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Question for those on state insurance exchanges
Old 09-24-2020, 07:05 AM   #1
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Question for those on state insurance exchanges

Question: For those who use the state exchange in their state, is the income cutoff for a subsidy cutoff different than the federal cutoff? The federal cutoff in the lower 48 states is currently $67640.

Pennsylvania is launching its own state exchange on January 1st, with open enrollment beginning on November 1st. It has a website, Pennie.com, but not much information yet. One piece of information that is intriguing and leads to my question:

The website states that insurance will be subsidized for incomes less than ~$51K for singles and ~105K for couples, which is much different than the federal ACA cutoffs. I'm thinking that this might be a more intelligent version of the ACA, with a more graded level of subsidy. Currently, if our income is one dollar over the cliff, we pay full amount. If it is one dollar under, we save $1730/month.

The difference is remarkable and I'm curious what others' experiences have been.
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Old 09-24-2020, 07:37 AM   #2
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Old 09-24-2020, 07:42 AM   #3
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I don’t see any difference. The cutoff is 400% of FPL. From what I have seen for 2021 that would be 4*12,760 or $51,040.

That’s for singles, of course.
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Old 09-24-2020, 09:28 AM   #4
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I can't see how it would be different because we use the same federal income tax forms and instruction booklets, regardless of which state we live in. The only differences are for the lower 48 states (and DC) versus Alaska and Hawaii, which have some different tables.
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Old 09-24-2020, 09:53 AM   #5
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I donít see any difference. The cutoff is 400% of FPL. From what I have seen for 2021 that would be 4*12,760 or $51,040.

Thatís for singles, of course.
But for a couple it's ~$67K and the PA site lists $105K. Huge difference. I'd like to here from people in states who use a state exchange.
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Old 09-24-2020, 10:03 AM   #6
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The $105k must be for a family of 4. That FPL is 26,200. So, 4*26,200 yields $104,800.

The only way weíd get a different cliff is if PA came up with gobs of money for us. I wonder if some states will take that path someday.
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Old 09-24-2020, 10:06 AM   #7
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Yes, in California the subsidy cutoffs are different because we have a state law that provides additional subsidies for three years (2020 through 2022). Maybe Pennsylvania has passed a similar law?
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Old 09-24-2020, 10:12 AM   #8
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$68,960 for a household of 2. That might be for 2021.
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Old 09-24-2020, 12:24 PM   #9
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But for a couple it's ~$67K and the PA site lists $105K. Huge difference. I'd like to here from people in states who use a state exchange.
Do you have a link to Pennsylvania exchange website for the 2021 income limits?

Below is the one from California official Covered California site. They have not updated it for 2021 yet:
https://www.healthforcalifornia.com/.../income-limits

California state expanded the upper limit to 600% FPL. The 400% FPL is the limit for the rest of the country. The number you cite is very close to 400% FPL of a family of 4 from California.
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Old 09-24-2020, 01:08 PM   #10
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The $105k must be for a family of 4. That FPL is 26,200. So, 4*26,200 yields $104,800.

The only way weíd get a different cliff is if PA came up with gobs of money for us. I wonder if some states will take that path someday.
Thanks. I think you are correct. The system is brand new, and the phones don't open until 10/9/20. It's called Pennie.com (yes, not a .gov!). It was in the local news. Yay. I get to apply through healthcare.gov for December and a brand new system for next year. Oh joy! (sarcasm).
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Old 09-25-2020, 06:18 PM   #11
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Fellow Pennsylvanian here already on an ACA plan. Iíve been checking the Pennie.com site for a couple weeks now and it is gradually getting more and more info on it. But still nothing that helps very much.

Iím anxiously awaiting the launch so I can see what my provider, UPMC Health Plan, has in mind this year. I downloaded the massive spreadsheet of rate requests from the states Insurance Department website and can see what rates my countyís 2 providers have asked for for 2021. The good news is they are not drastically more than 2020. However, UPMC seems to be switching all policies in my county (Crawford) to HMOs. Fun stuff.

UPMC sent me a letter today saying they were discontinuing my plan and would be following up with details on new plans later.
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Old 09-25-2020, 09:18 PM   #12
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Why was Pennie created? In other words, who are the target clients and what advantages does Pennie claim to offer them, compared with other alternatives like healthcare.gov or similar?
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Old 09-26-2020, 05:39 AM   #13
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Why was Pennie created? In other words, who are the target clients and what advantages does Pennie claim to offer them, compared with other alternatives like healthcare.gov or similar?
States are permitted to offer their own health exchange website to replace the use of healthcare.gov. The plans that appear on the sites are still the ACA-compliant plans and they still follow the same rules for pricing and government subsidies. I haven't done an official count, but I would guess that at least 10-15 states have their own exchange rather than use healthcare.gov. I believe there are some laws that states can put in place on top of the basic ACA laws. And having their own exchanges make that easier.

The target audience is exactly the same.

According to what I've read, the reason PA set it up is to save the state money which they are then passing on to consumers in the form of lower rates on the insurance. It involves something called a reinsurance program. I don't really know what that entails, but it keeps the premiums down 5-10%, so they say.

Here is a link to the press release announcing the state's exchange:

https://www.media.pa.gov/pages/insur...spx?newsid=409
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Old 09-26-2020, 08:31 AM   #14
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Originally Posted by PaunchyPirate View Post
States are permitted to offer their own health exchange website to replace the use of healthcare.gov. The plans that appear on the sites are still the ACA-compliant plans and they still follow the same rules for pricing and government subsidies. I haven't done an official count, but I would guess that at least 10-15 states have their own exchange rather than use healthcare.gov. I believe there are some laws that states can put in place on top of the basic ACA laws. And having their own exchanges make that easier.

The target audience is exactly the same.

According to what I've read, the reason PA set it up is to save the state money which they are then passing on to consumers in the form of lower rates on the insurance. It involves something called a reinsurance program. I don't really know what that entails, but it keeps the premiums down 5-10%, so they say.

Here is a link to the press release announcing the state's exchange:

https://www.media.pa.gov/pages/insur...spx?newsid=409
Looks like the Feds skim about 3-3.5% off the premiums to pay for using the federal exchange. PA thinks they can run their own for much less and use some of the savings to buy reinsurance. I think that relieves the health insurance providers of some liability in high claim cost instances. They think that will allow us to see 5-10% lower premiums. That will be awesome if they can turn 3% into 10%. Of course, Iíll believe it when I see it.

Running their own exchange gives more control over things like marketing and outreach. Technically the target market is the same but the state could decide to do some things differently for pieces of that target market. Thatís where the outreach comes into play.
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Old 09-26-2020, 08:49 AM   #15
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Originally Posted by PaunchyPirate View Post
States are permitted to offer their own health exchange website to replace the use of healthcare.gov. The plans that appear on the sites are still the ACA-compliant plans and they still follow the same rules for pricing and government subsidies. I haven't done an official count, but I would guess that at least 10-15 states have their own exchange rather than use healthcare.gov. I believe there are some laws that states can put in place on top of the basic ACA laws. And having their own exchanges make that easier.

The target audience is exactly the same.

According to what I've read, the reason PA set it up is to save the state money which they are then passing on to consumers in the form of lower rates on the insurance. It involves something called a reinsurance program. I don't really know what that entails, but it keeps the premiums down 5-10%, so they say.

Here is a link to the press release announcing the state's exchange:

https://www.media.pa.gov/pages/insur...spx?newsid=409
They upped the reinsurance fund in CO last year, statewide reduced 18%, we got more in this rural county.
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Old 09-26-2020, 09:09 AM   #16
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Ahhhh, the state can qualify for some federal funds to pay for the reinsurance. Then PA will only pay 20-25% of the reinsurance costs. That’s where the magic happens!

https://www.witf.org/2019/07/02/penn...ing_next_year/
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Old 09-27-2020, 06:46 AM   #17
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Looks like the Feds skim about 3-3.5% off the premiums to pay for using the federal exchange. PA thinks they can run their own for much less and use some of the savings to buy reinsurance. I think that relieves the health insurance providers of some liability in high claim cost instances. They think that will allow us to see 5-10% lower premiums. That will be awesome if they can turn 3% into 10%. Of course, Iíll believe it when I see it.

Running their own exchange gives more control over things like marketing and outreach. Technically the target market is the same but the state could decide to do some things differently for pieces of that target market. Thatís where the outreach comes into play.
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Summarizing: PA saves money by not paying the Federal government for services to utilize the Fed-based exchange. PA operates its own exchange more cost effectively than the Federal one, and passes the savings to the consumer.

Bottom line, the consumer wins. Is this correct?
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Old 09-27-2020, 07:37 AM   #18
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Summarizing: PA saves money by not paying the Federal government for services to utilize the Fed-based exchange. PA operates its own exchange more cost effectively than the Federal one, and passes the savings to the consumer.

Bottom line, the consumer wins. Is this correct?
Thatís the theory in a nutshell. We will see shortly if it works out that way.
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