Reform Update: H&R Block, online insurance broker team up to sell health plans

GoHealth, an online health insurance broker, said Wednesday it will develop a service for tax preparer H&R Block to enable consumers to purchase health insurance while getting their income taxes done.

Most Americans will be required to obtain coverage as of Jan. 1, 2014, or else they'll have to pay a tax penalty. They will have to report on their federal income tax return whether they have obtained coverage. In addition, they will be eligible for a sliding-scale tax rebate payable directly to their insurer if they have a household income up to 400% of the federal poverty level and buy coverage through their state insurance exchange.

The GoHealth platform will be available through H&R Block both online and over the phone nationwide beginning Oct. 1, said Michael Mahoney, senior vice president of consumer marketing for Chicago-based GoHealth.

Even though H&R Block's busy season is typically January through April 15 of a given year, Mahoney said because of the way the premium tax credits are calculated, many consumers will seek the help of tax professionals earlier than usual. That's because the subsidies established by the Patient Protection and Affordable Care Act to help people buy health coverage through the state insurance exchanges are based on households' expected income for 2014, household size and other factors. If people underestimate their 2014 income and qualify for a premium subsidy based on the underestimate, they may have to pay the subsidy back to the IRS.

In a separate development, H&R Block on Wednesday said as part of a pilot program, it would have health insurance agents in its tax offices in Arizona to assist with choosing and enrolling in a plan.

Tax preparers generally have become proactive and savvy in letting clients know how the ACA will affect them. For example, on H&R Block's website, there's a link to a healthcare reform “test drive” where individuals, depending on their age, marital status, income and family size can find out how the ACA will affect their taxes.

But some experts have expressed concerns about how online insurance brokers will display health plans on their websites. Lynn Quincy, a senior healthcare policy analyst for Consumers Union, said it makes sense for people to sign up for a health plan while doing their income taxes. But she worries that some Web brokers might steer them to plans based on which insurers pay the highest commission, not necessarily what's best for the client's personal financial and healthcare situation.

In a list of recommendations (PDF) for Web-based brokers released last September, Quincy wrote that Web-based brokers should display plan options in a similar manner to that which individuals would see them displayed on their state's insurance exchange, and also provide tools such as a cost-sharing calculator.

HHS recently announced agreements with five online health insurance brokers, including GoHealth and eHealth, to help sign people up for the exchanges in the 35 states where the federal government is running the marketplaces.

Consumers searching for lower premiums will have lots of relatively affordable options when the state health insurance exchanges launch open enrollment next month, according to two new studies reported on by the Associated Press.

A study released Thursday by the Kaiser Family Foundation found that government tax credits would lower the sticker price on a benchmark silver-tier plan to a little over $190 a month for single people making about $29,000, regardless of their age.

If they buy a bronze-tier plan with higher cost-sharing, some younger consumers can bring their premiums down to the range of $100 to $140 a month if they're eligible for a federal premium subsidy. Older people can drive their monthly premium below $100 with a bronze plan.

A separate study released Wednesday by Avalere Health looking at premiums without considering the subsidies found that premiums for a 21-year-old buying a silver plan would be about $270 a month, while premiums for a 40-year-old buying a silver plan will average close to $330. For a 60-year-old, they were nearly double that at $615 a month.

Caroline Pearson, lead author of the Avalere study, said there will be big price differences among age groups, states and even within states. "We are seeing competitive offerings in every market if you buy toward the low end of what's available,” she told the AP. "We're consistently seeing that premiums will be lower than expected. For the many people that qualify for a tax credit, the cost will be even lower."

The Avalere study also found some striking price differences within certain states, generally larger ones. In New York, with 16 insurers participating, the difference between the cheapest and priciest silver premium was $418.

The National Union of Healthcare Workers yesterday filed a lawsuit (PDF) against Covered California, that state's insurance exchange, asking the marketplace to remove Kaiser Permanente from its list of approved health plans due to what the labor union calls “substandard care that violates the Exchange's rules.” The union, which represents 5,000 healthcare workers employed by Kaiser Permanente, said federal and state law dictates that the exchange can only contract with insurers “in good standing with their respective regulatory agencies,” including “the absence of any material statutory or regulatory violations, including penalties, during the prior year.” NUHW noted that in June, the California Department of Managed Health Care levied a $4 million fine on Kaiser for violations related to mental health services, including violating California's Mental Health Parity Act.

Kaiser Permanente issued the following statement in response to the suit: “The assertions that NUHW is making are patently untrue. Kaiser Permanente has been approved for, and will enthusiastically participate in, the Covered California health plan exchange. Kaiser Permanente is in good standing and fully licensed by the state to offer health insurance in California. There are no restrictions on our ability to offer health insurance, including in the Covered California exchange. The union continues to make unfounded allegations as part of their protracted labor negotiations with Kaiser Permanente. This irresponsible behavior does nothing to further the negotiations that should be taking place at the table.”

Kaiser said the state Department of Managed Health Care's 2012 survey did not identify problems with the quality of the mental healthcare provided to Kaiser members or with the ability of plan members to obtain urgent or emergency mental healthcare. It said the department did identify some areas where non-urgent appointment wait times and data tracking needed improvement. “We took the findings seriously and submitted a corrective action plan that the DMHC approved. Since the beginning of 2012 we have improved access to non-urgent appointments dramatically and have hired numerous new providers, and we continue to improve.”

As many as 40% of people who are uninsured and living in states that have decided not to participate in the Patient Protection and Affordable Care Act's Medicaid expansion will be unable to find affordable health plan options if those state ultimately don't expand their program according to a Commonwealth Fund study released today. Currently, 25 states have said they will not expand Medicaid in 2014, or haven't decided yet. The report, based on a survey of 1,317 adults between the ages 19 to 64, found that in those states, 72% of adults whose incomes fell below 133% of the federal poverty level ($14,856 for an individual and $30,657 for a family of four in 2012) during the two-year period from June 2010 to September 2012 had spent some time uninsured. Under the ACA, states that choose to expand Medicaid must do so for individuals with up to 138% of the federal poverty level. In states not participating in the expansion, those making between 100% and 138% of poverty will be eligible to buy subsidized coverage through the state insurance exchanges. But those earning less than 100% of poverty in those states would not be eligible for subsidies. The ACA authors assumed they would be covered by expanded Medicaid.

Follow Jonathan Block on Twitter: @MHjblock