MONTPELIER — You’re a married father of three, with a household income of $78,000 a year. Or a single mother with a teenager, pulling in around $40,000. Or a 22-year-old single fresh out of college, who just landed an entry-level position that pays in the upper 20s.
With all the upheaval in the world of health insurance, Vermonters of all stations face an uncertain future. But the answer to perhaps the most pressing question — cost? — has finally begun to arrive.
Policies sold on Vermont’s federally mandated “exchange,” called Vermont Health Connect, won’t kick in until next year. But the 100,00 or so residents who will be required to buy their insurance on the online marketplace can begin pricing policies now.
An online “subsidy calculator” unveiled Thursday by the Vermont Department of Health Access will provide Vermonters with a do-it-yourself mechanism for obtaining insurance quotes. The tool, online at www.VermontHealthConnect.gov, can’t yet deliver a guaranteed price — rates for policies sold in the exchange won’t be finalized until early next month.
But the calculator can determine the dollar value of the federal subsidy for which a person or family is eligible, deduct that amount from projected policy costs, and deliver what state officials say is a pretty close estimate for out-of-pocket monthly premiums.
“Vermonters are eager to learn more about the financial help that may be available to them when purchasing health insurance for 2014,” Mark Larson, commissioner of the Department of Vermont Health Access, said in a statement. “The online calculator provides Vermonters with the resources they need to estimate their 2014 health insurance costs today.”
That father of three? Eligible for a monthly subsidy of $754, and an estimated monthly premium of between $250 and $959, depending on the quality of the plan.
The single mom, meanwhile, is looking at a subsidy of $627, and monthly premiums between $63 and $549.
And no subsidies for the new grad, who would face premiums of anywhere between $357 and $609 per month.
Legislation passed in 2012 requires individuals and businesses with fewer than 50 employees — about a sixth of the state’s population — to purchase health insurance from the exchange. The subsidy calculator online now is useful only to those buying as individuals, since workers whose companies retain an employer-sponsored plan won’t be eligible to draw down federal subsidies.
But the exchange could change the economics of health insurance for many businesses that now underwrite a company plan, and even people now receiving insurance through an employer could find themselves buying as individuals before next year.
“For some employers, it’s going to make sense for them to drop coverage because it will be more advantageous for their individual employees to take advantage of financial assistance in the exchange,” says Emily Yahr, outreach and education manager at DVHA. “For others, it’s going to make sense to continue to contribute.”
Whether an employer continues to offer insurance, Yahr says, will hinge largely on the scope of the subsidies available to its employees. If an employee can secure for $11,000 a year a plan for which his or her employer would otherwise pay $14,000, then the business may decide to drop its plan, and give the unspent cash to workers to offset the costs they’d incur as a result.
In about two weeks, according to Yahr, the state will roll out an equivalent calculator for businesses, to help them crunch the numbers. But companies may have difficulty pinning down how their employees would fare in the exchange as individuals, since subsidies are based on household income.
That will force conversations between employers and their workers about income from spouses and partners, conversations Yahr hopes will be initiated with the availability of the calculator.
For the thousands of Vermont businesses facing exchange-related decisions, time is getting short.
The exchange will begin selling policies on Oct. 1. Yahr says the Department of Vermont Health Access will ramp up its outreach as the deadline nears. The website that hosts the calculator also includes a schedule of informational meetings that will be held around the state in the coming weeks and months.
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