Obamacare Presents Complex Choices for People with Disabilities

by Eric Whitney, CPR
Reprinted, in part, with permission by www.kaiserhealthnews.org.

The Affordable Care Act has set new standards – called essential health benefits  — outlining what health insurance companies must now cover. But there’s a catch: Insurance firms can still pick and choose to some degree which therapies they’ll cover within some categories of benefit. And the way insurers interpret the rules could turn out to be a big deal for people with disabilities who need ongoing therapy to improve their day-to-day lives.

Health economist Lisa Clemans-Cope with the Urban Institute says, “You’re much more likely to find these benefits in a plan in the individual market [starting in 2014] than you would be.” This is because habilitative services are included within the 10 categories of essential health benefits the ACA will require in those new plans. Still, while some categories are straightforward, such as maternity care and preventive care, the category including habilitative services leaves more room for interpretation. For instance, insurers could choose to cover physical therapy for someone with a broken bone, but not cover long-term support services for chronic conditions, such as speech therapy for kids with developmental delays.

Clemans-Cope says some insurers may arrange their benefits in a way that discourages people with expensive chronic conditions from signing up with them. And, she says, people who want to have therapies covered are going to have to slog through some fine print to figure out if they’ll actually benefit from a particular policy. (The new policies will start to go on sale this fall and go into effect beginning Jan. 1, 2014.)  This is a big improvement, but we should emphasize that it’s not totally fixed. And people are really going to have to get help to decide which plans cover the benefits they need, she said.

Whether a person will be able to get the new therapy benefits also depends on where they live. The level of benefits insurers have to provide in each category is based on a model policy in each state, and some of those model policies are a lot more generous than others. Jill Tappert, an activist in Colorado for people with disabilities, says a lot of details still need to be sorted out before she’ll be able to say whether the health care law has improved things much.  I certainly hope the way the Affordable Care Act is implemented is a game changer for people in the disabilities community. It can be, says Tappert, who spent years fighting for habilitative service coverage for her daughter who has autism.  The opportunity is there for policy makers to vastly improve lives.

The Top 10 Medical Services Plans That Don’t Cover

TopTenA report by HealthPocket finds significant consistency in the health care services that individual and family health insurance carriers don’t cover. The following are the top 10:
1. 98% don’t cover long-term care.
2. 98% don’t cover cosmetic surgery.
3. 94% don’t cover infertility treatment.
4. 93% don’t cover weight loss programs.
5. 92% don’t cover private nursing.
6. 92% don’t cover acupuncture.
7. 92% don’t cover children’s dental check-ups.
8. 90% don’t cover weight loss surgery.
9. 87% don’t cover children’s eyeglasses.
10. 81% don’t cover adult dental services.

The Essential Health Benefits under the Affordable Care Act (ACA or Obamacare) will improve access to children’s dental check-up and children’s eyeglasses.

Weight management programs and weight loss surgery are routinely not covered in the health insurance market even though one third of U.S. adults are obese. ACA requirements will ensure coverage of weight loss diagnosis and counseling, but insurers may continue to refuse payment for surgical interventions and enrollment in third party programs, such as Weight Watchers.The exclusion of insurance coverage for infertility treatments can make the procedures inaccessible for many Americans. The average cost of a treatment cycle is $12,400, and multiple cycles are often needed for success.

Since most of the medical service exclusions within the Top 10 list can continue after the implementation of health reform, it is vital that consumers  examine their benefit coverage options closely when they shop for health insurance this October, says Kev Coleman, head of Research and Data at HealthPocket. In addition, coverage for hospital deliveries (67%) as well as prenatal and postnatal care (64%) are frequently excluded services. These medical procedures, which are included in the Essential Health Benefits, will get greater coverage because of the ACA.

HHS Issues Final Rule on Essential Benefits

The Dept. of Health and Human Services (HHS) issued a final rule that implements five key consumer protections from the Affordable Care Act:
• Guaranteed Availability – Nearly all health insurance companies offering coverage to individuals and employers must sell health insurance policies to all consumers. No one can be denied health insurance because of a current or previous illness.
• Fair Health Insurance Premiums – Health insurance companies that offer coverage to individuals and small employers will only be allowed to vary premiums based on age, tobacco use, family size, and geography. Factors that are no longer permitted in 2014 include health status, past insurance claims, gender, occupation, how long an individual has held a policy, or size of the small employer.
• Guaranteed Renewability – Health insurance companies will no longer be able to refuse to renew coverage because an individual or an employee has become sick.
• Single Risk Pool – Health insurance companies will no longer be able to charge higher premiums by moving higher-cost enrollees into separate risk pools.  Insurers must maintain a single statewide risk pool for the individual market and single statewide risk pool for the small group market.
 Catastrophic Plans – Young adults and people for whom coverage would otherwise be unaffordable will have access to a catastrophic plan in the individual market. Catastrophic plans will generally  have lower premiums, protect against high out-of-pocket costs, and cover recommended preventive services without cost sharing.

For more information visit: http://cciio.cms.gov/resources/factsheets/marketreforms-2-22-2013.html

America’s Health Insurance Plans (AHIP) issued a statement warning that the imposition of richer benefit packages will result in less affordable coverage for small employers, individuals and families by forcing them to buy up to coverage they may not want or need. AHIP noted that Jonathan Gruber, a prominent health economist and policy expert, says that a 10% rise in the cost of the Essential Health Benefits package would increase the federal government’s cost by 14.5%, or $67 billion, and reduce the rate of the insured by 4.5%, or 1.5 million, through 2019.

Many state departments of insurance and state exchange boards have begun requesting formal actuarial and economic forecasts of the effect of the ACA insurance reforms on their state. These independent studies have found that some provisions, including the Essential-Health Benefits and actuarial value requirements, will result in higher premiums.

AHIP is also concerned that the ACA requires the HHS Secretary to ensure that benefits under the Essential Health Benefits package be equal to what’s provided under a “typical employer plan.” While the term “typical employer plan” is not explicitly defined in the statute, it is vitally important for the benefit package be comparable to benefits purchased by small employers since small businesses and individuals will be the primary customers of exchange plan coverage.

AHIP notes that research has shown that workers and families who get health insurance coverage in the individual and small group markets are especially price sensitive. They tend to pay a larger share of the premium. A benefit package that’s modeled after coverage offered by very large employers would significantly increase premiums for small employers and families, thereby making coverage less affordable.

Under the ACA, most individuals will be required to have insurance at least equal to the “bronze” level of coverage. There is evidence to suggest that the minimum actuarial value of 60% may exceed the average value of a policy in a state’s market, particularly for individually purchased plans. For example, the non-partisan Congressional Budget Office (CBO) estimates that the average actuarial value of health insurance in the individual market ranges from 55%to 60%.

Also, researchers have found that the average actuarial value for non-group policies purchased in California was 55% (with a range of 32% to 85%. The California Healthcare Foundation has found that 62% of the 32 individual market plans available in Los Angeles County had actuarial values below the 60% minimum required under the ACA.

AHIP says that lowering the actuarial value for bronze coverage to 55% or 50% could help avoid disruptions in coverage and ensure that premiums stay affordable, especially for price-sensitive, younger individuals who get coverage in the non-group market. Also, policies that help ensure that younger, healthier subscribers remain in the marketplace can help promote a more stable risk pool and make coverage more affordable for everyone.

The ACA establishes limits on deductibles for health insurance plans in the small group market at $2,000 for individuals and $4,000 for families—effective January 1, 2014. In order to meet these new limits, many small group plans, particularly high-deductible/HSA plans, would have to lower deductibles substantially, thereby increasing the cost of coverage. By requiring many plans to lower deductibles, these caps could price many small employers out of the market and limit access to affordable coverage options for small business workers and their families. These caps could be especially problematic for small business employees who enroll in high-deductible/HSA plans—where the average deductible for single coverage ($2,814 in 2010) already exceeds the ACA limits. Eliminating these caps on deductibles can help ensure that affordable health insurance options are available to workers and their families and that small businesses can continue to offer coverage to their employees.

The ACA states that the HHS Secretary “may” include the amount of the annual employer HSA contributions toward the actuarial value calculation. However, in a bulletin issued in February 2012, HHS declared its intention to only include a portion of employer HSA contributions when determining actuarial value. AHIP says that including employer HSA contributions in the actuarial value calculation significantly increases the likelihood that HSA plans will be able to meet the minimum requirement and will help ensure that consumers continue to have access to high-quality, affordable coverage.

AHIP notes that total enrollment in HSA/HDHPs has grown to 13.5 million people (increasing by 2.2 million over the past year alone). Counting all employer contributions toward the HSA/HDHP actuarial value would help ensure that these affordable products remain available to businesses and their workers.

AHIP offers the following recommendations:
• Make the scope of the Essential Health Benefits comparable to the scope of benefits provided under a typical plan purchased by small businesses.
• Lower the minimum actuarial value for health insurance coverage under the ACA to ensure availability of affordable health insurance options and avoid disruptions in coverage.
• Eliminate caps on deductibles in the small group market to ensure affordability of coverage for small businesses and families.
• Require that all employer contributions toward employees’ health savings accounts (HSAs) are considered when determining a plan’s actuarial value.

For more information, visit www.ahip.org.

Essential Benefits Set the Standard for Health Coverage in California

California lawmakers have sent two identical bills (SB 951 and AB 1453) to the governor to sign. The bills identify essential health benefits for individuals and small businesses starting in 2014. The benefits will apply to insurance plans sold through the state’s new health insurance exchange, which will offer federally subsidized plans for individuals and families who earn between 138% and 400% of the federal poverty level. Plans sold outside of the exchange must also meet these requirements.

The federal government has required essential health benefits to include services within 10 broad categories. States have the flexibility to refine those broad categories by choosing an existing health care plan that will serve as a benchmark come 2014. California has chosen the Kaiser HMO $30 deductible plan as its benchmark, according to a blog post by Emily Bazar of the California Health Foundation Center for Health Reporting.

According to a legislative analysis of SB 951, after January 1, 2014, any individual and small group health insurance plan that is sold or renewed in the state must include coverage for essential health benefits. Plans would have to include the same benefits and services that are covered by the Kaiser HMO $30 deductible plan. Essential benefits include the following:

• Mental health and substance abuse services will be covered in compliance with the Mental Health Parity and Addiction Equity Act of 2008.
• Pediatric vision care will be offered with the same benefits covered under the Federal Employees Dental and Vision Insurance Program.
• Pediatric oral care will be covered with the same benefits covered under Healthy Families including medically necessary orthodontic care.
• Habilitative services will be covered under the same terms and conditions that apply to rehabilitative services. The word “habilitative” has been at the heart of health insurance coverage denials for children with autism, according to Michele Winchester, JD of Institute for Health Law and Ethics.  Insurers describe habilitative services as educational or long-term care services, which are are not covered. Covered rehabilitative services treat conditions that result of an injury or illness.“Health insurers typically …deny coverage for behavioral therapies since the care is not rehabilitative,” she said. Examples of habilitative programs include supported employment and day services for adults. Federal Medicaid law says that habilitative services help people acquire, retain, and improve the skills to live successfully in home- and community-based settings. In contrast, “rehabilitative” services reduce a disability and restore a person to their best possible functional level. .

Last Updated 09/22/2021

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