Broker: Families Must Weigh Cost Of Food Vs. Health Insurance

Dec. 20--A local benefits broker said some area families are weighing the cost of groceries next to spiking rates for government-subsidized health insurance.

Bryce Heinbaugh, managing member of Insurance Exchange Network in Jefferson, is warning of steep health insurance premium increases coming next year for Affordable Care Act enrollees that are making area residents consider canceling their coverage altogether. According to the latest federal figures given to Medical Mutual, the state's largest insurer, the hikes are coupled with reduced subsidies.

A new ACA mandate taking effect in January replaces aggregate deductibles for families with what's called "embedded deductibles."

Essentially, a family carrying an ACA bronze plan that would have a $12,000 total deductible for all family members -- a bronze-insured single individual gets a $6,000 deductible -- will have $6,000 deductibles for each family member next year. These new

deductibles are required for every marketplace plan moving forward.

"So the insurance companies have to pay out much sooner than if it was just one big aggregate $12,000 deductible," Heinbaugh said. "The insurance companies are on the hook. ... It's greater risk. The greater the risk, the greater the price."

At the same time, those eligible for subsidies -- by making under 250 percent of the poverty limit, or about $50,000 for a family of three -- will see that

relief slashed in 2016. But Heinbaugh, and even HealthCare.gov marketplace staffers, don't know why, he said.

"That's the elephant in the room right now. ... They can't provide an answer. They simply say, 'We don't know,'" he said, while insurance companies defer back to the marketplace. Heinbaugh's best guess is it's caused by language buried somewhere in the 22,000-page act itself.

The subsidies are based on family size, household income, geographic area and tobacco use.

Heinbaugh produced a real-life example of their total dollar amount's impact, based on two of his client families -- grain farmers in the county:

In 2015, "Bill" and his family had an about $788 monthly premium, but paid only about $258 after the subsidy. Next year, that subsidy drops by about $200, while the premium jumps by about $170. Although Heinbaugh said "nothing's

changed with this family at all," the family can expect an almost $600 monthly premium in 2016.

According to recent 2015-2016 marketplace data by Health Insurance Exchanges, Ohio residents will next year see an average hike of 10.5 percent for a gold plan; 9.9 percent for bronze; and 7.5 percent for silver. Those figures are each a few points lower than the national averages, but other states have been hit harder -- Alaska has the highest average premium increase at 35 percent for a 27-year-old male, according to the data.

"On a macro level, I see this upsetting a heck of a lot of people that initially supported (ACA)," Heinbaugh said -- and affordable alternatives for them are running out, now that most insured families have already sought out the cheapest plans.

"My answer to everyone is, 'You're at the end of your rope, so you either take it as it is or you cancel the insurance altogether and pay the new federal penalty'" -- that's 2.5 percent of annual household income, or $1,250 for a family that brings in $50,000 a year, assessed at tax season -- "a lot less expensive" than an ACA premium, but still a sizable end-of-year amount for that demographic, he said.

He said another option is to join one of four restrictive HMOs, only one of which serves Ashtabula County: Molina Healthcare, which covers Ashtabula County Medical Center or the Cleveland MetroHealth System. Customers have to be referred by an HMO-approved physician.

Heinbaugh said

he's written U.S. Rep. David Joyce about the recent flux -- although he hasn't received a reply -- and urges

others affected by the new spikes to do the same.

The open enrollment period for Jan. 1, 2016 coverage ended at 11:59 p.m. Thursday. Those who received last-minute rate hike notices still have until Jan. 15 to make changes for February by calling the marketplace or their insurance agent.

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