Tag Archive: federal poverty level

ACA’s welfare-based means testing adds program complexity, risk for error

According to a Government Accountability Office report released Thursday, some individuals received subsidies to help them purchase exchange coverage while they were also enrolled in Medicaid. According to Carolyn Yocom, a director of health care studies at GAO, the duplicate coverage could mean the federal government is “paying twice — subsidizing exchange coverage and reimbursing states for Medicaid spending — for individuals enrolled in both types of coverage.”The House is expected to hold a hearing on the issue on Friday (Pear, New York Times, 10/22).The report noted that an estimated seven million U.S. residents have changing incomes that likely qualify them for Medicaid at some times and for the ACA’s subsidies at others. According to the report, it is difficult for the federal government to differentiate between the eligibility groups (Howell, Washington Times, 10/22). Further, the report noted that CMS “does not have procedures to automatically terminate subsidized exchange coverage when individuals are determined eligible for Medicaid.”

Source: GAO Finds Federal Gov’t Paid for Duplicate Coverage Under ACA – California Healthline

While broadening health coverage for Americans under age 65 not covered by predominant employer-sponsored health coverage, the Patient Protection and Affordable Care Act is not exactly seamless in its approach, leading to the kinds of problems the GAO identified. Largely because of its complexity in using monthly household income — the traditional means test for state welfare eligibility — and siloed forms of coverage.

The first seam is at 100 percent of household federal poverty level (FPL) — the minimum income in order to be eligible to purchase subsidized coverage on state health benefit exchanges. Then come six income tranches that determine the amount of the subsidy, topping out at another seam — 400 percent of FPL — above which subsidies are no longer available. Overlaying these at the lower household income range is yet another seam in states that have opted to expand Medicaid — a household income of 138 percent of FPL. With many lower income households frequently moving back and forth across this seam, it’s easy to see how state health benefit exchanges would be hard pressed to keep track to ensure these households are in the correct program at all times.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

More than a quarter of nation’s medically uninsured to remain so under ACA

The Patient Protection and Affordable Care Act is described as the most comprehensive overhaul of the U.S. health care system in the nearly 50 years since the enactment of Medicare and Medicaid to serve the elderly and poor, respectively. However as far reaching as it is, it fails to achieve its public policy goal of ensuring all Americans have access to an affordable health plan, concludes a Kaiser Family Foundation report.

The ACA and the Supreme Court’s June 2012 ruling in NFIB v. Sebelius invalidating the law’s mandate on states to expand Medicaid eligibility requirements means 5.2 million Americans residing in states that have not voluntarily opted to expand Medicaid eligibility – an estimated 27 percent of the medically uninsured – will remain without any form of public or private coverage.

The primary reason is in 22 of those 26 states, families earning less than 100 percent of the Federal Poverty Level (FPL) are under the ACA ineligible to purchase subsidized private coverage in the state health benefit exchange marketplace. But in most of those states, many families are also not eligible for Medicaid because their household income exceeds state Medicaid eligibility levels. (See Table 1 of the KFF issue brief, showing nearly all of those states cutting off Medicaid eligibility at 75 percent of FPL and most around half of FPL for a family of three). Also remaining uncovered in nearly all of those states (except Wisconsin) are low income childless adults earning less than 100 percent of FPL.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

We are the 401%: Middle class households ineligible for exchange subsidies could reignite health reform

A little more than three years ago, steep premium increases in California’s individual market sparked outrage from Sacramento to Washington, providing a political tipping point for the enactment of the then-moribund Patient Protection and Affordable Care Act (PPACA). This fall and into 2014, those without government or employer-sponsored health coverage who earn more than 400 percent of the federal poverty level (FPL) ($45,960 for singles; $92,200 for a family of four) may find themselves outraged yet again by sharp double digit premium increases.  Under the PPACA, those earning in excess of 400 percent of FPL are ineligible for income tax subsidies available for qualified health plans purchased through state health benefit exchanges.  They will bear the full amount of higher premiums on their own.

Projections of the impact of the PPACA individual market reforms issued this week by the Society of Actuaries (on the medical cost impact of those newly insured under the law) and the actuarial consulting firm Milliman (on premiums in California) suggest premiums for plan year 2014 will rise significantly for these relatively higher income middle class households.  The Society of Actuaries estimates the PPACA individual market reforms will drive up claims costs by an average of 32 percent nationally by 2017 and by double digits in as many as 43 states.  The Milliman study commissioned by the California exchange, Covered California, estimates those currently insured with incomes exceeding 400 percent of FPL purchasing the lowest cost “bronze” rated plan covering 60 percent of expected costs can expect a 30.1 percent premium hike for 2014.   “Currently insured individuals with incomes greater than 400% of FPL will experience the largest increases,” the Milliman study notes.

Those in this income range likely to be hit with the biggest increases are middle class people in their 50s and 60s – the large Baby Boomer demographic not yet Medicare eligible and not covered by employer-sponsored plans.  A major potential implication of higher premiums on top of the already relatively high rates paid by this age group (new age rating rules under the PPACA will provide some relief) is many of them may find even bronze-rated coverage unaffordable and go uninsured, contrary to the policy goal of the PPACA to increase affordability and access to coverage.

If 2014 rate increases for 401+ percent FPL households boost the price of the cheapest plans too high, tax penalties built into the law for those without public or private coverage won’t provide incentive for these individuals to purchase coverage.  The PPACA’s individual mandate expressly exempts those who have to spend more than eight percent of their incomes to purchase the cheapest bronze plan offered in their geographic rating region. The law also provides for a financial hardship exemption.

Because of the sheer size of the Boomer demographic and Boomers’ willingness to seek political redress of their grievances, if the premium increases for the 401 percenters predicted indirectly by the Society of Actuaries and directly by Milliman materialize, it could create impetus for further reforms in 2014.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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