What is the Affordable Care Act?
THE AFFORDABLE CARE ACT
The Affordable Care Act is a comprehensive reform of medical care in the United States. It is also known as the ACA or as Obamacare.
This video from the Kaiser Family Foundation is a good primer on understanding the basics:
Do you recommend getting health insurance?
We have recommended individuals having at least a high-deductible health care plan to insure them in case of a major emergency. We liken this to home or car insurance. You would have insurance to cover the major roof repairs or auto accidents, but would handle the routine maintenance and prevention out of pocket.
Now with the ACA individuals and families may be eligible for tax credits and cost-sharing subsidies. This makes health insurance accessible to new populations that are in need. Some will receive significantly lower rates, yet others’ rates may increase 3-7 times from their previous coverage. How can this be? See below…
How are my health insurance rates determined?
Previously health insurance rates were determined by:
- Risk factors
- Pre-existing conditions
- Health Behaviors
- Services provided/covered with your plan
Now with the ACA, your premium calculation is based on your:
- Number of dependents
- Tobacco status
- Level of plan/benefits
As you can see, the ACA has removed:
- Pre-existing conditions
- Risk factors (other than age)
- Health behaviors (other than smoking)
This means that those that were previously denied coverage for pre-existing conditions, are now eligible for health insurance. It also means that everyone is paying for more similar coverage. All ACA compliant plans will be required to cover Essential Health Benefits. See below for more information on this aspect.
Because insurance companies cannot exclude individuals for pre-existing conditions or charge more based on most risk factors, rates may increase for healthy individuals as we all are asked to pay some of this added expense. Many of the plans will provide more comprehensive coverage due to the Essential Health Benefits. However, you may be required to purchase a plan that covers services that you may never use.
Based on the above 6 factors, the calculator on Healthcare.gov will determine your eligibility for level of benefits and for your subsidies. The subsidies make healthcare more affordable to individuals in lower income brackets.
How are the subsidies calculated?
Hold on for a little math… Subsidies are available to those with incomes between 100-400% of the Federal Poverty Level (FPL.) The degree of subsidy depends on what income bracket you are in. The income used in the calculation is called Modified Adjusted Gross Income (MAGI.) For the 2014 plans, you will use your projected income for 2014.
For most people this will be similar to your 2013 income and is close to your Adjusted Gross Income (AGI- line 37 on your tax form.) The MAGI calculation includes such income sources as wages, salary, foreign income, interest, dividends, and Social Security.
The MAGI calculation does not include income from gifts, inheritance ,and some other income sources are partially excluded. For more information on what is deductible in MAGI please see here. (Source: Kaiser Family Foundation).
To illustrate the maximum possible benefit, individuals and families between 100% and 250% of the FPL qualify for a significant level of subsidy, and a special plan called ‘Silver-enhanced.’ In 2013, the FPL was $11,490 for a single adult and $23,550 for a family of four. And so, 250% of FPL in 2013 means $28,725 for an individual and $58,875 for a family of four. For more information on what isdeductible in MAGI pleasesee here. (Source: Kaiser Family Foundation)
For individuals and families in this bracket, the Silver-enhanced plan covers traditional primary care visits with a low co-pay at a very affordable monthly premium. In addition, individuals with pre-existing conditions are now eligible for these plans whereas before they may have been declined.
So what about everyone else? In North Carolina it gets a little more complex because our State government decided not to expand Medicaid coverage. This creates four ‘brackets:’
- Individuals/Families below 100% of FPL
- Individuals/Families between 100-250% of FPL
- Individuals/Families between 250-400% of FPL
- Individuals/Families over 400% of FPL
- Below 100% of FPL does not qualify for ACA subsidy, but may qualify for Medicaid
- Between 100-250% of FPL qualifies for significant subsidy and are eligible for the Silver-enhanced plans
- Between 250-400% of FPL qualifies for some subsidy. You will really need to plug in the numbers on the website to know.
- Over 400% of FPL does not qualify for subsidy
When using the calculator, make sure that you choose the desired plan level (bronze, silver, gold, platinum) at the top of the calculator. Which brings us to the next question:
What are these plan levels?
The plan levels are symbolized by the metals bronze, silver, gold, and platinum. They increase in coverage and monthly premium in that order. The level of plan that is best for you will depend on:
Your health care needs
Your level of subsidy
Your preference or style of medical care
What if I already had insurance?
Some plans that meet the requirements of the ACA can be ‘grandfathered’ and will continue. Initially, non-ACA compliant plans were scheduled to expire at the end of 2013, and you would be asked to change to an ACA approved plan. This clause has been waived for one year, and insurers were asked to continue their previous coverage instead of cancelling the plans. However, not all insurers complied with this request and many are set to lose their previous plans.
Their argument has been that their rates on the Healthcare Exchange for ACA plans were based on the old policies expiring, and those citizens transitioning to the new ACA plans. Without the numbers of healthy individuals purchasing the more expensive, comprehensive plans, the insurance companies state that they would not be able to offset the expense of individuals with pre-existing conditions now eligible for insurance.
What about ‘catastrophic' plans?
Previously many used the phrase ‘Catastrophic’ and ‘High-Deductible’ health plan interchangeably. Now there are some key differences, and you can visit this article to understand more. Initially with the ACA, only individuals under 30 years old would be allowed to purchase Catastrophic plans.
This clause has been changed to allow those whose previous, non-ACA plans were cancelled to obtain Catastrophic plans. You can read this article to understand more of this change. Catastrophic plans are not available in all areas, and sometimes are actually more expensive than the Bronze level plans. Make sure that you read the data carefully.
What makes a plan ACA compliant?
Essential Health Benefits qualify plans under the ACA. As noted above, everyone will be purchasing the same ‘essential coverage’ and the difference in the metal levels has more to do with your co-insurance, deductible, co-pay, out of pocket expenses, and the addition of ‘other covered services.’ Wow. That seems like a lot.
The nuts and bolts of all of the plans will be the same, yet the more expensive plans will feature more included services, lower deductibles, co-pays, and out of pocket expense.
The common ‘nuts and bolts’ of all plans are the Ten Essential Health Benefits listed below:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive screening, annual wellness, and chronic disease management
- Pediatric services (including dental and vision)
Why did my rates increase?
Hmmm… You might be thinking that you don’t or even couldn’t use some of the Essential Health Benefits. That may be true. Under the ACA we will all be paying into the pool to help cover these services for those that need them. In addition, insurance companies cannot charge higher rates based on pre-existing conditions. Instead, they raised the rates on everyone to account for the additional risk. This rate increase is counterbalanced by subsidies for some, yet not everyone will qualify for significant subsidies or even any at all.
This is why for healthy individuals ages 27-64 and above 400% of FPL, your rates will likely increase. Some have likened this to paying for schools through property taxes when you do not have children. It is considered an essential public good. When considering the Constitutional legality of the ACA, the Supreme Court decided to view it similarly by seeing it as levying a new tax for a common good. For the time being, this likely very heated discussion has been delayed until 2015 when previously insured individuals may see their plans expire, and are required to purchase new ACA coverage. We will see what happens. The ACA will deploy in stages, and it is likely that there will be adjustments along the way.
What is the Individual Mandate?
As originally written, individuals would be required to pay a penalty if they did not obtain health insurance. This penalty would increase gradually until a maximum in 2016. Please see here for further information about the amount of penalty.
What are Medical Sharing Plans?
Prior to the ACA independent groups had created Medical Sharing Plans that function similar to a ‘health care cooperative.’ It is technically not an insurance company, but rather is a group of individuals that contributes into a collective ‘pool’ that will pay for medical expenses incurred by the members.
A clause in the ACA allows for members of Medical Sharing Plans to be exempt from the requirement to purchase health insurance. For some, these programs provide a more affordable option than the ACA compliant plans. Currently, these plans are faith-based. For more information about such plans you canread about them here.
What about employer-based insurance?
Under the ACA employers with greater than 50 employees will be required to provide health insurance for their employees. This requirement has been delayed for one year, however many employers have noticed that their insurance rates have increased dramatically. Unfortunately, this rate increase has caused some employers to either drop insurance for their employees or to switch them to high-deductible plans that are less expensive. Subsidies are available for small employers to help with insurance premiums, and this may help offset some of the rate increase.
Locally we have seen small employers wanting to provide some coverage for their employees, but not being able to afford the ACA premiums for businesses. We have partnered with multiple businesses to provide the Integrative Life Program for their employees. It is not ‘insurance,’ but the program offers excellent primary care services at a remarkably affordable rate. Employees can pair it with plans on the exchange to provide complete coverage. Often individuals are able to purchase plans cheaper than rates for businesses.
So, why would you come to IFMA in addition to having an ACA plan?
We offer more personal, comprehensive care at an affordable price. We treat ‘the whole you’ and focus on addressing the sources of your concerns in the most natural ways possible. At IFMA, we can do everything a traditional Family Physician may do and more:
Our visits are 2-3 times the length of traditional primary care offices.
We offer same and next day appointments with average wait times of 5 minutes.
Our physicians have additional training in integrative modalities and lifestyle approaches to both prevent and reverse illness
We help you develop a personalized,enjoyable lifestyle program that promotes optimal health rather than just treating symptoms with medications.
We have worked hard to develop a clinic that provides more comprehensive, personalized, and sustainable care than a traditional primary care model can provide.
We have found from personal experience that it is not possible to provide this level of primary care in a traditional insurance-based model. Office visits in traditional medical clinics usually provide an average of 10 minutes with the physician. Many practitioners are frustrated with the short visits that only allow time to treat symptoms rather than addressing the roots of illness and the factors contributing to chronic disease. We have designed our clinic from the ground up to empower you to both prevent and reverse illness so that you may enjoy a fulfilling life.
Can I see a physician at Integrative Family Medicine and seek reimbursement with my insurance?
We do not bill insurance, however, you may submit your own bill to your insurance for reimbursement at the ‘out of network rate’ for primary care. This rate will depend on your level of plan and is known as your co-insurance rate (the percentage you are responsible for paying.) We provide all of the documentation for you to submit.
How does your Integrative Life Membership (ILM) work with the Affordable Care Act?’
The Integrative Life Membership (ILM) is our approach to comprehensive health care. It pairs well with the ACA in a number of ways.
For some patients, the Catastrophic or Bronze level plans are the most affordable ACA options, and the ILM provides the primary care coverage that these plans can lack. Often the monthly ILM fee of $59 is less than what it would cost for the next level plan that provides primary care. This would depend on your level of subsidy, though it is possible that you can have better primary care for less money by pairing the ILP with the right ACA plan.
For employers looking to avoid significant premium increases while still providing high quality care, the ILM pairs well with the more affordable high deductible plans, and provides better care than traditional clinics can offer.
For small employers, the ILM is an affordable way to provide primary care for your employees.
For Medical Sharing Programs, the ILM qualifies for primary care services and aligns well with the preventive, lifestyle approach that these programs often emphasize.
For all patients, the ILM provides more comprehensive, personalized primary care than traditional offices can provide. We have many patients that have top-tier insurance, who come to us for the quality of care, personal attention, integrative approach, longer visits, and short waiting time. The ILM is an excellent value for care that aligns with your values.
If I pay for the ILM upfront for the year, can I submit this fee for reimbursement as the cost of my yearly preventive exam?
As of now, most plans reimburse the free ‘yearly preventive exams’ only with in-network providers. Currently we are considered ‘out of network.’ However, our initial visit is so comprehensive that you can submit it as a ’comprehensive screening exam’ instead of a ‘yearly preventive exam,’ and obtain excellent reimbursement.
This initial visit is included as part of the ILM. By paying for the ILM upfront as a ‘comprehensive screening exam’ and submitting for reimbursement, you can re-coop much of the expense of joining the ILM. This is the best both worlds- cost savings and better care. We will provide all of the documentation for you. Reimbursement will be at the ‘out of network’ rate for your plan.
Can I submit my ILM monthly fee for reimbursement?
If you choose the monthly $59 option instead of the yearly $708 option, you will not be able to submit the ILP enrollment fee for reimbursement. Office visits, labs, and procedures may be eligible for reimbursement, depending on your insurance plan.
Can I have my lab tests or other studies reimbursed?
Most of the laboratories that we use will bill insurance for you directly. Sometimes insurance companies decline a bill, and in that case you would be required to pay for the labs out of pocket at full price. Many labs are included for free in the ILP, and so it is usually easier to do these labs under the ILP than dealing with the risk of a denied claim.
If you are an ILP member, other labs are discounted significantly and you can decide whether it is worth seeking reimbursement.
If you do file the labs through your insurance, we provide interpretation for free as part of the ILP, and charge non-ILP members an interpretation fee to account for our time.
Studies done outside of IFMA such as x-rays, MRI’s, and CT-scans can be billed directly to insurance through the organization performing the study. You may have co-pays or deductibles depending on your plan.
To better understand the metal levels, you may benefit from this clip from BCBSNC:
As seen in the video, a key difference is the co-insurance level. Co-insurance is the amount that you are responsible for paying. Co-insurance kicks in for services covered with no deductible or after you have met your deductible. The deductible and covered services vary from plan to plan, though all plans cover the Essential Health Benefit (explained below). The metals levels follow this basic layout with Bronze level being the most affordable and Platinum being the most expensive:
- Bronze co-insurance 40%/ insurance pays 60%
- Silver co-insurance 30%/ insurance pays 70%
- Gold co-insurance 20%/ insurance pays 80%
- Platinum co-insurance 10%/ insurance pays 90%
For healthy individuals that do not qualify for a ‘Silver-enhanced’ plan, a Bronze plan with a higher deductible might be the most economical, appropriate choice. For individuals that may require a lot of health care over the year, a higher level plan with more included services may be more appropriate. This is where you need to evaluate your health care needs, as well as the style of care you would like to receive.
If you do not qualify for a ‘Silver-enhanced plan’ the difference between the Bronze plans and the Silver plans offering primary care visits, is often more than our monthly Integrative Life Program (ILP) fee. Pairing the ILP with a higher deductible Bronze plan, and possibly even a Health Savings Account (HSA,) is a good option for having care that aligns with your values at a lower price.
The HSA option is available paired with specific ACA qualified plans. The HSA lets you have additional control of your health care dollars to use on qualified expenses that may not be covered by your plan such as Acupuncture or other services. You can visit these sites for more information about qualified expenses:HSA Center and IRS
In North Carolina there are two insurance companies offering plans on the Health Insurance Exchanges: Blue Cross/Blue Shield and Coventry One. To qualify for subsidies, plans must be ACA compliant, so make sure that you purchase a qualified plan. The easiest ways to know for sure is to purchase through the health insurance exchange at healthcare.gov, to work directly with an agent, or to work with a navigator.
If there are unanswered questions, you may contact a health insurance navigator through the references below:
In-person Health Insurance Navigator Assistance Hotline at 1-855-733-3711
Pisgah Legal Services (62 Charlotte St., Asheville, 828-253-0406)
The Council on Aging (46 Sheffield Circle, Asheville, 828-277-8288)
You can also contact a local insurance representive that can meet with your personally to discuss your situation. These representatives work off of a comission from the insurance company. It will not cost you anything and should not increase your insurance rate.
Insurance representatives will present their organization’s plans. Consider the insurance company that you would like to use, and choose a representative from that organization. Only a few companies are offering Affordable Care Act plans in North Carolina. To receive the subsidies, you will need to make sure that the representative is signing you up through Healthcare.gov. This will help avoid any confusion and accidentally signing up for a plan lacking the subsidies that you may be eligible to receive.
If you are looking for a representative from Blue Cross Blue Shield, Michael Murphy from Platinum Exchange is the representative that offered an excellent talk at our clinic. He is located on Haywood Road in West Asheville, and is active in our local community. He is donating a portion of his comission each month to Brother Wolf Animal Rescue and other local non-profit service organizations. You may reach him at: 828-575-2781.