Mission Valley residents prepare for Affordable Care Act implementation
Hey savvy news reader! Thanks for choosing local.
You are now reading
1 of 3 free articles.
LAKE COUNTY – The implementation of the Affordable Care Act, also known as Obamacare, has been a bumpy transition for individuals and business owners trying to navigate the massive overhaul of America’s healthcare system. Although the change has not been seamless, healthcare officials say the plan will save millions of dollars for the state of Montana, Indian Health Services, and Lake County hospitals. “It’s an imperfect attempt to try to improve the system, but it’s a step forward,” said Jesse Laslovich, chief legal counsel to Montana’s commissioner of Securities and Insurance Monica Lindeen. Lindeen’s office is responsible for monitoring the implementation of the new health care law.
Because of the overhaul, every man, woman, and child, with a few exceptions, will have to have some form of health insurance or face a tax penalty. At the crux of the individual requirement for insurance is the idea that the uninsured often end up in the emergency room where health providers are required to treat patients regardless of whether they are able to afford treatment or not.
Uncompensated and charity care costs total about $2 million each year for St. Luke Community Hospital in Ronan, CEO Steve Todd said.
“Those costs do get passed on,” Todd said. “The fact is that when that amount of money isn’t paid for in the system, it has to be paid for by somebody.”
The costs at St. Joseph’s Medical Center in Polson have also skyrocketed over the past three years, according to CEO James Kiser.
“It’s becoming an unsustainable model to deliver care,” Kiser said. “This time last year, we had about half a million bucks worth of charity care … Our charity care this year is at $1.3 million, a 127 percent increase over last year.”
With the insurance requirement in place, Todd and Kiser hope the costs of uncompensated care will go down. Instead of ending up in the emergency room, patients will be able to seek preventative care, which must be provided free of charge under the new law.
“The imperative is getting good primary care services to prevent the downstream catastrophic costs,” Todd said.
Both Todd and Kiser said they have seen data that indicates the implementation of the Affordable Care Act will result in healthcare costs rising more slowly.
The overall impact of the new healthcare law will be that an estimated 160,000 of the 195,000 uninsured in Montana will be eligible for coverage.
The impact on non-tribal individals
Under the law, individuals are required to have health insurance. Policies, once made available on an individual basis determined by a person’s health history, now must be uniform for everyone based on two criteria: age and whether or not the person smokes. Beginning Jan. 1, 2014, insurance companies cannot deny coverage to people who have pre-existing conditions. Insurance companies can no longer randomly cancel coverage or impose lifetime limits on costs covered. All insurance policies have to offer access to 10 essential elements of care that include: ambulatory patient services; emergency services; hospitalization; 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 and wellness services and chronic disease management; and pediatric services.
Policies that do not include these services that were not in place before 2010 are not considered “grandfathered” and will cease to exist as of Jan. 1, Laslovich said. This explains why some local people at an October health forum hosted by the Lake County Democrats reported their insurance companies sent them a letter saying their coverage would be dropped.
“They aren’t allowed to offer those contracts anymore,” Laslovich said.
Insurance companies also have to spend 80 percent of their revenue on provider costs, or policy holders will receive a rebate, Laslovich said. Each year, companies will have an open enrollment period from October until December, when people can sign up for insurance.
For individuals currently enrolled in Medicare, Medicaid, Tricare, veteran’s health plans, the Children’s Health Insurance Plan, or employer-based insurance that is deemed “affordable,” no action is necessary to meet the qualifications of enrollment to avoid the tax fines that will be imposed beginning in 2014.
Employer-based plans are deemed “affordable” if the cost of insurance is no more than 9.5 percent of an individual’s monthly income. If the employer offers insurance that is not “affordable,” employees are eligible to shop in the Marketplace, the federal healthcare exchange.
The Office of Securities and Insurance wanted the Montana Legislature to set up a state exchange in the 2013 legislative session, but the endeavor was not successful, Laslovich said.
“We thought we could do a much better job (than the federal government),” he said.
The lack of a state-based exchange means Montanan’s must shop on the federal Marketplace, which has suffered many problems during its rollout that resulted in Congressional hearings.
Three Montana companies, BlueCross BlueShield, PacificSource, and The Montana Health Co-op are available to choose from in the Marketplace, and compare rates.
“You need to be in the marketplace because it’s the only place where you are going to be eligible for the tax credits,” Laslovich said.
Tax subsidies, that can be applied when filing taxes or sent directly to the insurance companies, are available to people with a household income that is 100 percent to 400 percent of the federal poverty level, that varies depending on household size. The subsidies can lower the monthly costs of health insurance to nothing, in some cases.
Many uninsured Montanans will not be eligible to shop in the Marketplace because they fall below the federal poverty line. Under the Affordable Care Act, the federal government planned to expand Medicaid to cover these low-income individuals. The Supreme Court ruled that expanding Medicaid should be left to the discretion of individual states. Repeated attempts to expand Medicaid in Montana failed in 2009, 2011, and 2013.
As a result, approximately 35,000 of the state’s lowest income residents will still not have access to insurance under the new law. Laslovich was not optimistic a ballot initiative in 2014 would be successful in expanding Medicaid and predicted the matter would come before the legislature again in 2015.
The economic impact of not expanding Medicaid totals $6.8 billion over the course of eight years, Laslovich said.
“It’s $6.8 billion we turned our backs on,” Laslovich said.
Children and spouses of individuals who are not covered under health insurance benefits by the policies of their spouses or parents that are deemed “affordable,” also will not be eligible to shop in the Marketplace.
“They said if the cost for single coverage is affordable, the whole family loses eligibility for tax credits,” said Morgan Hirschenberger, representative for PayneWest Insurance. “For example, a bus driver of a school district I work with makes about $1,500 bucks a month. The cost to her for the insurance, for her single, is $20 per month. The cost to cover her family? It’s about $1,600 bucks per month – more than she makes in a month. Her family does not qualify for tax credits.”
Hirschenberger said the law defines family as anyone who defines themselves that way on a tax return.
“It’s a problem,” Hirschenberger said. “You are incentivizing divorce.”
The St. Ignatius Town Council voted at its October meeting to expand the language of its insurance policy for employees so that a $300 monthly allowance can be applied to the insurance of the employee or their family member.
“I’m asking up to $300 for myself and my family,” police chief Jeffrey Ferguson told the council when the policy change was under consideration. “I’ve got VA insurance. My wife’s got her insurance. My kid’s got nothing. I tried to get insurance for my kid and it’s $800 a month.”
As the system grapples with how to handle these cases, Laslovich said the cost of insurance in Montana is going down because the state is now required to review prices and see if they are acceptable.
“We have state-based rate review for the first time in our state’s history, where our office will actually review health insurance rates that health insurers are seeking to impose,” Laslovich said. “This is not just in the marketplace, this is also outside of the marketplace … We do this in all other lines of business. Because of this state-based health insurance review rates have gone done.”
The state’s largest insurance provider dropped rates 7 percent, and two other providers dropped their rates by 22 and 60 percent, Laslovich said.
“It’s working,” he said.
The impact on tribal health
Enrolled members of a federal tribe will not have to pay a fine if they do not enroll in an insurance program. Tribal descendants that qualify for healthcare provided by Indian Health Services or Tribal Health Services can also be exempt from paying fines if they apply for an exemption online. Unlike non-tribal members, enrollment periods for insurance never close for Native Americans.
For tribal members who chose to enroll in an insurance program and have a yearly income that is no more than 300 percent of the poverty level, there are no co-pays or deductibles. If the member receives health care from Indian Health Services, they do not have to pay out of pocket expenses.
When Native Americans enroll, it benefits the entire tribal health system, said Gary Neumann, Salish representative for the Montana Health Co-op.
“Tribal health on the reservation has a certain amount of money it gets every year to provide health care,” Neumann said. “That money gets used up at the first part of the year and there’s waiting lists for surgeries … If people sign up and use those services, a lot of those services will be third party billed and the tribe will get to keep that money. If you able to keep $12 million per year, you can look at other places to spend that – maybe pediatrics, maybe dentistry, maybe vision for adults … There’s a potential, nationally, to bring $4 billion dollars back to Indian Health Services each year by people signing up through the Affordable Care Act. That’s huge.”
Neumann said most of Montana’s 20,000 uninsured Native Americans live in the northwestern part of the state. He said by enrolling, members might be able to buck negative perceptions about tribal members that end up in the state’s emergencies rooms.
“If hospitals see a bunch of Native Americans coming in the emergency room, using up all of their charity dollars and things like that or if maybe they’ve used too much and there’s maybe a million dollars (the hospital) has had to write off, they probably aren’t going to provide the best service when they see a Native American American,” Neumann said. “This has the potential to stop that.”
Taking advantage of the benefits of Affordable Care Act means change for many on the Flathead Reservation.
“As a Native American who is from this reservation, I’ve never had to worry about or think about health insurance. I’ve just had to go to work and check the box that I wanted, and I get it,” Neumann said. “That’s not the case anymore. We have to become educated about healthcare and what the options are and how it affects our lives, our children, our grandchildren so we can make a better informed decision.”
The impact on businesses
For small businesses with fewer than 50 employees, the impact of the Affordable Care Act will be minimal, said Rick Yearry, chief external affairs officer for the Montana Health Co-op.
“For small business owners with less than 50 employees, they can move all of their staff over to the exchange with no tax penalties,” Yearry said. “They are free, basically, to do whatever they want. They can keep buying small group insurance like they do today or they can send their staff to the exchange.”
Small businesses can buy group insurance on a separate exchange, called the SHOP exchange. If the business has fewer than 25 employees and those employees make an average annual salary of less than $50,000, they can get tax credits on premiums.
Beginning in 2014, employers with more than 50 employees have to provide full and comprehensive coverage to employees or face a tax penalty.
Each business has to evaluate their situation individually, Yearry said.
“This is what we tell everyone: You’ve got to evaluate this by what is going to be best for you,” Yearry said.
Caution for all
As if a massive healthcare overhaul didn’t have enough of a learning curveball to throw at consumers, they have also had to learn to contend with a constant stream of misinformation, Laslovich said.
“There’s a lot of misinformation,” Laslovich said. “I just read in the paper today that there are death panels because of the Affordable Care Act. I’m here to tell you that is false. There are no death panels.”
He recommends visiting montanahealthanswers.com, a website sponsored by the Office of Securities and Insurance to find non-partisan answers about the new law.
Crooks are also taking advantage of confused consumers by setting up fake websites and calling services.
“If it doesn’t end in .gov then don’t put your information in it,” Laslovich said. “What’s happening is that these sites are popping up saying this is for Obamacare, or healthcare.com and people are trying to get your social security information and your account information. It is fraud. Similarly people are calling you, saying ‘It’s Oct.1. Obamacare’s in effect. Can I have your social security number, account number?’ Again, it’s fraud. Healthcare.gov is the only place besides the insurance company website (to buy health insurance).”
