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As health care markets open, divisions emerge

Sept. 21, 2013 at 4:21 a.m.


Editor's Note: This is part 1 of a daily eight-part series.

WASHINGTON (AP) - Having health insurance used to hinge on where you worked and what your medical history said. Soon that won't matter, with open-access markets for subsidized coverage coming Oct. 1 under President Barack Obama's overhaul.

But there's a new wild card, something that didn't seem so critical when Congress passed the Affordable Care Act back in 2010: where you live.

Entrenched political divisions over "Obamacare" have driven most Republican-led states to turn their backs on the biggest expansion of the social safety net in a half century. If you're uninsured in a state that's opposed, you may not get much help picking the right private health plan for your budget and your family's needs.

The differences will be more glaring if you're poor and your state rejected the law's Medicaid expansion. Unless leaders reverse course, odds are you'll remain uninsured. That's because people below the poverty line do not qualify for subsidies to buy coverage in the markets.

"We are going to have a new environment where consumers may be victims of geography," said Sam Karp of the California HealthCare Foundation, a nonprofit. "If I'm a low-wage earner in California, I may qualify for Medicaid. With the exact same income in Texas, I may not qualify."

The health care law is finally leaving the drawing boards to become a real program with citizens participating. But in many parts of the country, the decisions of Republicans opposed to the law will trump the plans of Democrats who wrote it.

Still, there is a new bottom line. Health insurance marketplaces in every state will provide options for millions of people who don't have job-based coverage, who can't afford their own plan or have a health problem that would get them turned down. The feds will run the markets in states that refused to do so.

The coverage won't be free, even after sliding-scale subsidies keyed to your income.

That's significant because starting next year, most Americans will also have a legal obligation to get covered or face fines. Some people who now purchase bare-bones individual plans will complain the new ones cost too much. Others, in good health, may resent the government telling them to purchase insurance they don't think they need.

Nonetheless, the number of uninsured people is expected to drop markedly, bringing the United States closer to other economically advanced countries that guarantee coverage.

The combination of subsidized private insurance through the new markets, plus expanded Medicaid in states accepting it, could reduce the number of uninsured by one-fourth or more next year. Current estimates of the uninsured range from around 49 million to well more than 50 million.

As Americans get more familiar with the law - and if more states accept the Medicaid expansion - millions more should gain coverage. Many of the remaining uninsured will be people living in the country illegally. They are not entitled to benefits.

In Texas, Republican Gov. Rick Perry has vowed not to facilitate "Obamacare." But Cecilia Fontenot, of Houston, is looking forward to the opening of that state's federally run insurance market.

A part-time accountant in her early 60s, Fontenot is uninsured and trying to stay healthy while coping with diabetes, high blood pressure and high cholesterol.

Also on her mind is a breast lump detected about a year ago. Her doctor recommended a digital mammogram, but she has not been able to afford the more involved test.

"I try not to worry and just pray on it," said Fontenot.

Because of her pre-existing conditions, Fontenot would have a tough time finding affordable individual coverage today. But starting Jan. 1, insurers will no longer be able to turn away people with health problems or charge them more.

And the government will provide sliding-scale tax credits that can make premiums more affordable for households earning between 100 percent and 400 percent of the federal poverty line. That's $11,490 to $45,960 for an individual, $23,550 to $94,200 for a family of four.

People on the low end of the income scale get more help, as will older people, whose premiums are higher.

With an annual income of about $23,000, Fontenot makes too much to qualify for Medicaid. And her state decided not to expand the program, an option the Supreme Court granted last year as it upheld the rest of Obama's law.

But she would qualify for subsidized private coverage in the federally run Texas marketplace. She could apply online, through a call center, by mail or in person.

Fontenot would be able to take her tax credit and use it to pick an insurance plan. Coverage takes effect Jan. 1.

Fontenot's share of premiums would be capped at 6.3 percent of her income.

"If I want to stay alive, I'm going to have to budget that in," said Fontenot.

Related stories:

How to apply for health insurance

Affordable Care Act open enrollment begins soon

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