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Issues in Health Reform

What now that SCOTUS will hear the case against the ACA tax subsidies?

Posted on by rriporte

I spoke to this issue in depth in a July 22 post when the issue about ACA tax subsidies was just heating up with circuit and district court rulings.  The Supreme Court has agreed to hear the case.  That earlier posting is still accurate.  https://blogs.ksre.ksu.edu/issuesinhealthreform/aca-tax-credits-may-be-taken-away-by-courts/

The fact that the SCOTUS has chosen to take this up, and some say a bit out of expected cycle, has raised concern among the supporters of ACA, and of the tax subsidies in particular.  The ACA covers many things beyond assuring affordable health insurance for many (the otherwise eligible Medicaid population in many states including Kansas got left out by a June 2012 SCOTUS decision that said the feds could not coerce states into expanding Medicaid by threatening to pull all Medicaid funds if that state did not participate).  It has funds for health care workforce development and community health projects, and ways to improve the efficiency of Medicare and delivery of care in general.  However, expanding the number of insured is clearly a main centerpiece of the legislation and a contrary ruling many say would effectively dismantle that aspect of the ACA.  The SCOTUS  will decide if the consumers in the 27 states with federally facilitated exchanges (marketplaces) can still receive those tax subsidies.  Without them we would assume that insurance policies would once again be unaffordable for most as 80% of those enrolled in health insurance plans through those marketplaces nationwide are now receiving subsidies.

 

 

Medicaid cost recovery through payback from the estates of the deceased

Posted on by rriporte

Recovering costs from the estates of the deceased for Medicaid funds spent on long term (institutional) care has been a federal requirement for many years.  This has allowed the public to recoup usually extraordinary costs (average $80,000 annually) and have money to pay for future Medicaid recipients.

 

Because of those extraordinary costs of nursing home care, it is not surprising that Medicaid becomes the major payer even in circumstances when one was middle class and may have owned property.  To be eligible for Medicaid one must have less than some small amount of assets, usually about $2000 cash (or spend down to that amount).  A spouse can continue to live in the family home but when that surviving spouse also dies, then that property can be sold and cashed out to repay Medicaid. For some this comes as a surprise. Some financially savvy older adults (often at the urging of their adult children) learn how to divest their estates over time so that there is no estate property left in the older adults’ name for the state to come back and claim.  Whether or not we think that is an ethical practice, it is a legal one if done over time, years before a person may actually need nursing home care.

 

So, what is all the new news about?  In most states, Medicaid only paid for children, adults over 65 or the disabled in institutional settings.  With the expansion of Medicaid as part of the Affordable Care Act, states that have expanded their Medicaid eligibility are now paying for more than nursing home medical costs for large numbers of adults.  Ten of those states have their own laws that require the reimbursement of the Medicaid program from the estates of the deceased for adults over 55 who were receiving Medicaid even for regular medical care service costs.  The large expansion of the Medicaid population to cover children and adults under 65 in states with those laws put the estates of those over 55 in jeopardy.  This makes the Medicaid program that pays for medical expenses now a defacto short term loan program, with the family house being held as collateral.

 

Medicaid seems to be pretty alone as a publicly sponsored program that recoups costs from a former recipient’s estate.  The unfortunate consequence of what might be fiscally sound policy is that is discourages those who need medical care from receiving it, countering the major intent of extending insurance.  That intent was to remove the financial barrier to seeking care especially for those of lowest income who were likely delaying much needed medical attention.  As adults over 55 in those states find out about this caveat they are avoiding using Medicaid as a payer of their medical care so that they can at least bequest their houses to their intended beneficiaries.  Complicating this is that those on Medicaid rarely receive any bills so they have no way of knowing how much the program has paid on their behalf, nor how much their estate may owe upon their deaths.

 

Now that the cadre of those qualifying for Medicaid and needing medical services rather than institutional home care grows, it will be interesting to see how states with those repayment laws address this.  Also interesting will be the public discussion about what exactly an assistance program is and when is it appropriate to require payback, as if the assistance were only a loan.

How the health care law is making a difference for the people of Kansas

Posted on by rriporte

A report issued by the Department of Health and Human Services details how the people of Kansas are faring after the implementation of the Affordable Care Act (ACA/Obamacare).  The full report can be found here:  http://www.hhs.gov/healthcare/facts/bystate/ks.html

It is written by the administration so the tone is favorable.  The report has a section that details who is now insured through the Kansas Health Insurance Marketplace (the Kansas Exchange).  Over 57,000 selected plans in that marketplace.  And, as for the national average, almost 80% of 57,000 are receiving financial assistance paying for the premiums.

States have a choice as to whether or not to expand their Medicaid programs.  Kansas is one of 24 states that have chosen not to expand at this time.  Still, because of heightened interest in health insurance, over 28,000 Kansans have been newly enrolled in the Kansas Medicaid program, KanCare.  If Kansas had expanded there would be another 100,000 eligible.

The report goes on to give additional detail about new coverage benefits and how many Kansans are affected.  It also acknowledges that in Kansas, Medicare beneficiaries have save over $100 million on prescription drugs because of new cost sharing in that program.

 

 

 

ACA Tax Credits may be taken away by courts

Posted on by rriporte

We will all be hearing lots on the news in the next days and weeks about some conflicting rulings regarding one important aspect of the Affordable Care Act…the premium tax credits and tax subsidies that help low income families afford their new health insurance policies.  It is expected that the Supreme Court will be the ultimate arbiter of this, especially since there are conflicting lower court rulings.  The NY Times piece covers the issue well.

In a nutshell….

1.  some states have federally facilitated Exchanges/Marketplaces (including Kansas), and others went ahead and fully designed their own Exchanges.
2.  The plaintiffs have argued (now successfully in at least one ruling) that the original law was written to allow tax credits to consumers purchasing insurance policies through state Exchanges, not through federally facilitated state Exchanges.
3.  The nuance being argued is whether or not Exchanges that were set up by the feds BUT IN STATES and with insurance policies sold in those states are the same as state Exchanges.  One court says yes, another says no.  Most pundits say the law was ambigious on this regard so it is up to the administrative body, in this case, the IRS, to interpret  and put into operation the law.  Others had said in the past that the writers were really trying to push the states to setting up their own Exchanges and hence, denying consumers the tax credit in those states that relied on the feds to set up the Exchange, ergo a presumed incentive to go with the state Exchange.  When fewer than half of the states felt ready to design their own Exchanges (and some chose not to for seemingly political reasons), then the administration asked that this aspect be interpreted more fully to include all Exchanges.  This will certainly be an interesting court battle to watch…but one with severe consequences for many Kansans and other Americans.

IF the Supreme Court holds that consumers are eligible for tax credits and subsidy cost sharing only Exchanges set up by the states this will negate tax credits for those in 36 states, including Kansas.

57,000 Kansans signed up for policies in the Kansas Marketplace.  National figures show over 80% of those consumers have been eligible for tax credits.  Some are only paying $20/month for policies that would otherwise cost approximately between $200-$600 month.  One can quickly see how the current rulings negating the ability of the IRS to implement tax credits would result in having those lower income families once again unable to afford insurance.

Note:  people may qualify for subsidies if they have incomes of up to $45,960 for individuals and up to $94,200 for a family of four.  The Congressional Budget Office estimates that subsidies this year will average $4,400 for each person who receives a subsidy.

SCOTUS decision on birth control increases inequities between employer based and Exchange health insurance policies

Posted on by rriporte

A less talked about impact of the Supreme Court ruling about employer based insurance and birth control coverage is the widening gap of freedom of choice between those locked into employer based insurance and those able to purchase insurance available in the Marketplace/Exchanges.

In the past, most employer based insurance has been among the most comprehensive, especially compared to plans many individuals were able to afford on their own in the private market.  Because of ACA however, now all plans cover at minimum the same set of essential benefits…until this ruling.  Now some employers will be able to limit coverage.  (Note, some grandfathered plans aren’t yet up to date on all preventive benefits but they are set to sunset as soon as those plans make a change.)

So can affected employees shop in the Marketplaces for coverage they may prefer? Yes, but because they have an employer based option they are not eligible for tax credits if they do so. These workers would basically be turning down the employer-supported plan and going solo on costs.

Giving less freedom of choice to workers was rational within the broader intent of ACA to expand, rather than supplant, the current insurance market that relied heavily on employer based plans.  To keep the balance weighted with employers as major providers of insurance, there is both the large employer mandate (delayed until January 2015) and the rule that makes workers who are offered affordable and adequate health insurance through their employer ineligible for the tax premium credits in the Marketplace.

Therefore, the SCOTUS decision intensifies this inequity between those who can freely go to the Exchanges and those who are locked into employer based plans.  This becomes acute as women may now have even more reason to want to make their own choices as to their best insurance options.  Women who would prefer their plans to cover a full range of contraceptives will be at a financial disadvantage to those without employer based options who get premium assistance.  Over 80% of people purchasing Marketplace policies qualified for such assistance.

How do I get health insurance before the next open enrollment period starting Nov 15, 2014?

Posted on by rriporte

 

 

 

Everyone with few exceptions (see https://www.healthcare.gov/exemptions) must have health insurance or may have to pay a penalty. Medicare Tri-Care, VA and Indian Health Service all remain the main insurance for those eligible for those programs. Because these programs qualify as insurance beneficiaries are not subject to penalties for being uninsured.

 Here are health insurance options for you to consider.

Your Job

 •   Your insurance stays the same unless your employer decides to make changes. If this work-based insurance is not affordable (costs more than 9.5% of your household income for a single policy) you may be eligible for financial help if purchasing a policy in the Marketplace.

 The Marketplace at healthcare.gov

 •   The Marketplace refers to a place for specific kinds of insurance policies that have been approved by the federal government to offer policies in Kansas.  Most think of it as the website where those policies can be found but it exists regardless of the website.  People can enroll via phone, mail, in person, or yes at the website.  The website offers an easy way to view and compare plans for providers, services and price. Anyone can shop in the Marketplace however, open enrollment is closed for 2014.

  •   Open enrollment for 2014 ended March 31. Only people with special circumstances can purchase in the Marketplace now   marketplace.cms.gov/help-us/enroll-limited-circumstances.pdf

  On November 15, 2014 the Marketplace will reopen for everyone else. KHN has a good story about those circumstances http://www.kaiserhealthnews.org/Stories/2014/May/09/Andrew-reader-question-on-insurance-between-open-enrollments .aspx?utm_campaign=KHN%3A+Daily+Health+Policy+Report&utm_source=hs_email &utm_medium=email&utm_contnt=12736814&hsenc+p2ANqtz-8xGUxlk04t5iCJ8D7Y8Jwxuv9SS7HSFMuLR4B3eRiCwWSwqRzCZzABM9aYnlvSyRfYLombN4pnWb0OtxE6FVYARW2m7A&_hsmi=12736814

  •   U.S. citizens, nationals and lawfully present immigrants living in the United States and not in prison can enroll in health insurance in the Marketplace.

  •   If you purchase in the Marketplace AND your household income is less than 400% of the federal poverty level (FPL), you may get tax credits to reduce the cost of the premium.  If it is less than 250% of FPL, you may also get help paying for out-of-pocket costs. This is not true for those who have work-based insurance that is considered adequate and affordable. Adequate means that the plan pays on average 60% of all your medical costs in a given year. Affordable is considered less than 9.5% of your annual household income. If work based insurance meets those criteria than you are not eligible for tax credits.

 KanCare at http://www.kancare.ks.gov/

 •   KanCare is the Kansas Medicaid program for U.S. citizens and lawfully present immigrants of low income who are over 65, under 18, or disabled.

 •   Children and pregnant women may be eligible with household incomes less than 225% FPL.

  •      Those over 65 have both income and asset limits, depending on the specific program.

  •   Check eligibility at http://www.kancare.ks.gov/ or the Marketplace healthcare.gov

  Additional options for young adults

  •   Stay on parents’ policies until age 26.

  •   Buy a catastrophic plan (for those under age 30 or with special financial circumstances).

  •   For higher education students, ask about student health insurance.

  Buy a private plan from an agent or broker.

  To get help or learn more to enroll in the Marketplace or KanCare

 •   Call the National Help Center at 1-800-318-2596 available 24/7.

 

Marketplace Eligibility Monthly Income

Marketplace Eligibility Monthly Income

Group Size

Up to 250% FPL Help with out-of-pocket costs

Up to 400% FPL Income limit for Tax Credits

1

$2,394

$3,830

2

$3,231

$5,170

3

$4,069

$6,510

For each additional person add

For each additional person add

$837

$1340

 

Report argues for Medicaid expansion in Kansas

Posted on by rriporte

A recent report from the Kansas Center for Economic growth makes the case the expanding Medicaid would be good for Kansas local economies, especially rural communities, and the state as a whole. “Medicaid expansion would go a long way toward increasing economic security for uninsured workers.  It also would be an asset for small businesses—which will benefit from healthier and more productive employees—and the economy as a whole—which will benefit from the flow of federal dollars into the state.” The report details the types of occupations, and the wages in those occupations, where working class people are most likely to be uninsured and eligible for Medicaid if the state chose to expand within new federal guidelines.

The Affordable Care Act was crafted in a way that relied on states expanded their Medicaid programs to cover individuals who made less than 133% of the federal poverty line (138% in actuality when tax deductions were considered).  The federal government is set to pick up 100% of the expenses for 3 years and then 90% thereafter.  The Supreme Court decision of June 2012 made Medicaid expansions voluntary.  Kansas is one of 25 states that has not chosen to expand.

 

 

Where are we now that open enrollment has closed?

Posted on by rriporte

It’s been a busy few months as we reached the ACA enrollment deadline.  There are lots of reports of how many are actually enrolled (about 8 million with the latest report).  The White House also announced that 35% of those who signed up for coverage were under 35. Twenty-eight percent are between the ages of 18 and 34, falling just shy of the administration’s 40% target. This demographic is needed to keep premium levels down, and to offset the costs of insuring older, and likely sicker, enrollees.
As importantly there have been several recent surveys showing that the rates of the uninsured are dropping.  For a good summary of those reports and explanations of what they mean see http://www.californiahealthline.org/articles/2014/4/17/surveys-highlight-acas-effect-on-us-uninsured-rate
Because some consumers will be eligible for special enrollment periods and KanCare enrollment is year-round, we expect to see the insured rate increase over time. We will be sure to pass along the most recent data on the number of Kansas’s successful enrollments as they are made available – so stay tuned!
There are important questions to be answered and I suspect we will see research trying to answer these in the coming months:
•    Who is still uninsured?
–    What are their options?
–    What will states do re Medicaid expansion?
•    Who is now uninsured who was previously insured?
–    Some very high cost counties, region and age
–    What happened with cancellations? Who was affected? Is new option better?
–    Did mandate work consistently across populations?
•    Is insurance affordable?  In whose terms? And through time (are premiums rising more or less than before?)
•    Has more insurance led to better health outcomes for individuals?  How has it affected community vitality?

Smaller large employers (50-99) are now being given until Jan 2016 to come into compliance with ACA employer mandate

Posted on by rriporte

The Obama administration has made what many consider a political move by extending the deadline for compliance with the employer mandate for smaller large employers (50-99).  The Kaiser Foundation has rounded up several news article that have covered the story.

Previous blogs (July 4, 12, August 20, 2013) discussed how the original delay in the employer mandate really didn’t matter much in terms of getting Americans insured.  That argument is still relevant here. It’s the Individual Mandate that matters…even if some may prefer the idea of having employers be more responsible for offering health insurance as a benefit to their employees.

As we may remember the original employer mandate was to apply Jan 1, 2014 for all businesses with over 50 employees.  These businesses were going to be required to offer insurance to all of their full time employees (defined as 30 hrs week or more).

The other requirements were that the insurance must be

  • affordable, defined as premiums that cost no more to the worker than 9.5% of annual household income AND
  • adequate, an insurance term that categorizes the type of shared costs of the plan.  To be adequate, the plans must overall pay for about 60% of the annual costs of care on average for their workers. These plans in the Marketplace are categorized as Bronze plans.

The first delay was giving those businesses until Jan 1, 2015.  This extended that delay for the smallest of those larger businesses til Jan 1, 2016. 

While trying to quell one political concern (having insurance policies cancelled or changed around November election time 2014) it raises a new one:  why do businesses keep getting a delay in their mandate but not individuals?  The answer to that may have to do more with the economics of how ACA is designed rather than political expediency or out-right unfairness. (And this was addressed in that Aug 20 blog.)

The goal of the ACA was to get as many people insured, as fully as possible.  Even if employers aren’t mandated to provide insurance to their workers there are now alternatives with relatively affordable plans:  the Marketplaces.

The plans being offered in the Marketplaces are both “affordable” and at least “adequate” as defined above.  That is, they are much better than many of the plans that people in the private market, and even those in employer-sponsored plans, were holding.  While some have complained that the premiums of the policies in the Marketplaces are too high, there are tax credits to help share the cost of those premiums for individuals and families under 400% of poverty (roughly $94,200 for a family of four).  BUT those Marketplace plans are really very affordable for people who had previously been locked out of insurance all together, usually because they had pre-existing conditions.

So, even though many may be bothered by not requiring employers to offer insurance, others will see that as long as there are policies that cannot turn away seekers, and policies that are relatively affordable, then ACA can continue to march toward fuller insurance for all Americans.

It could also be that one of the ACA best assets is that it frees Americans from relying on the workplace for insurance.  That is, as we delink insurance from the workplace it will free up a lot more opportunities for people to work where and for whom they choose.(see blog dated Nov 12.)  The Marketplaces offer the group rated premiums that previously were only available to the largest of businesses.  Now individuals can get those policies on their own.  In fact, this latter issue is one that caused a stir last week.  A CBO report was issued that said 2 million people would leave the workforce.  Republicans claimed this was because of employers laying off workers.  The CBO actually attributed most of this chance to choices people would be making to leave jobs they no longer wanted.  Apparently many are working solely to maintain health insurance coverage which they would not be able to purchase elsewhere (or be eligible for Medicaid in states where eligibility criteria was expanding to include all who were under 138% of the poverty line).

As a reminder, businesses with less than 50 employees were NOT mandated to offer insurance and those under 25 employees were offered financial tax incentives if they were to choose to do so.

 

 

Remind me….how are people going to be insured?

Posted on by rriporte

Starting April 1, 2014 most Americans are going to have to have health insurance or face financial penalties. 

1.       Many will already be insured through:

a.        the public health programs (Medicare, VA, TriCare, Medicaid, Indian Health Service)

b.      Employer sponsored insurance

                                                               i.      Including adult children up to age 26 when employer offers a family plan

2.       Those who are not insured will be required to purchase health insurance IF their income falls above income guidelines requirements.  (for example, over $15,856 for a single individual, $32,499 for a family of four).  

a.       Options for those above income cutoff include purchasing:

                                                               i.      Employer sponsored insurance

                                                             ii.      A policy in the private insurance market

                                                            iii.      A policy in the Exchange (through healthcare.gov)

b.      Penalties for not complying

                                                               i.      Will be reconciled at tax time

                                                             ii.      Will increase each year. 

                                                            iii.      In 2014 it will cost per family member 1% of income or $95 whichever is MORE

1.       Fines for children are half those of adults

2.       The fine for the total family maxes out at $295

c.       To expand options and to offer comprehensive insurance coverage, insurance policies are being offered in state Exchanges.  Anyone can buy a policy in their state’s Exchange.  No one can be denied health insurance coverage for a pre-existing condition nor can they be charged a higher premium because they are sick.

d.      The Exchanges in all states are open for business.  For some, the website version is working better than in others.  In most of the states that chose to coordinate their own Exchanges those sites are working well.  For the rest of the states, the federal website, healthcare.gov is working much more smoothly than when the website was originally launched Oct 1 and consumers are signing up. 

e.      Most of those who do not already have insurance and choose to purchase a policy through the Exchange will find that they are eligible for assistance for paying for health insurance premiums and even for copays for the actual care.

                                                               i.      If household income is below 400% of the Federal Poverty Level (FPL) ($94,200 for a family of four) AND they are not offered affordable and adequate health insurance at work, families are eligible for assistance to pay for premiums.  These are called tax credits.  How much assistance is given depends on income.  Families in these categories are limited to between 2-9% of that household income as the maximum amount of premium they have to pay.

1.       An adequate employer based policy will cover on average 60% of the costs of medical care in a given year.

2.       An affordable employer based policy will cost no more than 8% of an individual’s annual household income.

                                                             ii.      If household income is below 250% of the FPL ($58,875 for a family of four) families are also eligible for assistance to pay for medical care.  These are called tax subsidies.  How much assistance is given again depends on income.

3.       Those living below this income cutoff:

a.       In states that have expanded their Medicaid eligibility criteria, these individuals 

                                                               i.      will be enrolled in Medicaid when they submit their application through the Exchange.  The federal government is paying 100%of these costs til 2017 when states will then be asked to share the costs by contributing 10% while the feds will pay 90% of total costs.

b.      In states that have not expanded their Medicaid eligibility criteria (including Kansas), these individuals

                                                               i.      Will not be fined for not purchasing insurance

                                                             ii.      Will still be able to private pay and depend upon safety net providers and the good graces of health care providers who provider care to those who cannot pay.