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Uninsured Look For Health Coverage As Deadline Approaches

Charlie Schleicher is the only full-time employee at Spaah!, a downtown Bloomington business that offers manicures, massages, and facials.

The spa’s owner promoted Schleicher from part-time a little over a year ago, which meant more pay, more hours, but no health benefits.

“At one point we met with an insurance agent and it was just sort of overwhelming and not very clear and very expensive,” Schleicher says. “Most of the options were easily close to $300 a month, just for something basic.”

Enter the Affordable Care Act

After meeting with the insurance agent, Spaah! owner Donna Lafferty thought the federal health care exchange might be a less expensive solution.

“My husband and I shopped for it for ourselves,” Lafferty says. “We have the same plan and we told Charlie that ‘Hey this plan’s great, check this out.’”

Lafferty told Schleicher that if she signed up for an individual plan on the federal healthcare exchange, the spa would reimburse her for it.

“[Schleicher is] wonderful and we want to keep her and make her happy,” Lafferty says. “It’s important that she not risk everything. If she gets sick or something – God forbid something would happen – no health insurance at all – how does she pay for hospitalization and doctors?”

Why March 31 Is Important

The Lafferty’s are not required to provide health insurance to their employees since Schliecher is their only full time worker.

But if Schleicher doesn’t want to pay a fine, she needs to get health insurance soon.

The original deadline of March 31 still holds true for some people, although the Obama administration recently announced extensions for complicated cases or people who are having trouble with the sign up process.

The penalty for remaining uninsured is 1 percent of your yearly income or $95, whichever is higher. That will rise to 2 percent or $325 in 2015.

While $95 in one year doesn’t sound like much compared to paying $100 to $200 a month for a healthcare plan, those that go without insurance aren’t getting anything for their money, and uninsured individuals are still responsible for 100 percent of their medical costs.

Indiana University health policy professor Kosali  Simon says the fines might have more of an impact once people start seeing the money coming out of their paychecks.

The same is true, she says, for businesses that are required to provide health insurance for their employees.

“When the employer fines start being collected, you may see more people being insured compared to those currently being insured, coming in from other sources of insurance,” she says.

Simon says after the deadline passes, the emphasis will shift to documenting the experiences of people with the individual plans.

If the experiences are mostly positive, then more young people may sign up based on what they’re hearing from friends and neighbors, and insurers will lower premiums for 2015. Or the opposite could happen.

Young, Healthy Demographic Key To The System

Insurers say young, healthy people like 29-year-old Schleicher are key.

The thinking goes that young adults will help stabilize the risk pool and enable insurers to cover more expensive older and sicker adults.

Fewer young adults have signed up for the exchanges than anticipated. Data from the Department of Health and Human Services released in February shows only 23 percent of Hoosiers who have signed up for insurance are between 18 and 34 years old.

Still, a Kaiser Family Foundation study sounded a note of optimism. In simulation models where less than a quarter of the risk pool are young adults, the study predicted premium increases of only 1 percent or 2 percent–well outside of the risk for the premium “death spiral” predicted by critics.

The study’s authors say it’s because the emphasis on young adults is less important than the emphasis on healthy individuals overall. The authors also point to government subsidies that will take some of the sting out for insurers.

Meanwhile, almost 65,000 Hoosiers have signed up in Indiana out of the 145,000 who are eligible.

Race To The Finish

As the March 31 deadline approaches, Lafferty and Schleicher are trying to clear up the last few financial questions, such as taxes on Schleicher’s health benefits.

Simon says in the coming months and years, she expects to see more creative arrangements like the one Lafferty and Schleicher have made among small businesses.

“For small employers, hiring workers earlier, they would’ve had trouble providing health insurance,” Simon says. “Now the ACA means these workers have alternative sources. So they could pay them more.”

For the most part, Schleicher is happy about the situation.

“My mother has a heart attack every time she talks to me because she just can’t believe that I don’t have health insurance,” Schleicher says. “She says it’s unbelievable and wants me to move back home. She can’t believe it exists. She was very very happy and for her it was a big relief cause then she doesn’t have to worry as much.”

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