Supreme Court upholds subsidies in King v. Burwell

So what does this mean?

For those of you how haven’t been following this issue let me start with what this case was about.

When the Affordable Care Act was originally written, the thought was that all of the states would manage their own exchanges. In reality that is not what happened. There are currently 34 states who do not operate their own exchanges and rely on the federal exchange to provide coverage to their constituents.

Those who have been challenging the Affordable Care Act found a part of the law that would have completely undermined the intent of the Affordable Care Act. The part of the law that they challenged was that it was written that subsidies are only available to those who enrolled in a state exchange. According to them, those in the 34 states who enrolled in plans through the marketplace would not be eligible for the subsidies that made coverage affordable. It’s estimated that it would be about 6 Million people who could have been affected by this.

Today the Supreme court voted 6-3 to uphold the subsidies and the interpretation of the Internal Revenue Services that individuals in all 50 states should be able to access these subsidies.

Vote Breakdown:

Roberts filed the opinion with Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan joining

Scalia filed a dissenting opinion with Thomas and Alito joining

The decision was based on the fact that they had to read the law in context and not just plain language. It was determined that in context the words “an Exchange established by the State under [42 U. S. C. §18031]” is ambiguous. Due to the ambiguity, the Supreme Court had to look at the phrase in the greater context of the Act. They also found that other parts of the law would not make sense if this phrase was defined as plain language.

When looking at the greater context of the Act the Supreme Court had to reject the interpretation of the petitioners because “it would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very “death spirals” that Congress designed the Act to avoid”.

It would have removed the subsidies from the states that didn’t operate their own exchanges and many of those individuals would have been exempt from the coverage requirement because the insurance would not have been affordable. These two facts would have also had a negative impact on the state exchanges as well since they would have struggled to operate in this environment.

So why should we care? Michigan is one those states that participated in the federal exchanges. As some of you know American Indian Health and Family services has played an important role in enrolling both tribal members and non-tribal members through the Marketplace and Healthy Michigan. If the Supreme Court had not upheld the subsidies, most of the individuals that we enrolled in the marketplace would no longer be able to afford coverage and would become uninsured again.

If you would like to read the filing please visit here

Health Insurance Glossary

There are so many different terms that thrown around and I found this great glossary of terms that I thought I would share with you.

Affordable Care Act: A set of health care reforms passed by Congress and signed into law by President Barack Obama in March 2010. The foal of this law, which is more formally called the Patient Protection and Affordable Care Act and more informally nicknamed Obamacare, was to make affordable quality health care accessible to more Americans. It also aims to give both the insured and uninsured new patient protections to make coverage more fair and easier to understand.

COBRA: Stands for Consolidated Omnibus Budget Reconciliation Act. It allows workers the right to stay on their employer’s health insurance plan for a certain period of time, though they may be required to pay the entire cost of their coverage.

Deductible: A specific amount of money that you must pay before your health insurance will start paying on a health-care claim you have made. This is an out-of-pocket cost. Typically, if you have an HMO, it does not have a deductible (but the trade-off is you are limited to doctors/care providers within that HMO’s “network”).

“Donut Hole”: In Medicare Part D, which covers prescription drugs, most plans have a coverage gap, which is often referred to as the “donut hole”, where coverage is cut off after spending a certain amount and then starts up again after you’ve reached a new threshold of cost. The Affordable Care Act eliminates this gap in coverage by 2020.

Employer-based plans: Insurance plans that are provided by your employer and partially covered by them. This is the type of insurance plan most Americans have.

Employer Mandate: The requirement that businesses with more than 50 full-time employees must offer health insurance to their employees and their dependents under the age of 26, starting in 2015.

Health Insurance Marketplace: The online marketplace where you can search for and purchase health insurance. Also called Health Care Exchange, HIX, Obamacare Exchanges, and Health Benefits Exchange. It’s available at Healthcare.gov

Healthy Kids: A free health insurance plan for children under age 19 and pregnant women. Income requirements do apply.

Individual Mandate: The requirement that all Americans have health insurance in 2014. Those who do not comply face a fine (Some exceptions apply, i.e. Members of federally recognized tribes and others who are eligible for Indian Health Services).

Medicaid: Federal Health care program provided to people whose household income below 133 % of the federal poverty level (Not all states expanded Medicaid, but Michigan did).

Medicare: Federal health care program provided to those age 65 or over and younger people with disabilities.

Medicare Advantage: Medicare benefits provided by a private insurance company.

MIChild: a low-cost health insurance plan for children under age 19. Income requirements do apply.

Minimum essential coverage: The level of health care coverage that all Americans are required to have in 2014 or pay a penalty (some exceptions apply)

Out-of-network: A health care provider with whom your insurance company has not negotiated a rate of payment. See a doctor “out-of-network” can cost you more than seeing a doctor “in-network”.

Out-of-pocket: Expenses you have to pay yourself, above and beyond your insurance premiums. Typically includes copays and deductibles.

Pre-existing condition: A health issue that you already had that would sometimes disqualify you from getting insurance, or would cause your premiums to be increased. Under the new health care reform, insurance companies can no longer discriminate against those with pre-existing conditions or levy additional fees.

Premium: The rate you are charged for having active insurance. It is influenced by various factors and may be paid annually or in smaller installments over the year.

Primary Care Provider: A doctor, nurse practitioner or physician assistant who is the primary person you go to about your health care and is your go-to medical advisor.

Subsidies:Tax credits to help those who earn less than 400% of the federal poverty level buy insurance

Thank you to Health Care Reform + You Magazine for these definitions

ACA Exemptions and Benefits for American Indians and Alaska Natives

There have been a lot of questions about who qualifies for the ACA exemptions and benefits as an American Indian/Alaska Native. First of all let me tell you that it is very confusing because the definition of AI/AN in the Affordable Care Act does not meet the definition under Indian Health Services or Medicaid.

Here is what I can tell you:

1) If you are an AI/AN who is a member of a federally recognized tribe:

  • You are exempt from the individual mandate to purchase health insurance
  • You receive the full benefits including: Little to no-co pays/deductibles depending on your income and special open enrollment periods.

2) If you an AI/AN who is not a member of a federally recognized but are otherwise eligible to receive services from IHS including at urban clinics, like AIHFS:

  • You can apply for a hardship exemption through the marketplace (paper forms are currently in development)
  • You do not have access to the benefits such as copays/deductibles or the open enrollment periods.

Remember there are many other types of exemptions available as well, so do not hesitate to contact someone at AIHFS for further clarification or assistance.

Affordable Care Act- Open Enrollment Starts Tomorrow

As many of you know, open enrollment for the Affordable Care Act starts tomorrow. Just a reminder that AIHFS is one of the Navigation sites that is available to assist you. You can call and make an appointment to see one of our enrollment specialists, there will be limited amounts of walk-ins (but expect long waits), there is a kiosk to use in our lobby( available soon), and you can always email us with questions at hbenefits@aihfs.org. You can also post questions on this blog as well.

The New York Times did post an article that answers some basic questions as a guide to the marketplace. I have posted that below:

A Guide to the New Exchanges for Health Insurance

By TARA SIEGEL BERNARD

Given all of the rhetoric about the Obama administration’s health care law, it’s not surprising that many consumers are confused about how the new insurance exchanges will actually work. Some states that oppose the law have gone as far as intentionally limiting the information that trickles out to its residents.

But after much anticipation, the curtain will finally rise on the exchanges next week, providing millions of consumers with an online marketplace to compare health insurance plans and then buy the coverage on the spot.

The exchanges are likely to be most attractive to people who qualify for subsidized coverage. Individuals with low and moderate incomes may be eligible for a tax credit, which can be used right away, like a gift card, to reduce their monthly premiums. People with pre-existing conditions will no longer be denied coverage or charged more (this applies to most plans outside the exchanges, too). And all of the plans on the exchanges will be required to cover a list of essential services, from maternity care to mental health care.

“In today’s individual market, it’s like Swiss cheese coverage,” said Sarah Dash, a research fellow at the Health Policy Institute at Georgetown University. “Consumers should have an easier time figuring out what they are getting for their money.”

But it’s still going to take some time to analyze the plans and their costs, which are expected to vary widely across the states. And the coverage may still pinch many families’ budgets. Fortunately, there’s a six-month window, from now to March 31, for people to figure it all out.

Here’s some information to get you started:

Q. Where can I apply or get more information on the exchanges?

A. To avoid fraud artists, enter through the front door: Healthcare.gov. From there, you can find links to the exchange offered in your state. There may be technical glitches as the program gets started, so alternatively, you can call 1-800-318-2596.

Q . When does coverage go into effect?

A. You can apply as early as Oct. 1, but coverage won’t begin until Jan. 1. The enrollment period for coverage in 2014 closes on March 31, 2014. After that, you can enroll only if you have a major life event like a job loss, birth, marriage or divorce.

Q. What sort of coverage will be offered?

A. All plans will have to provide the same set of essential benefits, including prescriptions, preventive care, doctor visits, emergency services and hospitalization (this also applies to most individual and small-employer group plans sold outside of the exchanges). But plans can offer additional benefits, or different numbers of services like physical therapy, so you’ll need to do a side-by-side comparison to see what fits your needs — or at least the needs you can anticipate.

Q. Are the plans sold on the exchange more comprehensive than plans outside?

A. There are four plan levels, each named for a precious metal. They all generally offer the same essential benefits, but their cost structures vary. The lower the premium, the higher the out-of-pocket costs.

The bronze level plan, for instance, has the lowest premiums, but will require consumers to shoulder more costs out of pocket. They generally cover 60 percent of a typical population’s out-of-pocket costs, and include deductibles, co-payments and coinsurance. The silver plans cover 70 percent; gold, 80 percent; while platinum covers 90 percent (and therefore carries the highest premiums).

If you buy a plan on an exchange, your annual out-of-pocket costs cannot exceed $6,350 for individuals and $12,700 for a family of two or more in 2014. Catastrophic plans are also available to people under age 30 or those suffering a financial hardship. These carry high deductibles (equivalent to the out-of-pocket maximum, or $6,350 for a single person, in 2014). You cannot apply tax credits to these plans, either.

Premiums will vary across the states because of a variety of factors, like market competition, the underlying cost of care and the negotiating power of the exchanges, according to Kaiser research.

Q. If the costs with plan levels are similar, how will plans differ within the metal levels?

A. Networks of doctors and hospitals will differ, and cost-sharing structures may also vary. One plan might have lower deductibles and higher co-pays, whereas another plan might have a separate deductible for prescriptions. Various medications may also be covered differently. “If you are someone who is taking medicines, make sure you know what your drugs will cost in the various plans being offered,” said Cheryl Fish-Parcham, deputy director of health policy at Families USA, a Washington consumer advocacy group.

Q. Will I be eligible for a premium tax credit (subsidized coverage)?

A. People with income between 100 percent of the poverty line (or about $23,550 for a family of four) and 400 percent of poverty ($94,200 for a family of four) are eligible for a tax credit to defray premium costs. (All income eligibility is based on your modified adjusted gross income; the online version of this column links to a guide explaining how that is calculated).

The tax credits are set up so that consumers will not have to pay more than a certain percentage of their income, ranging from 2 percent for those with incomes of up to 133 percent of the poverty level ($15,282 for a single and $31,322 for a family of four) to 9.5 percent for those with income of 300 to 400 percent of the poverty level, according to the Center on Budget and Policy Priorities. The dollar amounts of the credits are calculated based on the costs of the second-to-lowest-cost silver plan available to you.

Kaiser has a calculator that can give you an idea of your eligibility.

Q. Can I get help with my out-of-pocket expenses, like deductibles?

A. People with incomes between 100 percent of the federal poverty line ($23,550 for a family of four) and 250 percent ($58,875 for a family of four) are also eligible for cost-sharing reductions, which means you’ll pay less for items including deductibles and co-payments, and you’ll have lower out-of-pocket maximums.

There is a big caveat: you can qualify for the reductions only if you buy a silver plan. When choosing a silver plan — and compare them closely, because they will differ — the exchange Web site will automatically show what you will pay, with the cost-sharing reductions included, according to the Center on Budget and Policy Priorities.

Even if you’re tempted by the bronze plans’ lower premiums, remember you’ll probably end up paying more for out-of-pocket costs. For people who qualify for both premium and cost-sharing subsidies, the silver plan will usually be the better deal, Ms. Fish-Parcham said.

Q. Should I use all of my subsidy at once? How can I avoid owing taxes?

A. The premium subsidies are delivered in the form of a refundable tax credit, which can be used immediately to reduce your monthly premiums.

You can use it all right away, or you can use part of it, or none at all. If you expect your income to remain the same, you might use the entire credit. But if your income is likely to rise, it may pay to use only a portion of the subsidy. That way, you’ll avoid owing money to the I.R.S. at tax time.

If your income does change, report it to the exchange. If your income drops, you may be eligible for a larger credit. Changes in family size should also be reported. “It will all get reconciled on your taxes in the spring of 2015,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation.

Q. How can I find out if my doctor accepts exchange-based insurance?

A. Many of the insurance providers’ networks of doctors and hospitals will be narrower than are typically found in commercial insurance, as my colleague reported this week. So just because your doctor accepts, say, a Blue Cross plan provided by your employer, that doesn’t necessarily mean the doctor will take the same carrier’s plan offered on the exchange.

The plans will be required to provide a directory that lists their network’s providers, Ms. Pollitz said, so inspect them carefully.

Q. How will I know if my drugs are covered by the plans?

A. The exchanges must include a summary of benefits and coverage for each plan. That includes information about what your co-payments would be for generic, brand name and specialty drugs. It should also provide a Web link to the plan’s list of covered drugs and how they are categorized by a particular plan, said Ms. Fish-Parcham.

Q. If I have employer-based coverage, can I go to the exchange for coverage?

A. You can, but you probably won’t want to. Your employer’s plan is usually a better deal. Many employers heavily subsidize your premiums and you can pay for your coverage using pretax dollars, something you can’t do if you buy coverage on the exchange.

“Plus, employer plans are typically fairly generous,” said Lynn Quincy, a senior policy analyst at Consumers Union.

Besides, if your employer offers you coverage, you probably won’t qualify for a tax credit unless your share of the premium (for the lowest-cost plan for individual coverage offered by your employer) is more than 9.5 percent of your modified adjusted gross income, Ms. Quincy explained.

If your employer’s insurance plan doesn’t cover 60 percent of medical costs, on average (what’s known as “minimum value”) you may also qualify for subsidized coverage. Your employer is supposed to let you know where the plan falls in terms of minimum costs. “If you are spending huge amounts out of pocket each year and you have a high deductible, it’s worth looking at what your possibilities are,” said Sara R. Collins, vice president of the health care coverage and access program at the Commonwealth Fund.

Q. Am I eligible for Medicaid?

A. The health care law aimed to expand Medicaid so that everyone under age 65 would qualify if they earned up to 138 percent of the federal poverty level (that’s about $16,000 for an individual and $32,500 for a family of four in 2014). But the Supreme Court ruled in June that the decision to expand Medicaid is up to the states — and only 26 states have decided to move forward, according to Kaiser.

Q. So if I’m poor but not eligible for Medicaid, can I get insurance on the exchange?

A. Yes, but unfortunately, many people in this situation won’t be able to afford it. People who don’t qualify for their state’s Medicaid program but earn too little to qualify for subsidies on the exchange will have to pay full price for the coverage offered on the exchanges. So if you can’t get Medicaid and your income is below 100 percent of the poverty level, you will not be eligible for subsidized coverage on the exchange.

Q. What if I’m self-employed or own a small business?

A. If you’re self-employed with no employees, you can shop for coverage on the exchange.

If you have fewer than 50 employees, you can get coverage for yourself and your workers though the Small Business Health Options program, known as the SHOP Marketplace. “Small employers have always wanted to have the buying clout of a large employer and the SHOP exchanges offer them just that,” said Kevin Lucia, project director at Georgetown University’s Health Policy Institute.

Q. What are the penalties for not having coverage? Are there any exceptions?

A. Most people will be required to have insurance, with some exceptions. You are not required to buy insurance if: the cost of insurance premiums would exceed 8 percent of your income, your income is below the threshold for filing taxes, you have a certified hardship, or you would have qualified for Medicaid but live in a state that did not expand the program. Illegal immigrants, the incarcerated, members of Indian tribes and those who qualify for certain religious reasons are also exempt.

Everyone else will pay a penalty. In 2014, it will cost you $95 or approximately 1 percent of your income, whichever is greater. The penalties will rise each year.

Update from Today-More on HB 4714

I hope everyone had a good and safe labor day weekend. We are starting this week with both good and bad news.

The good news is that the Michigan House of Representatives did approve the Medicaid Expansion bill today. All that is left is for the Governor to  sign the bill which is expected when he returns from a trip.

However, there is a little bit of bad news. Unfortunately this bill will not go into effect immediately. It is not expected to go into effect until April 2014. There is a lot of uncertainties about how this will impact residents especially when it comes to the insurance mandate and penalties that do start on January 1st. Again I wish I had all the answers but for now, I must wait with you until these questions get answered.

Just a reminder that enrollment starts October 1st. Your AIHFS staff, including myself, have started their 25 hour Navigator training in preparation for being able to assist you.

Here is some additional articles that represent both those in favor of Medicaid Expansion and those who do not support it.

 

Medicaid Expansion in Michigan

The Senate voted last night 8/28/13 to expand Medicaid via HB 4714. It almost didn’t pass with the first vote 19-18. Since there wasn’t a tie or 20 votes the bill did not pass. The senate went into a recess and came back for a reconsideration vote and finally passed 20-18.

For those of you who are interested, the following senators voted in favor of HB 4714:
Ananich, Jim
Anderson, Glenn
Bieda, Steven M
Casperson, Tom
Gregory, Vincent
Hansen, Goeff
Hood, Morris W III
Hopgood, Hoon-Yung
Hunter, Tupac A.
Johnson, Bert
Kahn, Roger
Kowall, Mike
Marleau, Jim
Richardville, Randy
Rocca, Tory
Smith, Virgil
Walker, Howard
Warren, Rebekah
Whitmer, Gretchen
Young, Coleman II

I will post a basic synopsis of this bill and what it means for American Indian Health and Family Services later this week.

I have also attached some links below for some different news articles regarding this topic.