A slate of new provisions of the Patient Protection and Affordable Care Act (ACA) will arrive Jan. 1. Along with significant insurance reform, the act promises to extend health insurance to millions by providing affordable options through Medicaid and new health insurance exchanges.
Will the practicing psychologist see an influx of patients in 2014? The answer depends in large part on how well these programs are implemented in the states.
Health insurance exchanges
The nonpartisan Congressional Budget Office (CBO) estimates that 55 million non-elderly Americans are currently uninsured. In 2014, the law affords some the opportunity to purchase coverage through on-line state insurance exchanges (also called marketplaces). To increase competition and lower premiums, the exchanges will offer plans with federal subsidies for those with modified adjusted gross incomes below 400 percent of the Federal Poverty Level (FPL), which is about $46,000 for an individual and $94,000 for a family of four.
Each state was encouraged to create its own exchange and 16 have agreed to do so. Another seven are working under a partnership agreement with the federal government. The remaining 27 are allowing the federal government to establish marketplaces. For all exchanges, enrollment opens Oct 1. for coverage starting Jan. 1.
Those with pre-existing conditions can no longer be denied coverage or forced to pay higher premiums than their healthier peers. To offset the expense of health care services for this population, the administration estimates the exchanges need to enroll 2.7 million healthy 18- to 35-year-olds. Without these younger participants, covered individuals will likely see premiums increase.
Some have concerns that younger people may not purchase coverage — the penalty for opting out is much lower than the expense of insurance premiums.
That troubles Kristie Arslan, president of the National Association of Self-Employed. “If they don’t get the ratio that they need in the state-based exchanges, it’s going to be like high-risk pools,” she said. “They’re going to be very unaffordable, because you’ll have all sick people and no healthy people.”
To avoid such an outcome, the administration has launched an extensive enrollment campaign, using some of the advisors that successfully engaged young voters in 2008. In particular, the efforts will micro-target young non-Caucasian males in California, Texas and Florida.
Premium support concern
To entice states to create their own exchanges, the ACA provides federal premium subsidies only for people buying insurance in state-based exchanges. In 2011, the IRS extended the subsidies to residents in states with federally operated exchanges. However, this ruling is now the subject of litigation by the state of Oklahoma as well as several small businesses and individuals.
“(The administration is) using the IRS to push through provisions that Congress did not pass,” Oklahoma Attorney General Scott Pruitt claimed.
To the 27 states with federally run exchanges, add the seven states operating in a partnership agreement (considered federal exchanges for subsidy determination). If plaintiffs prevail against the IRS ruling, residents in 34 states may not be granted premium subsidies and thus many may find coverage unaffordable. The ACA allows such individuals an exemption from the mandate to purchase health insurance.
The ACA required states to expand Medicaid rolls or lose federal contributions to existing programs. Coverage was to include those with incomes at or below 138 percent of the FPL. In 2012 the Supreme Court ruled that states can opt out of Medicaid expansion without penalty, and to date 21 states have decided to maintain current Medicaid rolls while six remain undecided.
According to the American Public Health Association, only those at or above the FPL (currently $11,490 for an individual and $23,550 for a family of four) may participate in the insurance marketplaces: “In states that don’t expand Medicaid, individuals with incomes above their state’s current eligibility level, but below 100 percent FPL, will not qualify for anything.”
States may expand their rolls in the future, but Bee Moorhead, executive director of pro-expansion group Texas Impact, notes that for 2014, “a lot of people will come in, file applications* and find they are not eligible for help because they are too poor.”
Of course, psychologists won’t see many more patients if they don’t participate in the provider networks for the exchange plans. While much is at present unknown about the plans to be rolled out in the fall, Lisa Goldstein, a Moody’s Investors Service analyst, expects many to offer so-called “narrow networks” in which insurance companies negotiate rates with a smaller group of providers in return for an expected increase in patients. Rate reductions allow companies to be competitive in offering participants lower premiums.
Katie Dageforde of the Tennessee Medical Association recommends that providers manage their patient populations well in preparation for possible rate decreases. “Physicians should strive to maintain the right blend of government-funded, self-insured and commercially insured patients.”
Can the law be improved?
The CBO estimates that over the next nine years, fewer people will be covered by Medicaid and more will obtain coverage through the exchanges. However, it also estimates that the number of uninsured will not drop below 30 million through 2023.
Drew Altman of the Kaiser Family Foundation anticipates improvements to the law over time. “There is no doubt states will make adjustments as implementation proceeds and they learn what is working — and what is not — in their exchanges and Medicaid expansions,” he writes. But, he adds, “This will not happen overnight.”
Dana Beezley-Smith, Ph.D., is a clinical psychologist in private practice treating children, adults, and families in Green, Ohio. She may be reached at drdana at me.com.