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12 23Thu10022014

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Back Local News Obamacare? Who cares? On Guam, it’s business as usual

Obamacare? Who cares? On Guam, it’s business as usual

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THE Obama administration has stretched the deadline for Americans to enroll in health plans through the federal insurance marketplace. Originally set for March 31, the deadline has been extended to mid-April.

But for Guam, none of this really matters because the key components of the Affordable Care Act, or Obamacare, do not apply to territories.

Guam residents are not bound by Obamacare's individual mandate, which requires Americans to obtain health insurance or pay a tax penalty.

The government of Guam opted against establishing a state insurance exchange due to the high cost it would entail vis-à-vis the minimal subsidy offered by the federal government.

The Department of Revenue and Taxation has estimated it would cost GovGuam $74 million a year for the Advance Premium Tax Credit that was required to implement an exchange.

David Torre, senior project manager for TakeCare Insurance Inc., noted that the tax credit subsidy requirement is well above the $24 million six-year allocation that Guam is slated to receive under Obamacare.

"In a nutshell, it's business as usual for us. There won't be many changes for individuals," Torre said.

Pre-existing condition

What currently applies to Guam is the guaranteed issue, a market reform component of Obamacare, which requires insurance companies to grant a health plan to any applicant regardless of their health status.

"This means that an individual cannot be turned away because of a pre-existing condition; that particular coverage mandate applies," said Torre, who spoke yesterday before members of the Guam Women’s Chamber of Commerce during their membership meeting at the Guam Marriot Resort & Spa.

The guaranteed issue took effect on Jan. 1.

"There are a number of these coverage mandates that are written down that the (Guam Tax and Insurance Commission) is aware of. I suggest that individuals go to their employer or reach out to find out what those particular coverage mandates are and whether their current insurance providers have ACA-compliant plans," he added.

In the absence of a state insurance exchange, Torre said public health programs will be the refuge for individuals who have no insurance plans.

Another salient feature of Obamacare is the Medicaid expansion, which opened up the program coverage to include individuals between the ages of 19 to 65 with incomes up to 138 percent of the poverty line.

In the U.S., Medicaid expansion is fully supported by the federal government. Individual states receive 100 percent federal contribution during the first three years. After a three-year transition period, they will begin contributing 10 percent.

Virgin Islands Delegate Donna Christensen announced earlier that the federal government will raise its contribution to the U.S. territories' Medicaid expenditures beginning this year, thus decreasing the matching funds the territories are required to contribute.

The current federal medical assistance percentage is 55 percent, which means U.S. territories – including Guam – are required to contribute the remaining 45 percent.

According to a press release from Christensen's office, the Centers for Medicare and Medicaid Services announced that the federal match will be raised to 57.2 percent, which will bring the territorial contribution rate down to 42.8 percent.

Employer mandate

The ACA's employer mandate does not apply to Guam either, Torre said.

This mandate requires that all businesses with more than 50 full-time equivalent employees provide health insurance for their full-time employees, or pay a per month "Employer Shared Responsibility Payment" on their federal tax return.

Torre said providing affordable insurance to employees is a challenge for Guam businesses due to the absence of a state exchange from which to purchase plans.

Local business organizations such as the Guam Chamber of Commerce, Guam Women’s Chamber of Commerce and the Guam Contractors Association have developed group health plans, which are especially attractive to small businesses that currently do not offer health coverage for themselves and their employees.

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