MONEY Ask the Expert

The Right Way to Kick Your Kid Off Your Health Insurance

140603_FF_QA_Obamacare_illo_1
Robert A. Di Ieso, Jr.

Q. I am covered by my employer’s health plan, but I’m not happy with it. My son is 21 and currently covered under my plan. While I realize that I am not eligible for Obamacare, I am curious if I can terminate my son’s policy so that he might be eligible.

A. Since the open enrollment period to sign up for coverage on the state marketplaces ended Feb. 15, in general people can’t enroll in a marketplace plan until next year’s open enrollment period rolls around.

If you drop your son from your employer plan, however, his loss of coverage could trigger a special enrollment period that allows him to sign up for a marketplace plan. Whether he’s entitled to a special enrollment period depends on whether his loss of coverage is considered voluntary, say officials at the Centers for Medicare & Medicaid Services.

In general, voluntarily dropping employer-sponsored coverage doesn’t trigger a special enrollment period for individuals or their family members. But if you drop your son’s coverage on his behalf without his consent, his loss of coverage wouldn’t be considered voluntary and your son could qualify, according to CMS.

Whether he’ll be eligible for premium tax credits to make marketplace coverage more affordable is another matter, says Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities.

If you claim him as your dependent, he generally won’t be eligible. If you don’t claim him as your dependent, he would have to qualify for subsidies based on his own income.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

MONEY Health Care

Why Your Next Doctor’s Bill Could Be Surprisingly Painful

Figuring out if a medical provider is on your health insurance plan isn't always as straightforward as you'd think. And that can mean a much higher bill than you expect.

“Is this doctor in my insurance network?” is part of the litany of questions many people routinely ask when considering whether to see a particular doctor. Unfortunately, in some cases the answer may not be a simple yes or no.

That’s what Hannah Morgan learned when her husband needed surgery last fall to remove his appendix. When they met with the surgeon at the hospital emergency department near their Lexington, Ky., home, Morgan asked whether he was in the provider network for her husband’s individual policy, which he bought on the Kentucky health insurance exchange. The surgeon assured her that he was. When she got home, Morgan confirmed that he was in network using the online provider search tool for her husband’s plan.

But when she read the explanation of benefits form from the insurer, the surgeon’s services were billed at out-of-network rates, leaving the couple on the hook for $747.

The surgeon’s office later told her that he belonged to two different medical groups. One was in Morgan’s husband’s health plan network, the other wasn’t. Following multiple phone conversations with the surgeon’s office and the insurer, the in-network rates were applied and the Morgans’ share of the bill shrunk to $157.

“I did everything I was supposed to do,” says Morgan, 26. “You feel kind of hopeless. I thought I did it right, and there’s still another hoop to jump through.”

Consumers who use out-of-network providers can rack up huge bills, depending on the care required. Health maintenance organizations generally don’t cover any non-emergency services provided by physicians or hospitals outside the plan’s network of providers. Preferred provider organizations typically do cover out-of-network services, but pay a smaller percentage of the charges, 70% instead of 80%, for example. Out-of-network services may have higher deductibles and higher out-of-pocket maximums as well.

Although it’s not routine, physicians may belong to more than one medical group, say experts. Surgeons, for example, may join a couple of medical groups to expand the number of hospitals that they’re affiliated with.

Even then, sussing out in-network providers may not be straightforward. Just because a medical group is in someone’s provider network, consumers can’t be confident that all the physicians in the medical group are also in network.

“Physician groups can be in network even though individual physicians in that group may not be,” says Susan Pisano, a spokesperson for America’s Health Insurance Plans, a trade group.

That situation might occur if some of the physicians in a medical group agreed to accept the rates negotiated with an insurer, but others did not, says Dr. Jay Kaplan, an emergency physician who’s president-elect of the American College of Emergency Physicians. The physicians who didn’t accept the network rate would be out-of-network for a patient, even if other members of the medical group were in network.

Consumer advocates say the lack of transparency is unfair to consumers.

“It’s 2015. Federal law requires Americans to buy health insurance,” says Mark Rukavina, a principal at Community Health Advisors in Chestnut Hill, Mass. “There’s something fundamentally wrong when you can only figure out what questions to ask after the fact.”

In addition to confusion about doctors who are part of more than one practice, consumers may also run into billing troubles if their doctor operates practices in different locations and accepts different insurance plans at each, say billing experts.

A podiatrist may see patients at one office location two days a week, and at another office location the rest of the week. Each practice may accept different insurance plans, and a patient may be in network only at one location.

If the physician’s office submits the paperwork to the insurer with the tax identification number for the wrong office location, the patient may get hit with an out-of-network charge. In that case, the patient may have to contact the doctor’s staff and ask them to resubmit the charges through the other practice. Generally that should solve the problem, experts agree.

Adding to the confusion is the fact that even if a physician is in a consumer’s insurance network, the hospital or clinic she works at may not be or vice versa. When undergoing a procedure or treatment, the patient could get hit with out-of-network facility and other charges.

More consumers may face out-of-network problems as health plans shrink the size of their provider networks in an effort to keep costs down.

“Health plans work very hard to see that consumers have the information they need and resources to turn to when they have questions,” AHIP’s Pisano said, noting that the Healthcare Financial Management Association and AHIP’s foundation have online guides to help consumers. Still, she added, “There is clearly also a responsibility on the part of providers to be more transparent.”

Consumers such as Morgan shouldn’t have to bear the burden when that is unclear, says Rukavina.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

MONEY Taxes

You Just Got a Break If You Messed Up Your Obamacare Tax Credit

The IRS will give you more time to pay back any excess premium subsidies when you file your taxes.

Consumers who received too much in federal tax credits when buying insurance on the health law’s marketplaces last year got a reprieve of sorts from the Internal Revenue Service this week. Although they still have to repay some or all of the excess subsidies, the IRS won’t ding them with a late payment penalty if they don’t repay it by the April 15 tax deadline.

“They’re trying to make this work,” says Timothy Jost, a law professor at Washington and Lee University who’s an expert on the health law.

Under the law, people with incomes between 100% and 400% of the federal poverty level ($11,670 to $46,680 for an individual in 2014) who did not have insurance through their job could qualify for tax credits to make premiums more affordable. They could elect to have these subsidies paid in advance directly to the insurance company, and many did. A typical tax credit was about $3,000 annually.

The amount people received was based on an estimate of their 2014 income. At tax time, that amount has to be reconciled against consumers’ actual income on IRS Form 8962. If consumers or the marketplace underestimated their 2014 income, they may have received too much in tax credits and have to pay back some or all of it.

How much people have to repay is based on their income and is capped at $2,500. People with incomes over 400 percent of the poverty line have to repay the entire amount, however.

This penalty reprieve only applies to the 2014 tax year. The IRS will allow people to repay what they owe on an installment basis. But be forewarned: Interest will continue to accrue until the balance is paid off.

MONEY Taxes

How Obamacare Could Make Tax Filing Trickier This Year

Affordable Care Act health insurance marketplace navigator Herb Shook pulls up information on his computer to help someone re-enroll in an Affordable Care Act health insurance plan Friday, Nov. 14, 2014, in Houston.
David J. Phillip—AP If you got a health insurance subsidy via the online marketplace, you may have more work to do on your tax return.

For the first time, you'll need to show that you had health insurance last year. For some, that means more paperwork.

In addition to the normal thrills and chills of the income tax filing season, this year consumers will have the added excitement of figuring out how the health law figures in their 2014 taxes.

The good news is that for most people the only change to their normal tax filing routine will be to check the box on their Form 1040 that says they had health insurance all year.

“Someone who had employer-based coverage or Medicaid or Medicare, that’s all they have to do,” says Tricia Brooks, a senior fellow at Georgetown University’s Center for Children and Families.

The law requires people to have “minimum essential coverage,” but most types of insurance qualify.

But for others, here are several situations to keep in mind.

If you were uninsured for some or all of the year

If you had health insurance for only part of 2014 or didn’t have coverage at all, it’s a bit more complicated. In that case, you’ll have to file Form 8965, which allows you to claim an exemption from the requirement to have insurance or calculate your penalty for the months that you weren’t covered.

On page 2 of the instructions for Form 8965 you’ll see a lengthy list of the coverage exemptions for which you may qualify. If your income is below the filing threshold ($10,150 for an individual in 2014), for example, you’re exempt. Likewise if coverage was unaffordable because it would have cost more than 8% of your household income, or you experienced a hardship that prevented you from buying a marketplace plan, or you had a short coverage gap of less than three consecutive months. These are just some of the circumstances that would allow you to avoid the penalty.

In addition, you don’t have to pay a penalty if you live in a state that didn’t expand Medicaid to adults with incomes up to 138% of the federal poverty level $16,104.60 for an individual in 2013) and your income falls below that level.

Some of the exemptions have to be granted by the health insurance marketplace, but many can be claimed right on your tax return. The tax form instructions spell out where to claim each type of exemption.

If you do have to go to the marketplace to get an exemption, be aware that it may take two weeks or more to process the application. Act promptly if you want to avoid bumping up against the April 15 filing deadline, says Timothy Jost, a law professor at Washington and Lee University who is an expert on the health law.

If you don’t qualify for a coverage exemption

If none of the exemptions apply to you, you’ll owe a penalty of either $95 or 1% of your income above the tax filing threshold, whichever is greater. The penalty will be prorated if you had coverage for at least part of the year. The amount of the penalty is capped at the national average premium for a bronze level plan, or $2,448 for an individual in 2014.

The instructions for Form 8965 include a worksheet to calculate the amount of your penalty.

If you received a premium tax credit for a marketplace plan

Under the health law, people with incomes between 100% and 400% of the federal poverty level ($11,490 to $45,960 for an individual in 2013) could qualify for premium tax credits for 2014 coverage bought on the exchanges. If consumers wished, the tax credit was payable in advance directly to the insurer. Many chose that option.

The marketplace determined the amount of premium tax credit people were eligible for based on their estimated income for 2014. At tax time those estimates will be reconciled against actual income. People whose actual income was lower than they estimated may have received too little in advance premium tax credits. They can claim the amount they’re owed as a tax refund.

People whose income was higher than estimated and received too much in advance premium tax credits will generally have to pay some or all of it back. The amount that must be repaid is capped based on a sliding income scale, but people whose income is 400% of poverty or higher will have to pay the entire amount of any tax credit back.

If you bought a plan on the marketplace, you’ll receive a Form 1095-A from your state marketplace by Jan. 31 that spells out how much your insurer received in advance premium tax credits. You’ll use that information to complete Form 8962 to reconcile how much you received against the amount you should have received.

Assuming the information on the form is correct, “It should be easy to reconcile,” says Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities. Tax software programs and tax preparers should know how to make the calculations, she said.

In addition to using commercial tax software or hiring tax preparer, many lower income consumers and seniors can get free tax preparation assistance through the IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) programs.

Despite resources to help consumers, this first filing season is likely to be bumpy, particularly for people who have complicated family situations or who receive inaccurate information from the marketplace.

“There is just so much confusion out there,” says Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation (KHN is an editorially independent program of the foundation.). “People are going to see these forms and not have any idea what they’re supposed to do with them.”

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

MONEY Health Care

Why You Could Have to Foot the Full Bill for a Weight-Loss Drug

The government has approved more drugs that suppress your appetite, but not all insurers will pick up the tab for the prescription.

In December, the Food and Drug Administration approved a new anti-obesity drug, Saxenda, the fourth prescription drug the agency has given the green light to fight obesity since 2012. But even though two-thirds of adults are overweight or obese—and many may need help sticking to New Year’s weight-loss resolutions—there’s a good chance their insurer won’t cover Saxenda or other anti-obesity drugs.

The health benefits of using anti-obesity drugs to lose weight—improvements in blood sugar and risk factors for heart disease, among other things—may not be immediately apparent. “For things that are preventive in the long term, it makes plan sponsors think about their strategy,” says Dr. Steve Miller, the chief medical officer at Express Scripts, which manages the prescription drug benefits for thousands of companies. Companies with high turnover, for example, are less likely to cover the drugs, he says.

“Most health plans will cover things that have an immediate impact in that plan year,” Miller says.

Miller estimates that about a third of companies don’t cover anti-obesity drugs at all, a third cover all FDA-approved weight-loss drugs, and a third cover approved drugs, but with restrictions to limit their use. The Medicare prescription drug program specifically excludes coverage of anti-obesity drugs.

Part of the reluctance by Medicare and private insurers to cover weight-loss drugs stems from serious safety problems with diet drugs in the past, including the withdrawal in 1997 of fenfluramine, part of the fen-phen diet drug combination that was found to damage heart valves.

Back then, weight-loss drugs were often dismissed as cosmetic treatments. But as the link between obesity and increased risk for type 2 diabetes, heart disease, cancer and other serious medical problems has become clearer, prescription drugs are seen as having a role to play in addressing the obesity epidemic. Obesity accounts for 21% of annual medical costs in the United States, or $190 billion, according to a 2012 study published in the Journal of Health Economics.

The new approved drugs—Belviq, Qsymia, Contrave and Saxenda—work by suppressing appetite, among other things. Saxenda is a subcutaneous injection, the other three drugs are in pill form. They’re generally safer and have fewer side effects than older drugs. In conjunction with diet and exercise, people typically lose between 5% and 10% of their body weight, research shows, modest weight loss but sufficient to meaningfully improve health.

The drugs are generally recommended for people with a body mass index of 30 or higher, the threshold for obesity. They may also be appropriate for overweight people with BMIs in the high 20s if they have heart disease, diabetes or other conditions.

In 2013, the American Medical Association officially recognized obesity as a disease.

Nevertheless, “people still assume that obesity is simply a matter of bad choices,” says Ted Kyle, advocacy adviser for the Obesity Society, a research and education organization. “At least half of the risk of obesity is inherited,” he says.

Many people who take an anti-obesity drug will remain on it for the rest of their lives. That gives insurers pause, says Miller.

The potential cost to insurers could be enormous, he says.

Susan Pisano, a spokesperson for America’s Health Insurance Plans, a trade group, says the variability of insurer coverage of anti-obesity drugs “relates to issues of evidence of effectiveness and evidence of safety.”

In 2012, the U.S Preventive Services Task Force, a non-partisan group of medical experts who make recommendations about preventive care, declined to recommend prescription drugs for weight loss, noting a lack of long-term safety data, among other things. But its analysis was based on the older drugs orlistat, which is sold over the counter as Alli or in prescription form as Xenical, and metformin, a diabetes drug that has not been approved for weight loss but is sometimes prescribed for that by doctors.

The task force did recommend obesity screening for all adults and children over age 6, however, and recommended patients be referred to intensive diet and behavioral modification interventions.

Under the health law, nearly all health plans must cover preventive care recommended by the task force without cost sharing by patients. Implementation of the obesity screening and counseling recommendations remains a work in progress, say experts.

Dr. Caroline Apovian, director of the Nutrition and Weight Management Research Center at Boston University, says many of the patients she treats can’t afford to pay up to $200 a month out of pocket for anti-obesity drugs.

“Coverage has to happen in order for the obesity problem to be taken care of,” says Apovian. “Insurance companies need to realize it’s not a matter of willpower, it’s a disease.”

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

MONEY Health Care

The Key Numbers to Look for When You’re Picking a Health Plan

pill bottle with numbered pills around it
Tim Robberts—Getty Images

Monday is the deadline to buy insurance if you want it on January 1. But don't shop solely on the premium. A new study finds that many exchange-sold plans have lower-than-expected out-of-pocket caps, a boon for some health care consumers. But deductibles are up.

Consumers shopping on the health insurance marketplaces will find many plans with out-of-pocket spending limits that are lower than the maximums allowed under the health law, according to an analysis by Avalere Health.

Seventy-four percent of 2015 silver level plans’ out-of-pocket spending caps are below the $6,600 spending limit allowed for individual plans and $13,200 maximum for family plans, according to Avalere, a consulting firm. The average out-of-pocket maximum for 2015 individual silver plans will be $5,853, says Caroline Pearson, a vice president at Avalere. Silver was the most popular plan type this year, selected by about two-thirds of enrollees.

After a policyholder reaches the out-of-pocket spending limit during the year, the insurer pays all the bills, unless, for example, they involve doctors and hospitals not in the health plan’s network.

The vast majority of other plans also feature lower limits on out-of-pocket spending—which includes deductibles, copayments, and co-insurance, but not premiums. Seventy-one percent of bronze plan spending limits were below the allowed maximum (with an average spending limit for single coverage of $6,381), as were 94% of gold plans (average limit, $4,458) and 98% of platinum plans (average limit, $2,145).

Avalere said the average spending limits for single coverage were in most cases close to those for 2014 plans: bronze ($6,330); silver ($5,877); gold ($4,443) and platinum, $2,795.

Avalere’s analysis included plans sold on the federal marketplace that serves 37 states, as well as data from the California and New York state marketplaces. Consumers have until Feb. 15 to enroll.

The tradeoff for lower out-of-pocket spending maximums may be a higher deductible, says Pearson. The average deductible for silver plans will increase 7% in 2015, to $2,658. Other metal-level average plan deductibles are increasing as well.

Higher deductibles are likely helping keep premiums low, and low premiums are what consumers are looking for, Pearson says.

For people who are generally healthy, a lower premium may be more attractive than a lower deductible. They’re never going to meet their deductible anyway, so they’d prefer to save on monthly premiums.

But for people with chronic conditions, “the lower out-of-pocket maximum helps you because you’re going to exceed your deductible no matter what,” says Pearson.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

MONEY Health Care

Why a Popular Way to Control Health Care Costs Is Under Fire

businessman with blood pressure cuff on his arm
Eric Hood—iStock

Employers are increasingly turning to wellness programs to keep workers healthy. But a new lawsuit is challenging whether your boss can force you to get medical tests—or pay more for your health insurance.

Do it or else. Increasingly, that’s the approach taken by employers who are offering financial incentives for workers to take part in wellness programs that incorporate screenings that measure blood pressure, cholesterol, and body mass index, among other things.

The controversial programs are under fire from the Equal Employment Opportunity Commission, which filed suit against Honeywell International in October charging, among other things, that the company’s wellness program isn’t voluntary. It’s the third lawsuit filed by the EEOC in 2014 that takes aim at wellness programs, and it highlights a lack of clarity in the standards these programs must meet in order to comply with both the 2010 health law and the landmark Americans with Disabilities Act.

Honeywell, based in Morristown, N.J., recently got a reprieve when a federal district court judge declined to issue a temporary restraining order preventing the company from proceeding with its wellness program incentives next year. But the issue is far from resolved, and the EEOC is continuing its investigations. Meanwhile, business leaders are criticizing the EEOC action, including a recent letter from the Business Roundtable to administration officials expressing “strong disappointment” in the agency’s actions.

In the Honeywell wellness program, employees and their spouses are asked to get blood drawn to test their cholesterol, glucose, and nicotine use, as well as have their body mass index and blood pressure measured. If an employee refuses, he’s subject to a $500 surcharge on health insurance and could lose up to $1,500 in Honeywell contributions to his health savings account. He and his spouse are also each subject to a $1,000 tobacco surcharge. That means the worker and his spouse could face a combined $4,000 in potential financial penalties.

“Under the [Americans with Disabilities Act], medical testing of this nature has to be voluntary,” the EEOC said in a press release announcing its request for an injunction. “The employer cannot require it or penalize employees who decide not to go through with it.”

Honeywell sees the situation differently. “Wellness is a win-win,” says Kevin Covert, vice president and deputy general counsel for human resources at Honeywell. In time, the company expects to see lower claims costs while workers avoid health problems. Sixty-one percent of employees who participated in the company’s screening last year reduced at least one health risk, he says.

Further, Covert says, it’s easy for employees and their spouses to avoid the tobacco surcharge. Smokers can take a 15-minute online tobacco cessation course, while non-smokers can simply call up the health plan and certify that they don’t smoke.

“The way they described the program was quite hyperbolic,” Covert says.

Employers are watching the Honeywell case closely because many have similar incentive-based wellness plans, says Seth Perretta, a partner at Groom Law Group, a Washington, D.C., firm specializing in employee benefits.

Eighty-eight percent of employers with 500 workers or more offer some sort of wellness program, according to a 2014 national survey of employer-sponsored health plans by the benefits consultant Mercer. Of those, 42% offer employee incentives to undergo biometric screening, and 23% tie incentives to actual results, such as reaching or making progress toward blood pressure or BMI targets.

Despite employers’ enthusiasm for wellness programs, “there’s no good research that shows these programs actually improve health outcomes or lower employer costs,” says JoAnn Volk, a senior research fellow at Georgetown University’s Center on Health Insurance Reforms.

The health law encourages employers to offer workers financial incentives to participate in wellness programs. It allows plans to incorporate wellness incentives — both penalties and rewards — that can total up to 30% of the cost of employee-only coverage, an increase over the previous limit of 20%. If the wellness activity aims to help someone reduce or quit smoking, the incentive can be even higher, up to 50% of the plan’s cost.

Under the ADA, employers aren’t allowed to discriminate against workers based on health status. They can, however, ask workers for details about their health and conduct medical exams as part of a voluntary wellness program. What constitutes a voluntary wellness program under the law? Employers, patient advocates and policy experts want the EEOC to spell out what “voluntary” means under the ADA and clarify the relationship between the health law and the ADA with respect to wellness program financial incentives.

“The EEOC has chosen litigation over regulation,” says J.D. Piro, a senior vice president at Aon Hewitt, who leads the benefits consultant’s health law group.

The EEOC is always reviewing its guidance, but there’s no timeframe for issuing further guidance, says spokesperson Kimberly Smith-Brown.

Consumer advocates say it’s critical not to confuse incentive programs with comprehensive workplace wellness.

“The incentives are meant to engage employees,” says Laurie Whitsel, director of policy research at the American Heart Association, “but they’re not the comprehensive programming we’d like to see employers offer.” It’s really important to have a culture of health, Whitsel says, including an environment that supports a healthy workplace, from a smoke-free work environment to healthy food in the cafeteria.

Patient advocates voice another concern: That wellness program financial penalties may be so onerous they actually limit people’s access to the medications and primary and preventive care they need to get and stay healthy.

“When penalties become that high, it really is a deterrent to affordable, quality health care,” says Whitsel.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

MONEY Health Care

Why You May Need to Act Fast to Keep Your Health Coverage

140603_FF_QA_Obamacare_illo_1
Robert A. Di Ieso, Jr.

Obamacare open enrollment begins this Saturday and runs through February. But waiting too long to sign up for insurance could put you at risk of owing a penalty—and leave you stuck with big medical bills.

Mind the gap. When the 2015 open enrollment period begins on Nov. 15 for plans sold on the individual market, consumers should act promptly to avoid a gap in coverage.

Failing to do so could not only leave you exposed to unexpected medical bills—hello, appendicitis!—but you could also be hit with the penalty for not having health insurance that kicks in if you’re without coverage for three months or more during the year. The coverage requirement applies to most people in group and individual plans unless they qualify for a hardship or other type of exemption.

In 2015, the penalty will be the greater of $325 or 2% of household income.

The open enrollment period runs through Feb. 15, 2015. But if you bought a plan last year and need to renew your coverage, you must do so by Dec. 15 if you want it to start Jan. 1.

In general, you must buy a plan by the 15th of the month in order to have coverage that starts the first of the next month. So if you buy a plan on Dec. 16, for example, your coverage won’t start until Feb. 1.

If you don’t have insurance and you buy a plan by Feb. 15, your coverage will begin by March 1 and you’ll avoid owing the penalty since your coverage gap will be less than three months.

Last year, the marketplaces got off to a bumpy start and many people weren’t able to sign up for coverage before open enrollment ended on March 15. The federal government allowed anyone who got their application started before the deadline to avoid the penalty.

This year, President Barack Obama has vowed that the marketplace will function on time. “We’re really making sure the website works super well before the next open enrollment period. We’re double- and triple-checking it,” he told reporters last week.

There is also another way that people can be affected by the coverage gap. For people who are receiving premium tax credits but lose or drop their coverage, health plans are required to allow them a 90-day grace period to catch up with their premiums if they fall behind, as long as they’ve already paid at least one month’s premium that year. But they don’t have 90 days before the coverage gap countdown starts. If after three months someone still hasn’t paid what he owes, his coverage would be terminated retroactive to the beginning of the second month of the grace period. In that case, the penalty clock for not having coverage would start ticking after the first month of nonpayment, says Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities.

People who aren’t receiving premium tax credits on the exchange would be subject to state laws regarding grace periods for nonpayment. Typically they’d have 30 days to pay up, Solomon says.

If you lose your job-based health insurance, you’ll have 60 days after your coverage ends to sign up for new coverage. This “special enrollment opportunity,” as it’s called, would count toward a gap in coverage.

Although people are limited to a single coverage gap of less than three months annually, some may be able to sidestep the issue.

“If you have coverage on any day during a month you’re considered covered for the month,” says Solomon.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

MONEY Health Care

Why You Should Forget About Ebola and Get a Free Flu Shot Instead

Flu Shot Sign
Getty Images

Americans are nearly as worried about Ebola as they are about catching the flu. But influenza is the risk you should pay attention to. And you probably don't need to spend a penny to protect yourself.

Take a break from worrying about Ebola and get a flu shot this fall. While the Ebola virus has so far affected just four people in the United States, tens of millions are expected to get influenza this season. More than 200,000 of them will be hospitalized and up to 49,000 will likely die from it, according to figures from the Centers for Disease Control and Prevention.

A new HuffPost/YouGov poll of 1,000 adults found that the flu is perceived as only slightly more threatening than the Ebola virus, however. Forty-five percent of people polled said that the flu posed a bigger threat to Americans than Ebola, but a substantial 40% said it was the other way around. Fifteen percent said they weren’t sure.

“Ebola is new, mysterious, exotic, highly fatal, and strange, and people don’t have a sense of control over it,” says William Schaffner, a professor of preventive medicine and infectious disease at Vanderbilt University.

Influenza, on the other hand, is a familiar illness that people often think they can easily control, Schaffner says. “They think, ‘I could get vaccinated, I could wash my hands’ and prevent it.”

Yet that familiarity may lead to complacency. Flu shots are recommended for just about everyone over six months of age, but less than half of people get vaccinated each year.

Now there’s even more reason to get a shot. The health law requires most health plans to cover a range of preventive benefits at no cost to consumers, including recommended vaccines. The flu shot is one of them. (The only exception is for plans that have been grandfathered under the law.)

The provision making the vaccine available with no out-of-pocket expense is limited to services delivered by a health care provider that is part of the insurer’s network.

Depending on the plan, that could include doctors’ offices, pharmacies, or other outlets.

Medicare also covers flu shots without patient cost sharing.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

MONEY Health Care

Why You Could Get Stuck Paying for More of Your Health Care

Red traffic light
iStock Your insurer may put a stop to how much it will spend on your surgery.

A growing number of companies are capping what your insurance will pay for certain medical procedures. Get more expensive care, and you could be on the hook for the extra.

Aiming to contain health care costs, a growing number of employers and insurers are adopting a strategy that limits how much they’ll pay for certain medical services such as knee replacements, lab tests and complex imaging. A recent study found that savings from such moves may be modest, however, and some experts question whether “reference pricing,” as it’s called, is good for consumers.

The California Public Employees’ Retirement System (CalPERS), which administers the health insurance benefits for 1.4 million state workers, retirees, and their families, has one of the more established reference pricing systems. More than three years ago, the agency began using reference pricing for elective knee and hip replacements, two common procedures for which hospital prices varied widely without discernible differences in quality, says Ann Boynton, CalPERS’ deputy executive officer for Benefit Programs Policy and Planning.

Working with Anthem Blue Cross, the agency set $30,000 as the reference price for those two surgeries in its preferred provider organization plan. Members who get surgery at one of the 52 hospitals that charge $30,000 or less pay only their plan’s regular cost-sharing. If a member chooses to use an in-network hospital that charges more than the reference price, however, they’re on the hook for the entire amount over $30,000, and the extra spending doesn’t count toward their annual maximum out-of-pocket limit, Boynton says.

“We’re not worried about people not getting the care they need,” says Boynton. “They have access to good hospitals, they’re just getting it at a reasonable price.”

In two years, CalPERS saved nearly $6 million on those two procedures, and members saved $600,000 in lower cost sharing, according to research published last year by James C. Robinson, a professor of health economics at the University of California, Berkeley, and director of the Berkeley Center for Health Technology. Most of the savings came from price reductions at expensive hospitals.

The agency recently set caps on how much it would spend for cataract surgery, colonoscopies, and arthroscopic surgery, Boynton says.

Experts say that reference pricing is most appropriate for common, non-emergency procedures or tests that vary widely in price but are generally comparable in quality. Research has generally shown that higher prices for medical services don’t equate with higher quality. Setting a reference price steers consumers to high-quality doctors, hospitals, labs and imaging centers that perform well for the price, proponents say.

Others point out that reference pricing doesn’t necessarily save employers a lot of money, however. A study released earlier this month by the National Institute for Health Care Reform examined the 2011 claims data for 528,000 autoworkers and their dependents, both active and retired. It analyzed roughly 350 high-volume and/or high-priced inpatient and ambulatory medical services that reference pricing might reasonably be applied to.

The overall potential savings was 5%, the study found.

“It was surprising that even with all that pricing variation, reference pricing doesn’t have a more dramatic impact on spending,” says Chapin White, a senior policy researcher at RAND and lead author of the study.

Even though the results may be modest, a growing number of very large companies are incorporating reference pricing, according to benefits consultant Mercer’s annual employer health insurance survey. The percentage of employers with 10,000 or more employees that used reference pricing grew from 10% in 2012 to 15% in 2013, the survey found. Thirty percent said they were considering adding reference pricing, the survey found. Among employers with 500 or fewer workers, adoption was flat at 10% in 2013, compared with 11% in 2012.

The approach is consistent with employers’ general interest in encouraging employees to make cost-effective choices on the job, whether for health care or business supplies, says Sander Domaszewicz, a principal in Mercer’s health and benefits practice.

This spring, the Obama administration said that large group and self-insured health plans could use reference pricing.

The health law sets limits on how much consumers have to pay out of pocket annually for in-network care before insurance picks up the whole tab—in 2015, it’s $6,600 for an individual and $13,200 for a family plan. But if consumers choose providers whose prices are higher than a plan’s reference price, those amounts don’t count toward the out-of-pocket maximum, the administration guidance said.

Leaving consumers on the hook for amounts over the reference price needlessly drags them into the battle between providers and health plans over prices, says White.

“You expect the health plan to do a few things: negotiate reasonable prices with providers, and not to enter into network contracts with providers who provide bad quality care,” White says. “Reference pricing is kind of an admission that health plans have failed on one or both of those fronts.”

Some experts, however, say the strategy can work for consumers.

“What I think is that reference pricing is a choice-preserving strategy, when you look at the alternative, which is a narrow network,” says Robinson.

That may be a question of semantics, if relatively few providers meet the reference price.

Recent guidance from the administration spells out some of the requirements that health plans must meet in order to ensure that there are adequate numbers of high-quality providers if reference-based pricing is used. Among other things, it suggests that plans consider geographic distance from providers or patient wait times.

Like so much about reference pricing, it remains a work in progress. The administration says it will continue to monitor the practice, and may provide additional guidance in the future.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser