Many Georgians projected to get exchange subsidy

More than 800,000 Georgians will be eligible for new government subsidies next year to buy coverage in a health insurance exchange, according to a report released Wednesday.

The subsidies or tax credits will help defray the cost of insurance for individuals and families on the new exchanges, set to launch in January under the Affordable Care Act.

The report, from consumer advocacy group Families USA, a longtime supporter of the 2010 health care law, also found that most Georgians eligible for credits are in working families and have incomes between two and four times the federal poverty level, or about $47,100 to $94,200 for a family of four.

The lower a person’s income, the higher the subsidies will be. The money generally won’t go directly to taxpayers but to insurers, with the consumer getting the benefit in reduced premiums.

The credits are “a game changer’’ for individuals and families now uninsured or in the individual insurance market, said Ron Pollack, executive director of Families USA.

“The tax credit premium subsidy will reach into the middle class,’’ Pollack added. In Georgia, nearly 90 percent of those eligible for the credit are in families in which at least one person is a worker.

Two-thirds of the eligible Georgians are ages 18 to 54. Slightly more than half are white, 28 percent black, and 13 percent Hispanic, the study found.

The counties with the highest numbers of people eligible are clustered in the populous metro Atlanta area: Fulton, with 77,410; Gwinnett, 71,510; DeKalb, 62,510; and Cobb, 48,940.

Georgia has 1.9 million uninsured — roughly one in five residents. That’s one of the highest uninsured populations and rates in the nation, noted Cindy Zeldin of consumer group Georgians for a Healthy Future.

“There’s still a lot of confusion about the upcoming changes,’’ Zeldin said. Currently, she noted, individual and family insurance policies are often expensive and have major coverage gaps. The credits will “level the playing field’’ in insurance for those who don’t have access to job-based coverage, she said.

“Too many consumers don’t yet know that tax credits are available to them,’’ Zeldin added.

Arguments over the ACA

The National Federation of Independent Business and other opponents of the ACA predict that many individuals will forgo the tax credits and remain uninsured, paying the penalty for not having coverage.

The exchanges are one of two principal ways that the designers of the ACA envisioned expansion of insurance coverage.

The other way was through states expanding their Medicaid programs. But last year’s Supreme Court decision on the ACA essentially turned that from a requirement for states into an option.

Gov. Nathan Deal, backed by other top Republicans in Georgia, says he won’t expand Medicaid. He cites the cost to the state and the current financial problems engulfing the program.

To expand or not to expand?

Pollack on Wednesday called expansion “a no-brainer’’ for a state. Not only is it heavily subsidized by the federal government — which pays 100 percent of the cost for the first three years — but local and state governments will see their current outlays for care to the uninsured drop, he said.

Taxpayers in non-expansion states will be subsidizing care for patients in California and other states that decide to expand, he said.

The estimated Georgia figure of 802,610 people eligible for credits could increase if the state continues to reject expansion of Medicaid, Pollack said.

The study by the Lewin Group assumes that a state will expand Medicaid. And some people earning from 100 percent to 138 percent of the poverty level — who would join Medicaid under expansion — could opt for the tax credits if Georgia sticks to its current decision.

But adults under 100 percent of poverty won’t qualify for subsidies because the ACA’s designers assumed states would expand Medicaid to cover them, Pollack said. “They’re out in the cold – the poorest of the poor.’’

According to projections, Medicaid expansion, if carried out, would add more than 650,000 people to Georgia’s rolls.

A possible influx into exchanges

The Families USA study’s release comes after news articles Tuesday reported the administration is limiting small businesses in Georgia and most other states to offering their employees just a single health plan – instead of several – in an insurance exchange for small businesses. This limitation will reportedly be just for 2014.

The exchange for individuals and families is expected to provide a range of choices of health plans from the start.
David Howard, a health policy professor at Emory’s Rollins School of Public Health, told GHN on Wednesday that the number of people eligible for credits demonstrates the impact of the ACA on the health insurance market.

He said some employers may be induced to drop insurance and have workers join the individual exchange.

The cost of Medicaid expansion to the state “is a non-trivial outlay,’’ Howard said. The ACA has many benefits, he said, but “it’s also incredibly costly to the states and federal taxpayers.’’

But if a state doesn’t expand Medicaid, the safety-net hospitals would lose millions in federal money for care to the poor, he noted. It would be “very hard for a governor to resist all that money’’ that a Medicaid expansion would bring to a state, Howard said.

Meanwhile, the Associated Press, in article Tuesday, noted that the millions of Americans who take advantage of the subsidies in exchanges could get hit by surprise tax bills if they don’t accurately forecast their income.

The AP noted that when consumers apply for the subsidy this fall, the government won’t know their income for 2013. And unless told otherwise, the government will base that credit on their 2012 income.

So a family getting a raise next year would wind up with a subsidy in 2014 that’s larger than is justified. The family may have to pay back at least part of the money in the next tax return, the AP article said.