A study released in February for the state of North Carolina found there approximately 40 percent of North Carolina residents who will use the new online health insurance exchange to purchase their health insurance and this group is currently uninsured. To put that in clearer terms, North Carolina, according the United States Census Bureau, has about 3.9 million people uninsured.
As of now, North Carolina has 23 commercial health insurance companies for individuals and 27 for small group health insurance plans. When the Federal Health Exchange goes live Oct. 1, 2013, the exact number of health insurance carriers may be equal or less than what is available now. In some models, I have seen the top three health carriers for a state as the key participants in their plans. Since North Carolina is going to have a federal health exchange and the program is going to operate on a national level and not state level, there should be fair number of health carriers available.
Recently, questions by hospitals and doctors have raised concerns over how they will be paid and what impacts the federal health exchanges will have on them? As of this moment, there are more positives than negatives; hospitals and physicians should benefit. According to the report requested by the state, 3.9 million people in North Carolina do not have health insurance. Even with all the tax credits offered, the questions remains: Will 3 million people purchase health insurance under the new law? The answer will have to wait. While the exact premium rates are still in the process of being formulated, tax credits will be a major incentive for people to purchase health insurance. Since a segment of the population will have insurance, hospitals will treat more patients with coverage that is backed by health insurance carriers such as BCBS, United Healthcare or Humana. Hospitals and physicians will see an increase in the number of patients, but they will be paid by the individual health insurance companies, not the federal government. Let me state that point again. I have heard from a number of medical people on this issue, so let’s look at fact and not myth. This is not Medicaid; many of the same insurance companies doing business in North Carolina today will be doing business in the state on Jan. 1. 2014. Payments will come from them just as payments are today. If you are a hospital or doctor and a person purchases a plan from United Healthcare in the federal health insurance exchange, the hospital or doctor should receive the same payment as before. In theory, that is the way the program is set up; we will have to see if it works exactly that way.
I would like to revisit the tax credits again since many people still have questions. Since this is still a work in progress, North Carolina residents will have to wait until September to get the exact calculations of what insurance rates are going to be like. The final rates paid by an individual or small business will be based on several factors, but the two key areas will be the tax credit and coverage selected. In previous articles, I discussed the four plans offered in the exchange — Bronze, Silver, Gold, and Platinum. In addition, I have discussed how the sliding scale of the Federal Poverty Guide will be the other key area. Remember, the actual tax credit which will be instantly applied to offset the monthly health insurance premium.
For illustration only: A family of four, making $35,000 a year, has no health insurance and selects the Gold plan through one of the health insurance carriers. Thje cost of $950 minus the $780 in a tax credit would mean the family pays $170 a month to whatever health carrier they selected. Once again, this is the theory and we will see fact on Oct. 1.
^Darek Hunt, a Lumberton resident, has his master’s degree in Public Policy and Administration and is a doctoral student in Health Sciences. He specializes in health care administration and health policy.