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Ask the Times: Obamacare edition


Obamacare is coming. Enrollment in the Arkansas Health Insurance Marketplace begins Oct. 1, with coverage set to start in January. But with the law gearing up, many still have questions about what the new coverage options mean for them. And we have answers! Here are a few queries we've received lately. (Note: All of the questions below are about the individual insurance market; if, like most people, you're getting your insurance through an employer or through a public program like Medicaid or Medicare, you typically won't see much change.)

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Q. I know that under Obamacare, insurance companies will have to take everyone. They won't be able to deny coverage based on pre-existing conditions. But what about price? Is there any regulation in place that limits insurers from gouging people with pre-existing conditions?

A. Yes. Under Obamacare, not only will plans not be able exclude people because of their health history, they also won't be allowed to discriminate in price based on people's health. You know the forms that you fill out with your medical history to sign up for insurance ("underwriting")? No more. There are only four things that insurance companies can use to determine your premium price:

• family situation (individual or family)

• where you live (Arkansas is divided into seven rating areas)

• whether you smoke (smokers can be charged 1.5 times more)

• age (but insurers are limited to charging the oldest consumers no more than 3 times what they charge the youngest).

This part of the law is known as "community rating." Pre-Obamacare, insurers set premiums largely based on things like gender, health status and use of medical services (or used age as a factor at a higher rate than 3:1). Community rating is a major change from the status quo. Under Obamacare, for example, a non-smoking 30-year-old in Little Rock will get the same rate as a healthy man or a cancer survivor or a pregnant woman.

Q. Are there any regulations in place for the marketplace that prevent insurers from raising their rates between the time when a new customer is approved for coverage and when the coverage goes into effect?

A. Yes. Your rate will be guaranteed for the full calendar year. New rates will come out each year and go into effect each January. Obamacare will also offer protections to ensure that insurers can't drop you from coverage (for example, the law will eliminate annual or lifetime dollar caps, so you won't have to worry about suddenly losing coverage in the event of a catastrophe).

Q. My insurance company said that I could keep my plan for one more year instead of going to Obamacare. Is this a good deal?

A. If your current private plan has lower rates than the Obamacare plans, it's possible to keep it for most of calendar year 2014. Likewise, healthy people currently without insurance looking for a cheap deal can sign up for a private plan not on the exchange in December and keep it for most of the calendar year. The law allows people to sign up or renew for a full year late in 2014, and insurance carriers in Arkansas are promoting the practice. But be careful: Going this route means you won't get subsidies, and you won't be getting the additional coverage and consumer protections that come with Obamacare. For example, these plans may not offer maternity coverage, while Obamacare plans will. Insurance carriers are also promoting new 364-day non-Obamacare plans. Here you'll want to be doubly careful, because the 364-day plans  will force you to pay the individual mandate penalty, something that insurance companies are not being clear to customers about. In 2014, the penalty is whichever is greater: $95 or 1 percent of household income above the filing threshold ($10,000 for an individual, $20,000 for married filing jointly). The various loopholes to get non-Obamacare coverage definitely may be a good option for some, but you'll want to read the fine print (and likely do some math).

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