This article first appeared in the St. Louis Beacon: About 525,000 Missouri residents will be eligible for premium tax credits to help them buy affordable health insurance, starting this fall, according to a study by Families USA. The number offers one answer to what happens if Missouri refuses to expand Medicaid. Some of those left without health coverage could conceivably get help under the exchange program.
Estimates in Families USA’s study are limited to individuals earning between 138 percent and 400 percent of poverty. But insurance exchange benefits can extend to individuals earning down to 100 percent of poverty.
The Nixon administration originally had assumed that individuals earning between 100 percent and 138 percent of poverty would get their health benefits through Medicaid expansion, says Missouri’s budget director, Linda Luebbering. She estimated that 80,000 Missourians fall into that income range. Estimates vary, but at least 260,000 Missourians, including the 80,000 mentioned by Luebbering, were expected to get health benefits through Medicaid expansion.
So far, state lawmakers have not agreed to expand Missouri’s Medicaid program. This could mean that individuals who earn between 100 and 138 percent of poverty might now turn to the insurance exchange for their health benefits.
Though expansion has not gained traction, supporters like Jeanette Mott Oxford, executive director of the Missouri Association for Social Welfare, have yet to give up on the idea. In the event the expansion effort fails during the regular legislative session, she says there still will be time to enact a law during a special session.
Unlike Medicaid expansion, Missouri’s insurance exchange program will go forward without state legislative action. Under the Affordable Care Act, the federal government will set up exchanges in states, like Missouri, that have refused to set them up on the own.
An exchange is an Orbitz-like system under which consumers would shop for health insurance in the same way they use the internet to find discounts on air travel and hotel reservations. The discounts or tax credits that individuals would get on health insurance would be based on household income, ranging from 100 percent to 400 percent of poverty. This means, for example, that a family of four with an income of $94,000 would qualify for health benefits through the exchange.
The Families USA study says working families in Missouri would make up more than 90 percent of those eligible for premium tax credits. It adds that young adults in Missouri, or those between the ages of 18 and 34, will make up the largest group, 35.8 percent, of those qualifying for the credits.
The credits and out-of-pocket costs will differ, depending on the type of health benefit package the individual or family chooses. Selecting a more expensive plan will mean more out-of-pocket costs. Under what the Families USA report calls a fairly standard plan, a family of four earning $47,100 a year might be expected to pay no more than 6.3 percent of their income toward premiums. The family would get a tax credit of $9,530 to cover the cost of health insurance.
While setting up an internet system to allow consumers to shop for health insurance is widely praised, the Families USA report suggests users will experience challenges along the way.
The report says Missouri and other states will need to “develop robust outreach programs to educate consumers about this new help.” Beyond putting in place consumer friendly, simple enrollment processes, the exchanges will have to have “complementary networks of assisters who can provide in-person, one-on-one help to anyone who needs it,” the study says.
In the case of Missouri and some other states that have refused to create exchanges, those responsibilities and challenges of making them work will be left to the federal government. Missouri lawmakers, who opposed the health reform law, have forbidden state workers to assist the federal government in setting up or running Missouri’s health exchange system. It is supposed to be open for business for enrolling participants on Oct. 1 with health insurance available on Jan. 1.