Health insurance exchange concerns, optimism voiced reports:

“The health insurance exchange expected to begin operating Jan. 1 and eventually serve up to 1 million Illinoisans — many of them previously uninsured — could create tax-related headaches for them if they aren’t prepared, speakers at a panel discussion in Springfield said Wednesday.

Some people who apply in good faith for federal subsidies that will be offered through the exchange as part of the federal Affordable Care Act could be forced to repay all or part of the subsidies, according to Laura Minzer, executive director of the Illinois Chamber of Commerce’s health-care council.

That situation could occur if federal officials later determine that an applicant’s employer offered acceptable coverage that disqualified the applicant from subsidies, or if the applicant’s income rose during the year and the applicant failed to report the change and have the subsidy adjusted, Minzer said.

“That’s a big concern,” she said. “It is going to create a lot of frustration.”

Requiring repayment could be “enormously disruptive” for lower-income Illinoisans, said Mike Koetting, deputy director of the Illinois Department of Healthcare and Family Services.

But Minzer said it’s possible that federal officials may forgive such oversights in the first few years of operation for exchanges in Illinois and other states.

She added that many Illinois businesses employing more than 50 full-time workers are trying to figure out what sort of penalties they might face if their current coverage is deemed inadequate by the ACA.

Those businesses are deciding whether it would be better for them to drop coverage and allow their employees to seek insurance through the exchange, though most employers will continue to offer coverage, Minzer said.

“It’s causing a lot of anxiety and angst,” she said.

Will it be affordable?

Minzer said it’s unclear — and will remain unclear until enrollment begins Oct. 1 — whether health-insurance coverage sold through the exchange will be affordable for consumers. An estimated 70 percent of applicants are expected to qualify for a sliding scale of federal subsidies to help them afford premiums and other out-of-pocket costs.

State officials are determined to work out any difficulties with the startup of the exchange, which officially will be called the Illinois Health Insurance Marketplace, so the number of uninsured Illinoisans — more than 1.5 million — can be reduced, Koetting said.

Minzer and Koetting were part of a panel convened at the Hilton Springfield by Bloomberg Government and The Tax Institute at H&R Block.

Panelist Cristal Thomas, a deputy Illinois governor, said, “We know this is not going to completely work as planned. We do believe we will have a pretty robust exchange in Illinois.”

The online marketplace and the nationwide mandate that most Americans have health coverage in 2014 or begin to receive tax penalties will give the administration of Gov. Pat Quinn an “incredible opportunity” to convince Illinoisans that health coverage is “something that’s worth paying for,” Thomas said. “Health coverage is a value.”

Another panelist, Kathy Chan, director of policy and advocacy for the Illinois Maternal and Child Health Coalition, said any startup problems for the marketplace will be worth enduring as part of the Quinn administration’s efforts to create a “culture of coverage” in Illinois.

Moreover, the potential expansion of Medicaid eligibility that is part of the ACA and mostly federally funded, “will be a pathway to coverage for a lot of people,” she said.

State-federal partnership

The General Assembly has yet to approve the expansion for 2014 and beyond.

An additional 510,000 more Illinoisans would be added to the Medicaid program by 2017 as part of the expansion. Two-thirds of the newcomers would be added through a new eligibility category — mostly childless adults with annual incomes less than 138 percent of the federal poverty level, or up to $15,282 for one person and $31,322 for a family of four.

The remaining one-third of the newcomers would have qualified for Medicaid under current criteria but are expected to apply because of a public-awareness campaign to be launched this summer.

Illinois has received $154.8 million from the federal government to help with the setup of an exchange. The marketplace will be operated as a state-federal partnership in 2014 while the Quinn administration pushes for legislation to create a state-operated exchange.

The federal money also will be used to publicize the ACA and give grants to community groups that would act as “assisters” to help people sign up for coverage. The federal aid to Illinois includes a $115.8 million grant announced this week.”