Another Doomed Attempt to Derail the ACA. Or Is It?

The U.S. House of Representatives has just passed a measure to delay the implementation of the tax penalty ($95 or 1% of your income) for one year, which marks the 50th time the House has voted to derail Obamacare. This measure has no possibility of passage by the Senate, and even if that were to happen, would certainly invite the president’s veto. Or would it? With so much waffling concerning implementation of the ACA — delay of the employer mandate, of the open enrollment period, and the extension of non-ACA-compliant policies into 2017 — one has to wonder. The mid-term elections seem to be taking their toll on the successful rollout of the ACA.

Junk Insurance Still Offered

Those junky older health insurance policies out of compliance with ACA reforms will still be allowed another two years (until 2017), no thanks to a recent ruling from the Obama administration. The cancellation of up to 4.7 million of these individual policies caused considerable political damage last year, just as the Health Insurance Marketplace was suffering from a disastrous rollout. Since then, the administration gave these older policies, most of them with far less financial protection and fewer benefits that what is allowed under the Affordable Care Act, a year’s reprieve, though the final decision as to their fate still relies on each state’s approval. (About half of all states continue to allow these plans in order to smooth the transition into ACA compliant policies.) This reprieve will affect up to 1.5 million people, who will now be able to hang onto these less-expensive plans until 2017.

New Timeline for 2014/15 Open Enrollment

The open enrollment window for sign-ups for 2015 plans has been delayed. Originally scheduled to begin October 15th, 2014, it will now start on Nov. 15th, 2014, and will run to Jan. 15th, 2015. In other words, we now have another option for putting a present under the Christmas Tree. This date change will also extend the enrollment period by a full week. Reason? By extending the deadline, this will allow insurance companies more time to accurately set their premium prices.

Medicaid Expansion on the Ropes

Everyone seems to be asking the same question: “Is Utah going to expand Medicaid.” The short answer seems to be: “Yes…maybe.” Gov. Gary Herbert has gone on record that “doing nothing is not an option.” Unfortunately, House Speaker Becky Lockhart (R-Provo) is rejecting any expansion plan that depends on federal funding, a position lampooned in a Salt Lake Tribune editorial as “drivel.” At this point, the State Senate appears more amenable to the idea of Medicaid expansion, while the House of Representatives is digging in its collective heels against the whole idea. Jim Dunnigan (R-Taylorsville), an insurance agency owner in private life, heads the legislative task force on Medicaid expansion, and appears to favor an option to privatize Medicaid dollars, using the money as grants to purchase private insurance on either the federal health exchange or possibly through Avenue H, the state small business exchange. The buzz is that there will be some expansion to cover those with incomes under the poverty level, who currently are locked out of receiving subsidies on the federal health exchange. But any expansion plan that does not include people up to 138 percent of the federal poverty level will have a hard time getting federal support. And if the Medicaid expansion only goes up to 100 percent of the Federal Poverty Level, the federal government’s share of the cost for that expansion drops from 100 percent to 70 percent. This has led some Utah representatives to suggest we forgo federal funds in favor of a state-funded approach that would allow much more flexibility in designing an expansion that may or may not include those below the Federal Poverty Level. The governor has said that the Medicaid predicament may not be solved by the time this 45-day session ends, and that it might take a special session of the Legislature later this year come up with a final solution. Bottomline: While we are optimistic that Medicaid expansion will take place in Utah, what at first looked like a slam dunk appears to be going into overtime. We had hoped that Medicaid expansion might happen as early as July 1st, but a Jan. 1st start date is looking more likely.

An Obamacare Alternative? Not.

Our own Sen. Orin Hatch is one of the three sponsors of the Republican alternative to Obamacare, which is called CARE. How does this plan compare to the ACA? Under Obamacare, you are no longer charged more for your insurance due to preexisting conditions. The Republican plan would also limit what you would be charged for preexisting conditions — but only if you are continuously insured. Those without insurance would still have to pay dearly because of any preexisting conditions. Under Obamacare, subsidies are granted for those earning up to 400 percent of the Federal Poverty Level. Under the Republican plan, those subsidies would be scaled back to 300 percent. Under Obamacare, the most an insurance company can charge the oldest enrollees is three times what a 21-year-old would pay. Under the Republican plan, insurance companies would be able to charge five times the same amount. As for Medicaid, the Republican plan would favor block grants, thus limiting expansion to pregnant women and children living below the Federal Poverty Level, and also give states the option of participating or not. Additionally, the Republican plan would repeal all of the taxes that pay for Obamacare and instead place a limit on the current tax exclusion for employer-sponsored insurance. This means that only 65 percent of the price of an average health plan would be tax-free, and the rest would have to be paid for with post-tax dollars. (It is estimated that the federal government could gain over $100 billion in revenue each year by taxing health plans.) Also, the Republican plan would get rid of the essential health benefits, as well as gender rating. Repeal Obamacare? I think not.

Utah Dithers on Medicaid Expansion

Utah is one of the few states still dithering on whether or not to expand Medicaid to cover people making up to 138 percent of the Federal Poverty Level (FPL), despite the Federal Government’s offer of paying 100 percent of the expansion cost until 2017, and 90 percent of all costs after 2020. (The Feds currently pay 70% of Medicaid costs.) What’s the rationale for not expanding Medicaid in Utah? (Apart from the economic boost it will give the state.) As one government insider told me, it boils down to this: “We don’t trust the federal government.” But this isn’t to say that Utah will not be expanding coverage. While Governor Herbert — and it’s his choice to make — is not considering a full expansion, he is still deciding between three options: do nothing; cover up to 100 percent of the FPL, leaving the rest to shop for federal subsidies on the Federal Marketplace; or partially expand Medicaid to 100 percent, and use Medicaid dollars to subsidize private insurance for those between 101 and 138 percent of FPL. This same government insider opined that option three, a privatization of Medicaid dollars, is the likeliest. This is partially due to the Medicaid Expansion task force being led by Chairman Rep. Jim Dunnigan, R-Taylorsville, who happens to be an insurance broker. His argument is that Medicaid restricts a person’s choice of doctors, while putting those at 100 to 138 percent of FPL into private plans on the Healthcare Marketplace with Medicaid-derived subsidies would benefit both patients and providers with more choices and higher reimbursements. This same government insider said this third option — contingent upon the Feds allowing this flexibility with Medicaid dollars — could be implemented by July 1st.

While I’m a firm supporter of Medicaid expansion, I’m willing to admit option three has some merit, as long as the state subsidies on the Health Marketplace are equal to or greater than what the Federal government provides. The important thing is to make sure everyone is covered. And to do this, the public has to keep the pressure on the governor. Most everyone who has weighed in — the AFL/CIO, League of Women’s Voters, even the Utah Hospital Association — support Medicaid expansion. (The LDS church is strangely silent on the issue.) To support Medicaid extension, write an email to Governor Herbert: http://act.betterutah.org/letter/medicaid_expansion/

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Don’t Trip into the Medicaid Black Hole!

If you are enrolling in the Federal Marketplace, beware of tripping into the Medicaid black hole. Utah is still deciding on whether or not to expand Medicaid, yet the Federal Marketplace doesn’t seem to acknowledge this, and is continuing to send applicants who would be eligible for Medicaid in other states — those whose income is up to 138 percent of the Federal Poverty Level, or $15,415 — over to Utah’s Department of Workforce Services for eligibility determination. Not only is this a needless step — currently only adults with children who earn less than $623 per month (44% of FPL) are eligible for Medicaid in Utah — but a time-consuming one with no end in sight. When I talked to DWS personnel last week, they said they have not seen any eligibility cases coming through the federal pipeline, which indicates an electronic logjam. Indeed,  according to news reports, the Federal Marketplace still does not have the capacity to transfer full electronic files to the states. Bottomline: as long as you state your Modified Adjusted Gross Income as being above $15,415, you’ll avoid getting shunted off to the state for a needless Medicaid eligibility determination.

 

Healthcare.gov: Terminator to the Rescue!

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Is the Healthcare.gov website back in business, as the administration promised last month? Kind of. And one way it hopes to clear up all the application errors has been to install a new button, allowing you to “Reset My Application.”  This takes care of one huge pitfall to the original application process: the inability to go back and edit your information. But if you have already enrolled in an insurance plan — inadvertently or not –you must first terminate your coverage in order to reset your application. And this weekend, another new button has appeared that will allow you to do this. Unfortunately, it doesn’t seem to be working as of yet. That is one of the frustrations of trying to fix a website while keeping it “live.” (Kind of like trying to fix a car engine while it’s running.) At least these two changes signal the direction these “fixes” are heading. Bottomline: If you are stuck with a glitchy application and/or mistakenly enrolled in a plan, don’t resort to the paper appeal (there is no electronic one yet built into the website). Give them a few days to sort out the glitches with the “reset application” and “terminate coverage” buttons, knowing that we are at least heading in the right direction.

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The Big Bite: Pediatric Dental and the ACA

Turns out, declaring that pediatric dental care is now covered under the Affordable Care Act as an Essential Health Benefit (one of 10 mandated benefits) has more bark than bite. Since the ACA has allowed states lots of latitude in providing this essential coverage, Utah responded by not forcing the medical plans to incorporate pediatric dental into their coverage. Instead, this “essential benefit” is offered as a separate stand-alone dental plan on the Health Marketplace. And since it is sold as a separate stand-alone plan, pediatric dental coverage is not considered “mandatory.” (There is no penalty for not purchasing pediatric dental for your child.) Consequently, in one of those Catch-22 situations, what is “essential” is not mandatory — at least in the state of Utah. What’s worse, these stand-alone plans are not eligible for subsidies or cost reductions, even if there is a subsidy surplus after purchasing a medical plan. Silver Lining: at least these dental plans — which run from $10 to $50 per month and have low if any deductibles — are not embedded into a medical plan’s much higher deductibles, which effectively would result in paying full cost for  dental expenses.

Grandfathered Plans…Or Whose Your Daddy Now?

There has been a wave of coverage about people receiving cancellations of their health insurance, which is happening mostly to those who buy their own insurance rather than get it from their employers (about 5 percent of the population). Many of these cancelled policies are junk insurance based on the “pray I don’t get sick” plan, and should be replaced. But others are solid policies that have been “grandfathered” (policies in effect before the passage of the ACA on March 23, 2010), which means they don’t have to comply with all aspects of the new ACA provisions. Many of these grandfathered plans are being cancelled by the insurance companies, as they are too hard to maintain in today’s evolving marketplace. Grandfathered plans are not able to change much, or they risk losing their “grandfathered” status. These plans may not have to offer all of the 10 Essential Health Benefits, or provide free preventative services, nor do they have to comply with the 3-to-1 age band (older people can’t be charged more than three times rate of a younger person). But neither can these plans enroll new applicants (except for spouses and dependents), impose no lifetime dollar caps, reduce benefits, or raise premiums more than 15 percent above medical inflation. This puts these grandfathered plans in a financial straightjacket that the insurance companies would like to wiggle out of. As most individual insurance policies are issued as one-year contracts with guaranteed renewability, the insurance companies have the ability to cancel these policies, and offer newer, often higher priced policies in their place. Thus the cancellation notices. The press has been piling on, accusing President Obama of lying when he said that people who like their health insurance plans can keep them. But it’s not the government that is canceling health insurance policies. It’s the insurance companies, looking to make a profit. Bottomline: Even if you have a grandfathered individual health insurance plan, expect to make the jump into an ACA-compliant health plan sometime within the next 12 months.