Producers hear about the Affordable Care Act
Casper – At the 2013 Wyoming Stock Growers Association Winter Roundup, Tom Hirsig, Wyoming insurance commissioner, was brought in to explain the important aspects of the Affordable Care Act (ACA).
Hirsig stated, “The facts are so misinterpreted, a person can’t make a good decision by just watching the media.”
Hirsig was involved with insurance for the past 25 years or more before Governor Matt Mead appointed him as Wyoming’s insurance commissioner.
The changes the ACA made to how the insurance industry operates are eliminating all lifetime and annual limits from plans. Also dependents can be kept on their parent’s plans until the end of the month that they turn the age of 26.
Preventative care, such as colonoscopies and mammograms, will now be covered by the ACA as well. No longer will health questions be asked when applying for health insurance, either.
“Health has nothing to do with health insurance anymore,” said Hirsig.
Wyoming’s high rates
The state of Wyoming experiences high, if not the highest, insurance rates in the country.
Hirsig’s response to the question of why insurance rates are so high is, “We’re sparsely populated. There aren’t tons of doctors, and we don’t have tons of large hospitals that can provide large economies of scale as far as providing healthcare to people.”
Medical loss ratio
The federal government also created a clause called the Medical Loss Ratio that makes insurance companies spend 80 percent of every dollar they receive from premiums on medical care and health care quality improvements.
This ratio limits the amount of premium dollars spent on administrative costs. If, for any reason, the insurance companies do not spend the 80 percent, they have to refund it to their customers.
“Insurance companies are very tightly regulated, even more so now than they ever have been as far as rates,” said Hirsig.
Since health is no longer a factor in determining a health insurance plan, insurance companies are relying on three factors to differentiate health insurance rates.
The three factors are age bands, location rating and a tobacco use rating.
Under the three to one age band, if the youngest population is charged $100 a month, the oldest population will be charged $300 a month.
“That really drives up the rates for the younger population and brings the older population down incriminatingly,” he said.
Wyoming’s location ratings have been divided into the areas of Casper, Cheyenne and the rest of the state. The federal government determined the location ratings.
Plans have also been made uniform in that citizens can no longer pick and choose what options they want with their plan. A single, 65-year-old male will have maternity and newborn care on his insurance plan, whether he likes it or not.
“Health insurance premiums are going up because they deal with unlimited benefits, no health qualifications and they cover lots of expensive programs,” said Hirsig.
The new insurance health plans have become very simplified and are ranked using metallic levels to describe them.
The levels are platinum – the highest level where 90 percent of healthcare costs are covered, gold – covering 80 percent, silver, which covers 70 percent, and bronze, which covers 60 percent of costs.
“This may simplify how people shop for insurance. They can gauge what they can afford and get a good idea what they will pay,” replied Hirsig.
In 2014, employers will have to determine a group size to see if they have to provide insurance or not to their employees.
The federal government determines a group size by full time equivalents. This is calculated by the number of full-time employees and the amount of hours they work in a week.
“Part-time employees and any seasonal employees that have worked more than 120 days are also calculated into determining the full time equivalents (FTE),” said Hirsig.
Any employer over 50 FTE has to have insurance for all their full-time employees. There is no requirement for employers to provide health insurance if they are under the 50 FTE limit.
Self-employed individuals will purchase insurance in the individual marketplace or outside the marketplace.
The enrollment period for the ACA is Oct. 4 to March 31, 2014. The annual enrollment after the first year will occur Oct. 15 to Dec. 7.
“We used to be able to buy health insurance whenever we wanted it. If we don’t have insurance today and if we don’t buy it by March 31, we can’t buy any health insurance until the following year,” warned Hirsig.
To enroll for the ACA, people can visit healthcare.gov or call the consumer hotline at 800-318-2595.
Wyoming also has technology specialists called navigators that can help. Navigators can be reached by calling 211 or visiting wyoming211.org.
Hirsig also warned about fraud and said people should not simply Google “Wyoming Healthcare,” as it is not the same system. Also, Hirsig mentioned that no one should be calling to try and enroll people into the ACA.
“When anything is this big and misunderstood and gets this much media attention, fraud is going to be rampant,” he commented.