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Subsidies create great deals for many – but not all
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Subsidies create great deals for many – but not all

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HELENA — If you’re single, earn about $15,000 a year and have no health insurance, subsidized policies under the Affordable Care Act will be available this fall for as little as $23 a month — and with good benefits.

But if you’re single and earn $30,000 a year or more and want to buy a similar policy, you may not get a subsidy, and you’ll pay the full price for coverage available on the ACA Internet marketplace in Montana.

Such is the wide-ranging nature of the subsidies and cost of health insurance on the new marketplace, a linchpin of the ACA, the federal health reform law often referred to as Obamacare.

The ACA requires all Americans to have health insurance by 2014 or pay a tax penalty.

The Internet marketplaces, which open for business Tueday in Montana and every state across the nation, are the law’s main tool for making private health insurance affordable and available to a big chunk of the nation’s 50 million uninsured.

It’s the only place where they — or anyone else, for that matter — can shop for health coverage and get a federal subsidy to help pay for the policy.

It’s estimated that 150,000 to 200,000 Montanans may be eligible for subsidies as they shop for insurance on the marketplace.

A Lee Newspapers State Bureau analysis of the potential subsidies and costs for policies on the Montana marketplace showed that both vary widely, depending on the size, age and income of families buying the coverage.

The analysis found:

n Households with lower incomes, such as those from 100 percent to 200 percent of the federal poverty level, get the best deals and the larger subsidies. The law is designed to extend good coverage to poorer families by requiring them to spend only a small portion of their income on health insurance.

n Middle- and higher-income households will get lesser subsidies and pay more for coverage on the marketplace. Some may get no subsidy at all.

n Families with children are probably more likely to get a higher subsidy, because the poverty level threshold for their households is higher.

n Older households can expect to pay higher premiums — but if you’re older and have very low income, a lot of that premium will be offset by the subsidy.

One income group, however, is largely left out in the cold: Those earning less than 100 percent of the federal poverty level, or $11,490 for a single person and $23,550 for a family of four.

People in this group are not eligible for any subsidies, because they were supposed to be covered by an expanded Medicaid, the state-federal program that pays medical bills for the poor.

The U.S. Supreme Court ruled in 2012 that the Medicaid expansion is optional for states and Montana’s 2013 Legislature voted against expanding Medicaid in Montana.

Three companies are selling policies on the Montana marketplace, starting Tuesday: The Montana Health Co-op, Blue Cross and Blue Shield of Montana, and PacificSource.

The Lee Newspapers State Bureau analysis assigned specific policies from each company to various hypothetical families, to determine what those families would pay, with the subsidies, for their coverage.

Those with incomes near the poverty level can buy good policies for very little money, with the help of the subsidies. For example, a 45-year-old person earning $12,000 can get a policy with a $500 deductible and no co-pays for only $20 a month, after the subsidy.

The deductible is what you pay out from your own pocket for medical services before insurance coverage kicks in. Anything above that amount, the co-insurance is the percentage of costs that you pay.

A single, 35-year-old parent with two children earning $30,000 a year could buy coverage for the entire family for $100 a month, after subsidies, and have only a $500 deductible and 20 percent co-pay.

The farther up the income ladder you go, however, the more you pay for a policy.

A married couple at age 55 earning $50,000, with no kids, would pay $627 a month for a policy with a $2,000 deductible and 20 percent co-pay. Without the subsidy, that same policy would be $1,157 a month.

The same couple earning $30,000 a year would pay only $186 a month for a similar policy, because of more generous subsidies for lower income brackets.

However, a 40-year-old single person buying a PacificSource policy that has a $3,000 deductible and 50 percent co-pay would get no subsidy, and have to pay the full $236 premium each month. That’s because the premium is less than the maximum amount of income that the law says she must pay for coverage.

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