations during the year.

At least eight states were considering implementing a BHP in 2015, although Minnesota was the only state that moved ahead with their plans. New York joined Minnesota in offering a BHP starting in 2016, but no other states have followed suit.

The ACA requires states that operate a BHP to coordinate BHP eligibility and enrollment with Medicaid, CHIP (Children’s Health Insurance Plan), and QHPs in the exchange, but states are given plenty of leeway in designing their BHPs within the basic guidelines established by HHS. States can create BHPs that contract with Medicaid managed care organizations and jointly administer BHPs with Medicaid, effectively creating seamless coverage for everyone under 200 percent of poverty level, with continuity of benefits and providers. States also have the option of combining BHP risk pools with exchange risk pools in order to avoid destabilization of the private market that might occur if too many people were shifted to a separate BHP risk pool.

Both New York and Minnesota have made their BHPs available through their state-run exchanges, and both have opted to have BHP enrollment run year-round, like Medicaid, rather than having defined open enrollment periods like QHPs.

Lower costs for enrollees

A BHP must limit premiums and cost-sharing to no more than the amounts that insureds would otherwise have paid in the exchanges with the regular premium and cost-sharing subsidies. But in reality, they’re likely to be far lower since BHPs are generally modeled on Medicaid and CHIP. This is certainly the case in New York and Minnesota, where BHP enrollees face far less in out-of-pocket spending and premiums than they would if they had to purchase even heavily-subsidized QHP coverage in the exchange.

Lower premiums and out of pocket costs in BHPs will likely lead to higher enrollment and coverage retention among the population with incomes under 200 percent of poverty level.

Funding for BHPs comes from a combination of state and federal money, as well as some cost-sharing for enrollees.

In New York, there’s no Essential Plan premium for enrollees with income below 138 percent of the poverty level who are eligible for the BHP because they’re in the five-year waiting period for Medicaid. Enrollees with income between 139 percent and 150 percent of poverty only pay a premium if they want dental and vision coverage in addition to the health plan, and enrollees with income between 150 percent and 200 percent of the poverty level pay $20/month — directly to the managed care organization providing the coverage — for Essential Plan coverage.
In Minnesota, some groups don’t pay premiums for MinnesotaCare. But most pay premiums on a sliding scale, ranging as high as $80/month but averaging about $16/month.

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