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Many New Yorkers qualify for aid in marketplace health care


Sunday, January 10, 2016, 7:36 PM

New Yorkers can use the tax credit toward a metal tier plan to lower their out-of-pocket cost.

New Yorkers can use the tax credit toward a metal tier plan to lower their out-of-pocket cost.

If you’re one of the 2 million New Yorkers and counting receiving their health-care coverage through the New York State of Health marketplace, chances are your insurance is being subsidized in some form or another.

Last year, the Department of Health reported that nearly three-quarters of people enrolled in the Marketplace’s private health plans qualified for financial assistance at an estimated savings of $ 811 million in annualized tax credits.

Last year, New Yorkers received an average tax credit of $ 220, and that number is projected to increase in 2016, according to the Department of Health.

These premium subsidies function “just like a gift card,” says Karen Pollitz, senior fellow at the Kaiser Family Foundation.

While this doesn’t mean you can take your tax credit to Target, it does mean that you can put it toward a metal tier plan of your choosing to reduce your out-of-pocket costs — and potentially gain access to additional benefits like vision or dental coverage afforded through higher-level health plans.


“The premium subsidy is pegged to the cost of the silver plan, although you can use your premium subsidy for any plan you want,” Pollitz says.

“There’s a formula: You take the cost of a silver plan; you subtract from that the amount that you’re required to contribute for that plan based on your income on a sliding scale; and the difference is the amount of your tax credit. You can use that on any plan,” says Pollitz, adding that you could then take that tax credit and buy a bronze plan, which in some cases might drive the premium of a bronze plan down to zero.

“Or you could spend it on a benchmark silver plan, in which case you would pay exactly the amount that you are required to pay under the premium sliding scale schedule.”

The tax credit can also go toward signing up for a more expensive plan.

The tax credit can also go toward signing up for a more expensive plan.

Another option: Apply it to a more expensive gold or platinum plan, and then you’d pay the difference between the premium and the tax credit, according to Pollitz.

Under the guidelines of the Affordable Care Act, every marketplace health plan must offer the same basic services, no matter the metal tier. The biggest difference between a bronze, silver, gold or platinum plan, says Pollitz, is “how much more you’re going to pay at the pump.”

On average, providers of a platinum plan pay 90% of your insurance costs, gold pays 80%, silver 70% and bronze 60%. That leaves the insured to pay the remaining percentage of the costs.

“Generally, bronze plans will have lower premiums, but if you do end up in the emergency room or get sick, you’re going to pay a lot more of the bill yourself before the insurance starts to pay,” Pollitz explains.

This is because the lower monthly premiums of the bronze plan are paired with the highest out-of-pocket costs of any of the metal levels offered through the marketplace.

Conversely, the platinum plan has the highest premiums but lowest out-of-pocket costs, which include deductibles, copays and coinsurance.

“The tiers really just designate different levels of cost sharing,” Pollitz says.

When it comes to picking a metal level, the majority of New Yorkers settle on a silver plan, which has a moderate premium and moderate out-of-pocket costs. The mid-range expenses associated with a silver plan make it perennially appealing; however, its popularity most likely has to do with the fact that it’s where the most financial aid options are found.

“A reason why a lot of people will look at the silver plans,” says Pollitz, “is because those are the plans where you can find the cost-sharing subsidies.”

In addition to the premium tax credit, people whose income is up to 250% of the federal poverty line are eligible for cost-sharing reductions, which reduce out-of-pocket costs and lower the out-of-pocket maximum.

“To get those,” Pollitz says, “you need to go to New York State of Health and fill out your income information. If you qualify, you can get a silver plan — it’ll still be called silver; it’ll cost what a silver plan costs, but it will be modified to be more comprehensive. Depending on your income, it might be as comprehensive as a gold policy or even a platinum policy.”

The Essential Plan, a new health coverage option being introduced in New York State for 2016, will replace two of the three cost-sharing reduction plans previously offered through the Marketplace.

New Yorkers whose annual household income is 138% to 200% of the federal poverty level are eligible to apply for the Essential Plan, which offers the same basic coverage as any other plan in the marketplace.

Essential Plan enrollees, however, will not have to pay a deductible and their monthly premium will either be $ 0 or $ 20 depending on their income. Plan participants will also receive free preventative care services.

Enrollment in an Essential Plan is ongoing, but the deadline for open enrollment in all other plans is Jan. 31 for coverage in 2016.

For more information about insurance options or for help enrolling in a Marketplace health plan, visit nystateofhealth.ny.gov.

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