Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
June 23--CHEYENNE -- More than 8 million Americans have enrolled in health-care insurance since the Affordable Care Act went into effect late last year, and another 3 million low-income Americans were able to get on Medicaid thanks to state expansions.
But here in Wyoming, one of 23 states that has thus far declined to expand the state's Medicaid eligibility, those low-income adults looking to buy their own insurance are facing an uphill battle steeper than anywhere else in the nation.
A new report published Wednesday by health insurance analysis company HealthPocket found that low-income Wyomingites pay the highest premiums in the country when purchasing plans through the ACA insurance marketplace. The report specifically looks at those adults who fall into the "Medicaid gap" -- people who make less than 100 percent of the poverty level, and are thus ineligible for tax credits to help them buy insurance.
Such subsidies are given to those earning between 100 and 400 percent of the federal poverty level, which is defined as $11,490 a year for an individual. For those earning less than that, Medicaid was supposed to cover the gap, but a Supreme Court ruling made the expansion of Medicaid optional for states.
In its report, HealthPocket looked at the cheapest available catastrophic, bronze and silver health insurance plans in each of the 23 states that have chosen not to expand Medicaid. It then determined that if someone were making just under 100 percent of the poverty level, what proportion of their income would go solely to the cost of that coverage.
"The Affordable Care Act defined affordable coverage for an employee in employer-provided coverage to have premium costs at most 9.5 percent of the employee's household income," the report read.
"By this definition of affordability, the only affordable exchange plan for any enrollees with incomes below 100 percent FPL that were ineligible for Medicaid was the cheapest catastrophic health plan in Kansas."
In other words, of the 69 "tiers" of plans being offered among the 23 non-Medicaid expansion states, only one was deemed affordable for low-income earners. Specifically, the cheapest catastrophic insurance plan being offered by Kansas would cost a 30-year-old enrollee $87.71 a month, or about 9 percent of the total earnings for someone making just under the poverty level.
Every other plan in the non-Medicaid expansion states exceeded that percentage, but nowhere were they higher than in Wyoming. That same type of catastrophic coverage plan in Wyoming runs $265.34 a month for a 30-year-old nonsmoker, totaling 28 percent of a poverty-level income.
And it just gets worse for more inclusive plans and for older people. A 50-year old looking to purchase a silver plan on Wyoming's insurance exchange can expect to pay at least $523.61 a month, or more than half a poverty-level income.
Dan Neal, the director of the Casper-based Equality State Policy Center, said such rates make it virtually impossible for Wyoming's poorest to afford health insurance.
"Frankly, if you're below 100 percent of poverty level, you probably couldn't afford the 9 percent you see in Kansas," Neal said. "How can anybody with that little money pay that much of their income on health insurance and still expect to feed themselves, keep a roof over their heads and then pay for transportation to go to work? It's just impossible."
The obvious solution, to Neal at least, is for Wyoming to expand Medicaid to the 17,000 uninsured currently living below the poverty level.
But while the state Legislature in March empowered Gov. Matt Mead to negotiate such a plan with the federal Centers for Medicare and Medicaid Services, it doesn't appear that much has come of those negotiations.
"We've heard that they are talking, but that's all we've heard," Neal said. "It'd be great to find out what they've discussed and what they're proposing."
Gov. Mead's office declined to comment on the progress of Medicaid negotiations, deferring instead to Wyoming Department of Health Deputy Director Lee Clabots, who indicated that little has been discussed so far.
"There has been some preliminary touching base with the regional (Medicaid) office here, but beyond that, nothing has really happened," Clabots said. "I don't think we'd expect something more until early fall sometime."
Neal said he's concerned that any Medicaid expansion the governor proposes could come with a work requirement, which is a non-starter with many expansion activists.
"There are certain things in these discussions we think are complete deal-breakers, and one of them is a work requirement," Neal said. "Many (uninsured Wyomingites) are already working, and others are at home taking care of a spouse or other family member, and some are simply sick and can't work."
Those concerns are shared by Jan Cartwright, the executive director of the Wyoming Primary Care Association, which provides technical assistance and training to the community health centers across the state that provide care to the uninsured.
"A single person at 100 percent of poverty makes less than $1,000 a month, and in many cases, they're already working, so it's sort of a moot point," Cartwright said.
"There's a real unfairness in this where people who could be eligible for Medicaid have to buy insurance outright, yet people at 200 percent of poverty level get subsidies. I just don't see the fairness in that."
Cartwright said she's hopeful that, as implementation of the ACA continues, more insurers will express interest in joining Wyoming's insurance exchange. If that were to happen, she said, the increased competition could drive down overall rates, making it easier for lower-income residents to afford coverage.
But Tom Hirsig, the state's insurance commissioner, said Wyoming provides some unique challenges to health insurance companies that has so far dissuaded all but two from joining the state's exchange. The key problems, he said, are the state's low population and the lack of any real major population centers.
"When you look at prices of insurance, you can't compare Wyoming to metropolitan areas with millions of people," Hirsig said. "We don't have lots of doctors, and we're so spread out that preventative care is sometimes not accessible to people in Wyoming. Every state except Wyoming has a population center."
He added that the idea that insurance companies are taking advantage of the relative lack of competition in order to "gouge" customers is misguided, given that the ACA mandates how much profit insurers can make off of exchange enrollees.
Specifically, insurers can only use 20 percent of subscriber premiums to cover administrative costs and investor profits. The rest must be spent on medical care and related quality improvement activities.
"If they don't meet that, they have to refund premiums to their customers," Hirsig said. "So insurance companies aren't the ones getting rich. If insurance companies were getting rich, we'd have lots of insurance companies here."
Hirsig has been encouraging insurance companies to take part in Wyoming's exchange, but most, he said, have their sights on larger markets, and it's unclear whether any will opt to join Wyoming's exchange in the coming year.
"It's probably not going to change anytime soon," he said.
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