Chapter 3: Taking Advantage of the Affordable Care Act (ACA) and Other Insurance Options

Appendix 1

Who Is Eligible for Medicaid?

The Federal Poverty Level (FPL) is defined yearly by the Department of Health and Human Services (HHS) as a uniform measure of income that is adjusted for inflation. It was updated on November 15, 2015,¹ for the year 2015. In general, for an individual, the FPL is a yearly income of $11,670 or less; for a family of four, $23,850 or less.

According to federal guidelines for 2015, a single person may qualify for Medicaid if he/she earned less than 138 percent of the federal poverty level (less than $16,105). What’s considered the poverty level varies for each state. Refer to the website listed in footnote² to find details for your state.

Because the Supreme Court left it up to individual states to determine eligibility requirements for Medicaid (whether or not to adopt the less restrictive, more liberal federal guidelines for Medicaid), nineteen states as of July 2016, decided to continue their more restrictive eligibility requirements and not expand Medicaid. Thus, a state not following the more liberal guidelines could arbitrarily set the Medicaid eligibility requirement for an individual, who earns less than $11,000 yearly, (rather than $16,105) making it more difficult for citizens with low income to be eligible for Medicaid. See footnote³ to see who qualifies for Medicaid in your state.

Unfortunately, nearly half of all low-income Americans currently without health insurance live in the nineteen states that decided not to expand Medicaid (for example, Texas, Florida, Kansas, Alabama, Mississippi, and Georgia). This leaves millions of citizens from these states ineligible for Medicaid.

Fortunately, states not expanding Medicaid now will have an opportunity to expand in future years so current inequities may eventually change. The history of Medicaid shows that it took several years for many states to participate when it first began in the 1960s.

For the year 2016: You may have been eligible for a federal tax credit (1) if you earned more than 133 percent of the poverty level⁴ (more than $15,521) but less than 400 percent of the poverty level (about $46,680 for a single person, less than $95,400 for a family of four); (2) didn’t qualify for a government insurance plan (such as Medicare or Medicaid); (3) if you were not insured under your parents’ policy; and (4) didn’t have affordable job-based insurance. Returning again to Clara’s predicament, she and her husband’s income was considerably below $95,400. Because their insurance agent obtained a commercial family policy through a private insurance exchange that had governmental approval, they qualified for a significant federal tax credit.

See the website cited in footnote⁵ to understand the difference between a tax credit and subsidy to help you determine if you may be eligible. Given the complexity of these issues, we advise discussing whether you qualify for a tax credit or subsidy with your accountant or financial advisor.

Appendix 2

How You Can Benefit from Electronic Medical Records

Electronic medical record (EMR) systems are electronic records of health-related information that’s inputted, managed, and reviewed by authorized clinicians and designated others within and across healthcare organizations. They are somewhat like the personal health record (PHR) described in Chapter 1.

EMRs allow doctors and hospitals to receive laboratory and other test results quickly and thus be able to share with their patients and members of the healthcare team important medical information. EMRs foster teamwork and communication between health professionals and hospitals; they monitor medications prescribed by your physicians in order to avoid harmful drug interactions, to avoid duplicate prescriptions, and to alert your health professionals about the risks of possible substance abuse.

The ACA provided financial grants and incentives to hospitals and doctors for using EMRs, reporting patient outcomes, and communicating with patients and other health professionals. Safeguards to protect patient confidentiality have continued to improve.

A major problem is that physicians and hospitals have purchased different brands of expensive software that often don’t communicate adequately with other software systems,⁶ so information sharing is often delayed. The computer industry and the government are working to solve this problem, but it will take considerable time.

What impact does the increasing use of EMRs have on each of us? If you are middle age or older, you may not be accustomed to observing, during your medical office or hospital visit, your doctor appearing more focused on inputting information about you into his/her computer than maintaining good eye contact and connectedness. He/she may appear frustrated when encountering problems inputting all the required information. You may feel you’re competing with the computer for your doctor’s attention. You’re likely to get annoyed!

Your annoyance may be allayed knowing that important medical information can be shared (with your permission) with your other health professionals with the tap of a finger on a computer key. EMRs also facilitate coordination of your medical care.

In 2008, only 7 percent of physicians and 9 percent of hospitals used EMRs. By the end of 2017, approximately 90 percent of office-based physicians and over 95 percent of hospitals used EMRs. They were rewarded with higher reimbursements from Medicare. Since 2015, hospitals and physicians not adopting EMRs have been financially penalized by government insurers.⁷

Appendix 3

Details About Medicare Part D (Drug) Coverage

As of 2013, if you had Medicare and purchased one of the many Part D plans (drug coverage), you paid a monthly premium between $0 and $l50 and a yearly deductible (about $325 for most plans) before Medicare covered 75 percent of drug costs until the total of what Medicare paid out reached $2,960. You then entered what’s termed the “doughnut hole” at which point you then had to pay the entire cost of all prescription drugs until your out-of-pocket expenses totaled $4,750, after which Medicare covered 95 percent of drug costs approved by your particular Part D plan. Because of improvements under the ACA, the doughnut hole has been shrinking and closed permanently in 2018.

Before selecting a Part D plan, it’s advisable to make a list of all the prescription medications you take regularly and then ask your pharmacist or call Medicare to see which of the many Part D plans covers most, if not all, of your current medications. It’s important to do this around October each year for January 1, when your plan renews because different Part D plans may make substantial price changes, even for generic medications.

Appendix 4

Accountable Care Organizations Study (ACO)

The Accountable Care Organizations Study (ACO) began in 2012 and enlisted hundreds of physician groups across the country. The physician groups were rewarded financially if they demonstrated improved quality and coordination of care for their patients (such as reduced hospitalizations, improved medication monitoring, and depression screening) while reducing medical costs. Results have been very positive.⁸ In 2014, 353 group medical practices improved quality of care and reduced medical spending by more than $411 million and qualified for financial rewards. What’s particularly interesting is that the ACOs that had been in the program longest (since 2012), and therefore had the most experience, produced the best outcomes for their patients. The results of this and other innovative models of healthcare delivery being studied may eventually be adopted as a standard by physicians, hospitals, and governmental and private insurance plans.

Appendix 5

Insurance Companies’ Past Inadequate Payment for Patients with Mental and Substance Use Disorders

Before the ACA, many commercial insurance companies paid physicians treating a medically ill patient a high percentage of the insurance’s approved fee (often eighty percent), once the yearly deductible was met, with the patient responsible for the copayment (usually 20 percent). In contrast, depending on the particular policy, patients treated for a mental and/or substance abuse disorder were often responsible for between thirty to fifty percent of the approved fee, and some insurance policies didn’t pay for this treatment. This disparity often discouraged even those with insurance from seeking treatment.

Appendix 6

You May be Eligible for a Federal Tax Credit or a Subsidy

If you applied for insurance that met ACA standards for the year 2017 using a government or private insurance exchange, you might have asked if you were eligible for a tax credit. After inputting your anticipated income for 2017 and other information, the computer screen would indicate if you were eligible and what your monthly insurance premium would be after the federal tax credit was applied. So, you would know your monthly premiums, taking into account the tax credit, or you could apply the tax credit when completing your tax return. To see what your insurance premium would be after the tax credit is applied you can use free online comparison calculators such as those offered from the federal government.⁹

Cost-sharing subsidies help you (if eligible) pay for medical care by reducing the cost of your copay when you see your doctor or by reducing the amount you pay for medical services after your insurance has paid their portion. Cost-sharing subsidies were available for tax year 2015 if your income (as an individual) was between 100 percent ($11,670) and 250 percent ($29,175) of the federal poverty level, or for a family of four, between $28,850 and $95,400. For the year 2016 and subsequent years, we suggest using online cost calculators. More importantly, given the complexity of all this, we advise discussing tax credits and subsidies with your accountant or financial advisor.

Appendix 7

How People Were Affected When Their Individual PPO Plans were Terminated

A striking real-life story of how these changes impacted a patient with an individual PPO plan is Mr. Romero, a sixty-year-old resident of New Mexico who purposefully purchased an individual PPO plan two decades ago to cover yearly visits to his specialists at the Mayo Clinic in Arizona. Since he was not part of a group PPO plan through an employer, his individual PPO plan was terminated in 2016. His lament was, “I go to the Mayo Clinic because everyone knows me there.” He compared shopping for a new plan “akin to a contact sport like scuba diving that requires hands-on research and deep dives into the telephone and Internet.” After three months of searching, Mr. Romero purchased an individual HMO policy with a different insurer but with a much higher premium and deductible. It took him another month to find a new in-network PC Phys close to home and several more months to obtain a referral to the type of PC Phys specialist he had seen at the Mayo Clinic. Mr. Romero is another example of how patients are often short-changed in our complex, changing healthcare system. But, he also demonstrates how persistence, determination, and resourcefulness in the quest for quality healthcare is usually rewarded.