What the doctor ordered: Changes make health coverage more affordable for many in the middle class

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photo Staff Photo by Matt Hamilton / Andrew Hetzler, chief operating officer of American Exchange.

Andrew Hetzler is co-founder and chief operating officer of American Exchange, a Chattanooga-based company that helps individuals find health care coverage, from picking plans on the exchange created through the Affordable Care Act to filling in gaps related to Medicare coverage. The American Rescue Plan Act of 2021 made more coverage options more accessible to more people, and American Exchange, founded in 2013 by Hetzler and business partner Bobby Huffaker, has stayed on top of the changes in advising clients seeking health coverage in a complex marketplace.

"There's a whole new demographic of people eligible for tax credits that may not know about it, so that's one of the big changes for sure," Hetzler says. "The lowest cost Silver plan for a married 62- and 63-year-old couple making $120,000 is $847 per month. Before the American Rescue Plan, this same plan would have been $2,028 per month."

Who was a 'typical' client pre-pandemic?

Pre-pandemic, a lot of our clients fell into a few different categories, mostly people who were self-employed, sole proprietors, 1099 contractors, people not eligible for health coverage. We help a lot of college kids who are not eligible for their parents' plan, students from other countries. Then there are two other categories. First, people between jobs, and that's something that's a lot larger after the pandemic, that's a group is still pretty strong that's in between jobs or laid off and on COBRA coverage. And then there are people who retired before 65 - they're not working, but not eligible yet for Medicare who are 62, 63, 64 years old and either planned for it or were shocked by the costs of health care before Medicare eligibility.

How has the pandemic affected the work you're doing, and who you're helping?

The major group of people we've been helping is people who've been laid off, who are hopefully in between jobs, but in the early part of last year it was dealing with layoffs and helping people figure out if they should take COBRA coverage or go on the exchange.

How has health care access evolved during the pandemic?

What you're seeing here in Chattanooga is similar to national trends. In 2020, we had a lot of doctors' offices, primary care doctors, specialists, who were not seeing patients. It's not that as many people weren't getting cancer every month and having heart attacks every month, but those people either rode out those symptoms or those symptoms got worse. So there's a high need for health care services - there's a lot of demand.

The pandemic also certainly put a spotlight on our public health infrastructure. Health departments are having to do all the COVID testing, and that was a big wake-up call for a lot of county-level folks. The pandemic came around and everyone said, gosh, we really need these guys. A lot of people have realized the need and the value of the public health systems. They're not just restaurant inspections and free vaccinations.

How have plans on the exchange become more accessible?

The American Rescue plan certainly expanded eligibility for advance premium tax credits for the group of people already eligible. Those already receiving a tax credit are eligible for a little bit more, but the big thing was there is no longer an upper limit for income eligibility for tax credits. Before the American Rescue Plan, it was capped at 400% of the [federal poverty level].

Let's say you had a 63-year-old person not yet eligible for Medicare. If they make more than $51,000 they would not have been eligible for a tax credit, and the premium might have been $1,1000 or $1,200 a month. Now that person's plan could be as low as $300 or $400 a month after the American Rescue Plan.

Another example. The lowest cost Silver plan for a married 62- and 63-year-old couple making $120,000 is $847 per month. Before the American Rescue Plan, this same plan would have been $2,028 per month.

There's a whole new demographic of people eligible for tax credits that may not know about it, so that's one of the big changes for sure.

So are people ditching employer-provided coverage for plans on the exchange?

A lot of times if you're offered coverage at work, you're not eligible for a tax credit. If it's considered affordable for employee-only coverage, you aren't allowed to go the marketplace and get a tax credit. That didn't change because of the American Rescue Plan. There may be some huge employers that offer an unaffordable plan to a part-time group who might be eligible, and if you're eligible at all, you're better off, but that's a pretty rare scenario. Employers' rates and individual rates are pretty similar.

What are some common misconceptions about health plans on the exchange?

There's a misconception about what the plans cover. They cover essentially all of the same things as an employer-sponsored plan. I think there's a misconception that Obamacare doesn't cover anything, but it's the same 10 essential health benefits that traditional plans cover. If you offer a plan on the marketplace, it has to qualify and cover the 10 essential health benefits.

There are some exceptions. For example, you may have a large employer in town who may choose to cover gastric bypass or a weight loss program, but that's something they're ultimately paying for themselves. For the most part, on the individual market the coverage is just as good.

And where you might get into trouble is buying a plan away from the exchange like a short-term health plan that won't cover pre-existing conditions or prescription drugs.