Wednesday, August 1
The Affordable Care Act and Expansion of Health Care Coverage to Low Income Populations
A workshop on The Affordable Care Act and the Impact on Community Health Providers will be presented by Stephanie Altman at this year’s 2012 NASW Regional Virtual Symposium on Healthcare on Thursday, September 20, 2012. This year’s symposium will be offering up to six CEUs. To read more about the symposium or to register, go to http://www.naswil.org.
The Patient Protection and Affordable Care Act [2] (ACA) created a framework to provide health care coverage to the uninsured and the underinsured through both public and private avenues. The ACA aims to tackle several longstanding barriers to health care coverage including lack of health insurance portability, pre-existing health condition exclusions, insurance coverage limitations, benefits limitations, and lack of affordability of coverage. The strategies employed by the ACA to overcome these barriers include new mandates to provide insurance, new opportunities to purchase affordable insurance through subsidies, and new opportunities to qualify for public insurance. The theme is “shared responsibility” between the insurance industry, federal and state governments, employers, and individuals. In order to share the responsibility for providing comprehensive affordable coverage, new requirements are imposed on insurers, employers, and individuals.
The ACA was designed to be implemented by federal and state governments in phases from 2010 until final implementation on January 1, 2014. Some of the provisions of the ACA are already in effect including the prohibition on excluding children based on pre-existing conditions, the prohibition on annual and lifetime maximums for insurance plans, coverage for dependent children up to age 26, elimination of co-pays for preventative services, and small business tax credits [3]. The major provisions of the ACA and the expansion of Medicaid do not go into effect until January 1, 2014 [4]. These provisions include the individual mandate to purchase insurance, the operation of state health benefits exchanges, the prohibition on exclusions based on pre-existing conditions for adults, the closing of the Medicare Part D doughnut hole, and the prohibition on annual limits and rating based on gender or health condition [5]. Although the expansion of Medicaid and major provisions do not go into effect until 2014, behind the scenes, the federal and state governments are currently working to create the data systems to enroll millions into coverage.
The Individual Mandate and the American Health Benefit Exchanges
One of the most controversial elements of the ACA is the individual mandate which requires most people [6] who are deemed financially able (and not eligible for Medicaid) to purchase insurance either through an employer or by purchasing an individual plan [7]. According to the Kaiser Family Foundation, almost nine in ten non-elderly people in the United States would either satisfy the mandate automatically or be exempt from it [8]. Exemptions to the individual mandate include religious reasons, undocumented immigrants, and very low income [9]. Those who are not exempt and who fail to purchase insurance will be subject to financial tax penalties [10]. The tax penalties for failing to purchase insurance start at $95 in 2014 and increase each year to $695 in 2016 [11]. The rationale for the individual mandate is to create a more even playing field for insurance so that the risk will be spread throughout both healthy and unhealthy populations.
The ACA also creates the establishment of a “health benefits exchange” in every state [12]. The exchange is intended to provide a user-friendly marketplace to allow consumers to purchase an insurance plan that best suits their needs [13]. The exchange has the potential to create a regulated and competitive environment that will ideally decrease the cost of health insurance [14]. States will have the option to implement increased consumer protections into the structure of the exchange [15]. These factors combined are predicted to make insurance purchased through the exchange more affordable. Furthermore, those persons who have incomes between 133% to 400% of the Federal Poverty Level (FPL) will be eligible for tax credits, which are intended to make purchasing insurance more affordable [16]. States may administer their own exchange or choose to administer the exchange through a federal-state partnership [17]. If a state fails to establish an exchange, the ACA provides for the establishment of a federally administered exchange [18].
The Medicaid Expansion
The ACA also significantly expands Medicaid by requiring states to cover nearly all people under the age of 65 with household incomes at or below 133% of the FPL beginning in January 2014 [19]. This expansion will mean that many low-income people who were formerly ineligible due to their failure to meet the categorical eligibility requirements will now be eligible for Medicaid. The federal Social Security Act and conforming regulations govern eligibility and coverage under Medicaid with some variation among the states [20]. Eligibility for and access to medical coverage under Medicaid and other public programs generally depends upon four major factors: categorical eligibility, citizenship/immigration status, income, and assets. Currently, categorical eligibility for Medicaid includes adults over age 65, pregnant women, children under age 19, parents of children under age 19, and people with disabilities [21]. However with the Medicaid expansion in 2014, this categorical eligibility will expand to include non-disabled adults without minor children [22]. Medicaid eligibility will remain the same for non-citizens (e.g., must be a legal permanent resident for five years, except pregnant woman and children; and no coverage for undocumented non-citizens).
Medicaid expansion for each participating state will be covered by the Federal Government at 100% of the state’s costs of coverage in 2014 with a gradual decrease in funding over time to 90% in 2020 [23]. In June 2012, the United States Supreme Court ruled that all of the provisions of the ACA are constitutional [24]. However, the Court held that states cannot be financially penalized if they fail to expand Medicaid to non-disabled adults without minor children [25]. At this time, it is not clear how many states will decide not to expand Medicaid or whether the Federal Government will impose any non-financial penalties on states that fail to expand. The decision to expand Medicaid is a critical one for states and for medical providers, as Medicaid is the largest insurer in the nation for people under age 65 [26]. The decision is especially critical for hospitals that provide uncompensated care to uninsured low income populations.
Looking forward to 2014, we expect that over one million people in Illinois will be newly eligible for health coverage through the options offered under the Affordable Care Act [27]. The information hub for health care reform implementation in Illinois, www.illinoishealthmatters.org, provides current information, resources, and data on the Affordable Care Act. Providers including social workers, medical personnel, community-based organizations, and consumer advocates will all be critical to the successful implementation of the ACA and the integration of low income and hard to reach populations into care.
REFERENCES
[1] Stephanie Altman, Programs and Policy Director, Health & Disability Advocates, http://www.hdadvocates.org and http://www.illinoishealthmatters.org; Meryl Prochaska, Law Student, Loyola University Chicago School of Law, J.D, expected 2014.
[2] Patient Protection and Affordable Care Act, P.L. 111-148 (Mar. 23, 2010).
[3] Id.
[4] Id .
[5] Id.
[6] The individual mandate applies to lawfully present individuals, which will include citizens and some non-citizens.
[7] Id. Patient Protection and Affordable Care Act, P.L. 111-148 (Mar. 23, 2010).
[8] The Henry J. Kaiser Family Foundation, The Individual Mandate: How Sweeping? THE HENRY J. KAISER FAMILY FOUNDAITN HEALTH REFORM SOURCE, (Mar. 2012), available at http://healthreform.kff.org/en/notes-on-health-insurance-and-reform/2012/march/the-individual-mandate-how-sweeping.aspx
[9] Id.
[10] Patient Protection and Affordable Care Act, P.L. 111-148 (Mar. 23, 2010).
[11] Id.
[12] Id.
[13] Id.
[14] Id; See also, The Henry J. Kaiser Family Foundation, What’s An Exchange? KAISER HEALTH NEWS, (July 2009), available at http://www.kaiserhealthnews.org/stories/2009/july/10/exchangesqa.aspx.
[15] Id; See also, Sarabeth Zemel, Abigail Arons, Christina Miller, et al., Building a Consumer-Oriented Exchange: Key Issues, NATIONAL ACADEMY for STATE HEALTH POLICY, (Feb. 2012), available at http://nashp.org/sites/default/files/Building_a_Consumer_Oriented_Exchange_final.pdf.
[16] Patient Protection and Affordable Care Act, P.L. 111-148 (Mar. 23, 2010).
[17] Patient Protection and Affordable Care Act, P.L. 111-148 (Mar. 23, 2010).
[18] Id.
[19] Id.
[20] Social Security Act, 42 U.S.C. § 1396 et seq. (2006); 42 C.F.R. § 430 et seq. (2012). Every state plan consists of a mix of required and optional categories of health services. See also, 42 U.S.C. § 1396d(a) (2006).
[21] 42 U.S.C. § 1396d(a).
[22] Patient Protection and Affordable Care Act, P.L. 111-148 (Mar. 23, 2010).
[23] Id.
[24] Nat'l Fed'n of Indep. Bus. v. Sebelius, 567 U. S. ____ (2012)
[25] Id.
[26] The Henry J. Kaiser Family Foundation, MEDICAID ENROLLMENT: DECEMBER 2010 DATA SNAPSHOT, KAISER COMM’N ON MEDICAID FACTS (Dec. 2011), available at http://www.kff.org/medicaid/upload/8050-04.pdf; See also, Medicaid and Medicare Summaries 2011, Centers for Medicare and Medicaid Services, http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/SummaryMedicareMedicaid.html.
[27] www.visualizinghealthreform.org
Stephanie F. Altman, JD, is programs and policy director at Health & Disability Advocates (HDA). Stephanie joined HDA in 1999 as a staff attorney specializing in Medicaid, Medicare, and health insurance issues. She represents children and adults in individual and class actions and also advocates for quality, accessible health care through administrative and legislative avenues. Stephanie co-authored Medical Assistance Programs in Illinois and the Illinois Medical Assistance Action Plan and conducts presentations and workshops on Medicaid and other disability topics for family and community groups, medical providers and hospital staff, and the legal profession. Prior to coming to HDA, she was assistant professor of clinical practice at the Chicago-Kent College of Law, specializing in health and disability law, and staff attorney with the Legal Assistance Foundation of Chicago. Stephanie has her law degree from Loyola University School of Law and a BA in English from Grinnell College.
