Washington: Child-care workers can get $0-premium #ACA plans in 2022!

A couple of years ago, Washington became the first state to implement their own "Public Option" ACA healthcare plan...sort of. The actual version of the PO which was implemented ended up being considerably less impressive than the original vision, but hey, it was a start.

However, the same legislation which created the "Cascade Care" program also included another provision which was noteworthy at the time:

(1) The Washington health benefit exchange, in consultation with the health care authority and the insurance commissioner, must develop a plan to implement and fund premium subsidies for individuals whose modified adjusted gross incomes are less than five hundred percent of the federal poverty level and who are purchasing individual market coverage on the exchange. The goal of the plan is to enable participating individuals to spend no more than ten percent of their modified adjusted gross incomes on premiums. The plan must also include an assessment of providing cost-sharing reductions to plan participants.

This would have been a pretty Big Deal, since under the original ACA subsidy formula, no one earning more than 400% FPL was entitled to any federal financial premium subsidies and had to pay full price. Limiting premiums to no more than 10% of income for those earning between 400 - 500% FPL would have been huge.

All of this became moot, however, the moment that the American Rescue Plan passed and was implemented earlier this year. Suddenly, no one had to pay more than 8.5% of their household income in premiums for the benchmark ACA Silver plan, completely overshadowing the Washington State proposal (as well as a similar state-based supplemental subsidy program implemented in California).

Of course, the American Rescue Plan is only temporary, covering calendar years 2021 & 2022. The big reconciliation infrastructure bill working its way through Congress right now aims to make the expanded ACA subsidys permanent, but until that actually happens nothing is certain.

Given that this is sort of stuck in limbo at the moment, it looks like Washington legislators have decided to hedge their bets by at least putting through a more limited version of their own enhanced subsidies...in an interesting way.

via the amazing Louise Norris at healthinsurance.org:

New program provides free coverage to child-care workers with income up to 300% FPL

The budget legislation enacted in Washington in 2021 provides funding for a new program to help child-care workers obtain health coverage. Enrollment in the program starts November 1, 2021 (the same day open enrollment starts for 2022 coverage), and funding has been allocated to provide benefits throughout 2022.

Employees of licensed child-care facilities will be eligible for the program as long as their household income isn’t more than 300% of the poverty level ($38,640 for a single individual, and $70,500 for a family of four), and as long as they’re not eligible for Medicare or Medicaid.

Eligible enrollees will be able to obtain premium-free coverage as long as they enroll in a Cascade Care (standardized) Silver plan and accept all federal subsidies that are available to them.

The state has allocated $30 million to cover the premium costs that these enrollees would otherwise have had to pay themselves, after the federal premium subsidies are applied.

Huh. Interesting.

Under the American Rescue Plan subsidy formula, anyone who earns up to 150% FPL is eligible for a $0-premium Silver ACA healthcare policy with nominal cost sharing (i.e., deductibles, co-pays, etc.). Anyone who earns 150 - 200% FPL has to pay no more than 2% of their income for such a plan, and those earning 200 - 300% FPL have to pay between 2 - 6% of their income on a sliding scale.

Under this new program in Washington State, however, child-care employees who earn as much as 300% FPL will be entitled to pay nothing in premiums for their ACA exchange plan. That's huge, though obviously it only applies to a small portion of the state's population.

To get an idea of how much this could save: 300% FPL is around $79,500/year for a family of four, and 6% of that is $4,770. That means an employee of a licensed child-care facility in Washington State who has a family of four could save up to around $4,800 next year in healthcare premiums.

I should note that this is on top of the enhanced ARP subsidies, which already knocked the ceiling on net premiums at 300% FPL down from 9.83% of income down 6%, which is already saving someone in the above scenario up to $3,000 over the standard ACA subsidy formula.

The other caveats are also worth noting: Normally, ACA premium subsidies can be applied towards any exchange plan regardless of carrier or metal level; in order to get this particular bonus subsidy, the enrollee would have to choose not only a Silver plan, but a Cascade Care silver plan. That appears to include both "Cascade Standard" and "Cascade Select" plans, at least (the latter are the only WA plans which are "true" Public Option plans).

It sounds like a great program, and the way its targeted towards a specific type of employment is very interesting, but it also sounds like the rollout of it isn't being handled very well, at least according to one WA-based health insurance broker:

Yup, it’s a fun one. They put it together during the worst possible time and restricted outreach.

— Matt McColm (@InsureVisionary) September 2, 2021

It’s this strange hodgepodge of legislation and implementation. A couple of weeks ago it showed up in a broker blast. So I took a look and the details were in the budget legislation. They insisted that one lead organization be put in charge and then dropped it on top of enrollment.

— Matt McColm (@InsureVisionary) September 2, 2021

So you have a new launch with minimal outreach and not even empowering your enrollment centers. While it is nice that the lead org received a lot of funds. Customer service and support leads to more enrollments and returning customers.

— Matt McColm (@InsureVisionary) September 2, 2021