Key Features of the Affordable Care Act
On March 23, 2010, President Obama signed the Affordable Care Act. The law puts in place comprehensive health insurance reforms that will roll out over four years and beyond.
The Affordable Care Act is the official name of the legislation driving the policies and regulations for health insurance. The plan it outlines has other names attached to it in public media, political platforms and other non-legal venues. Alternative names used to describe the Affordable Care Act include:
- Affordable health care
- Healthcare reform
OVERVIEW OF THE HEALTH CARE LAW
2010: A new Patient’s Bill of Rights goes into effect, protecting consumers from the worst abuses of the insurance industry. Cost-free preventive services begin for many Americans.
2011: People with Medicare can get key preventive services for free, and also receive a 50% discount on brand-name drugs in the Medicare “donut hole.”
2012: Accountable Care Organizations and other programs help doctors and health care providers work together to deliver better care.
2013: Open enrollment in the Health Insurance Marketplace began on October 1st.
2014: All Americans will have access to affordable health insurance options. The Marketplace allows individuals and small businesses to compare health plans on a level playing field. Middle and low-income families will get tax credits that cover a significant portion of the cost of coverage. And the Medicaid program will be expanded to cover more low-income Americans. All together, these reforms mean that millions of people who were previously uninsured will gain coverage, thanks to the Affordable Care Act.
2010 NEW CONSUMER PROTECTIONS
- Putting Information for Consumers Online. The law provides for where consumers can compare health insurance coverage options and pick the coverage that works for them. Effective July 1, 2010.
- Prohibiting Denying Coverage of Children Based on Pre-Existing Conditions. The health care law includes new rules to prevent insurance companies from denying coverage to children under the age of 19 due to a pre-existing condition. Effective for health plan years beginning on or after September 23, 2010 for new plans and existing group plans.
- Prohibiting Insurance Companies from Rescinding Coverage. In the past, insurance companies could search for an error, or other technical mistake, on a customer’s application and use this error to deny payment for services when he or she got sick. The health care law makes this illegal. After media reports cited incidents of breast cancer patients losing coverage, insurance companies agreed to end this practice immediately. Effective for health plan years beginning on or after September 23, 2010.
- Eliminating Lifetime Limits on Insurance Coverage. Under the law, insurance companies will be prohibited from imposing lifetime dollar limits on essential benefits, like hospital stays. Effective for health plan years beginning on or after September 23, 2010.
- Regulating Annual Limits on Insurance Coverage. Under the law, insurance companies’ use of annual dollar limits on the amount of insurance coverage a patient may receive will be restricted for new plans in the individual market and all group plans. In 2014, the use of annual dollar limits on essential benefits like hospital stays will be banned for new plans in the individual market and all group plans. Effective for health plan years beginning on or after September 23, 2010.
- Appealing Insurance Company Decisions. The law provides consumers with a way to appeal coverage determinations or claims to their insurance company, and establishes an external review process. Effective for new plans beginning on or after September 23, 2010.
- Establishing Consumer Assistance Programs in the States. Under the law, states that apply receive federal grants to help set up or expand independent offices to help consumers navigate the private health insurance system. These programs help consumers file complaints and appeals; enroll in health coverage; and get educated about their rights and responsibilities in group health plans or individual health insurance policies. The programs will also collect data on the types of problems consumers have, and file reports with the U.S. Department of Health and Human Services to identify trouble spots that need further oversight. Grants Awarded October 2010.
IMPROVING QUALITY AND LOWERING COSTS
- Providing Small Business Health Insurance Tax Credits. Up to 4 million small businesses are eligible for tax credits to help them provide insurance benefits to their workers. The first phase of this provision provides a credit worth up to 35% of the employer’s contribution to the employees’ health insurance. Small non-profit organizations may receive up to a 25% credit. Effective now.
- Offering Relief for 4 Million Seniors Who Hit the Medicare Prescription Drug “Donut Hole.” An estimated four million seniors will reach the gap in Medicare prescription drug coverage known as the “donut hole” this year. Each eligible senior will receive a one-time, tax free $250 rebate check. First checks mailed in June, 2010, and will continue monthly throughout 2010 as seniors hit the coverage gap.
- Providing Free Preventive Care. All new plans must cover certain preventive services such as mammograms and colonoscopies without charging a deductible, co-pay or coinsurance. Effective for health plan years beginning on or after September 23, 2010.
- Preventing Disease and Illness. A new $15 billion Prevention and Public Health Fund will invest in proven prevention and public health programs that can help keep Americans healthy – from smoking cessation to combating obesity. Funding begins in 2010.
- Cracking Down on Health Care Fraud. Current efforts to fight fraud have returned more than $2.5 billion to the Medicare Trust Fund in fiscal year 2009 alone. The new law invests new resources and requires new screening procedures for health care providers to boost these efforts and reduce fraud and waste in Medicare, Medicaid, and CHIP. Many provisions effective now.
INCREASING ACCESS TO AFFORDABLE CARE
- Providing Access to Insurance for Uninsured Americans with Pre-Existing Conditions. The Pre-Existing Condition Insurance Plan provides new coverage options to individuals who have been uninsured for at least six months because of a pre-existing condition. States have the option of running this program in their state. If a state chooses not to do so, a plan will be established by the Department of Health and Human Services in that state. National program effective July 1, 2010.
- Extending Coverage for Young Adults. Under the law, young adults will be allowed to stay on their parents’ plan until they turn 26 years old (in the case of existing group health plans, this right does not apply if the young adult is offered insurance at work). Check with your insurance company or employer to see if you qualify. Effective for health plan years beginning on or after September 23.
- Expanding Coverage for Early Retirees. Too often, Americans who retire without employer-sponsored insurance and before they are eligible for Medicare see their life savings disappear because of high rates in the individual market. To preserve employer coverage for early retirees until more affordable coverage is available through the new Exchanges by 2014, the new law creates a $5 billion program to provide needed financial help for employment-based plans to continue to provide valuable coverage to people who retire between the ages of 55 and 65, as well as their spouses and dependents. Applications for employers to participate in the program available June 1, 2010. For more information on the Early Retiree Reinsurance Program, visit www.ERRP.gov.
- Rebuilding the Primary Care Workforce. To strengthen the availability of primary care, there are new incentives in the law to expand the number of primary care doctors, nurses and physician assistants. These include funding for scholarships and loan repayments for primary care doctors and nurses working in underserved areas. Doctors and nurses receiving payments made under any state loan repayment or loan forgiveness program intended to increase the availability of health care services in underserved or health professional shortage areas will not have to pay taxes on those payments. Effective 2010 .
- Holding Insurance Companies Accountable for Unreasonable Rate Hikes. The law allows states that have, or plan to implement, measures that require insurance companies to justify their premium increases will be eligible for $250 million in new grants. Insurance companies with excessive or unjustified premium exchanges may not be able to participate in the new health insurance Exchanges in 2014. Grants awarded beginning in 2010.
- Allowing States to Cover More People on Medicaid. States will be able to receive federal matching funds for covering some additional low-income individuals and families under Medicaid for whom federal funds were not previously available. This will make it easier for states that choose to do so to cover more of their residents. Effective April 1, 2010.
- Increasing Payments for Rural Health Care Providers. Today, 68% of medically underserved communities across the nation are in rural areas. These communities often have trouble attracting and retaining medical professionals. The law provides increased payment to rural health care providers to help them continue to serve their communities. Effective 2010.
- Strengthening Community Health Centers. The law includes new funding to support the construction of and expand services at community health centers, allowing these centers to serve some 20 million new patients across the country. Effective 2010.
2011 : IMPROVING QUALITY AND LOWERING COSTS
- Offering Prescription Drug Discounts. Seniors who reach the coverage gap will receive a 50% discount when buying Medicare Part D covered brand-name prescription drugs. Over the next ten years, seniors will receive additional savings on brand-name and generic drugs until the coverage gap is closed in 2020. Effective January 1, 2011.
- Providing Free Preventive Care for Seniors. The law provides certain free preventive services, such as annual wellness visits and personalized prevention plans for seniors on Medicare. Effective January 1, 2011.
- Improving Health Care Quality and Efficiency. The law establishes a new Center for Medicare & Medicaid Innovation that will begin testing new ways of delivering care to patients. These methods are expected to improve the quality of care, and reduce the rate of growth in health care costs for Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). Additionally, by January 1, 2011, HHS will submit a national strategy for quality improvement in health care, including by these programs. Effective no later than January 1, 2011.
- Improving Care for Seniors After They Leave the Hospital. The Community Care Transitions Program will help high risk Medicare beneficiaries who are hospitalized avoid unnecessary readmissions by coordinating care and connecting patients to services in their communities. Effective January 1, 2011.
- Introducing New Innovations to Bring Down Costs. The Independent Payment Advisory Board will begin operations to develop and submit proposals to Congress and the President aimed at extending the life of the Medicare Trust Fund. The Board is expected to focus on ways to target waste in the system, and recommend ways to reduce costs, improve health outcomes for patients, and expand access to high-quality care. Administrative funding becomes available October 1, 2011. INCREASING ACCESS TO AFFORDABLE CARE
- Increasing Access to Services at Home and in the Community. The Community First Choice Option allows states to offer home and community based services to disabled individuals through Medicaid rather than institutional care in nursing homes. Effective beginning October 1, 2011.
HOLDING INSURANCE COMPANIES ACCOUNTABLE
- Bringing Down Health Care Premiums. To ensure premium dollars are spent primarily on health care, the law generally requires that at least 85% of all premium dollars collected by insurance companies for large employer plans are spent on health care services and health care quality improvement. For plans sold to individuals and small employers, at least 80% of the premium must be spent on benefits and quality improvement. If insurance companies do not meet these goals, because their administrative costs or profits are too high, they must provide rebates to consumers. Effective January 1, 2011.
- Addressing Overpayments to Big Insurance Companies and Strengthening Medicare Advantage. Today, Medicare pays Medicare Advantage insurance companies over $1,000 more per person on average than is spent per person in Traditional Medicare. This results in increased premiums for all Medicare beneficiaries, including the 77% of beneficiaries who are not currently enrolled in a Medicare Advantage plan. The law levels the playing field by gradually eliminating this discrepancy. People enrolled in a Medicare Advantage plan will still receive all guaranteed Medicare benefits, and the law provides bonus payments to Medicare Advantage plans that provide high quality care. Effective January 1, 2011.
2012 : IMPROVING QUALITY AND LOWERING COSTS
- Linking Payment to Quality Outcomes. The law establishes a hospital Value-Based Purchasing program (VBP) in Traditional Medicare. This program offers financial incentives to hospitals to improve the quality of care. Hospital performance is required to be publicly reported, beginning with measures relating to heart attacks, heart failure, pneumonia, surgical care, health-care associated infections, and patients’ perception of care. Effective for payments for discharges occurring on or after October 1, 2012.
- Encouraging Integrated Health Systems. The new law provides incentives for physicians to join together to form “Accountable Care Organizations.” These groups allow doctors to better coordinate patient care and improve the quality, help prevent disease and illness and reduce unnecessary hospital admissions. If Accountable Care Organizations provide high quality care and reduce costs to the health care system, they can keep some of the money that they have helped save. Effective January 1, 2012.
- Reducing Paperwork and Administrative Costs. Health care remains one of the few industries that relies on paper records. The new law will institute a series of changes to standardize billing and requires health plans to begin adopting and implementing rules for the secure, confidential, electronic exchange of health information. Using electronic health records will reduce paperwork and administrative burdens, cut costs, reduce medical errors and most importantly, improve the quality of care. First regulation effective October 1, 2012.
- Understanding and Fighting Health Disparities. To help understand and reduce persistent health disparities, the law requires any ongoing or new federal health program to collect and report racial, ethnic and language data. The Secretary of Health and Human Services will use this data to help identify and reduce disparities. Effective March 2012.
INCREASING ACCESS TO AFFORDABLE CARE
- Providing New, Voluntary Options for Long-Term Care Insurance. The law creates a voluntary long-term care insurance program – called CLASS — to provide cash benefits to adults who become disabled. Note: On October 14, 2011, Secretary Sebelius transmitted a report and letter to Congress stating that the Department does not see a viable path forward for CLASS implementation at this time.
2013 IMPROVING QUALITY AND LOWERING COSTS
- Improving Preventive Health Coverage. To expand the number of Americans receiving preventive care, the law provides new funding to state Medicaid programs that choose to cover preventive services for patients at little or no cost. Effective January 1, 2013. Learn more about the law and preventive care.
- Expanding Authority to Bundle Payments. The law establishes a national pilot program to encourage hospitals, doctors, and other providers to work together to improve the coordination and quality of patient care. Under payment “bundling,” hospitals, doctors, and providers are paid a flat rate for an episode of care rather than the current fragmented system where each service or test or bundles of items or services are billed separately to Medicare. For example, instead of a surgical procedure generating multiple claims from multiple providers, the entire team is compensated with a “bundled” payment that provides incentives to deliver health care services more efficiently while maintaining or improving quality of care. It aligns the incentives of those delivering care, and savings are shared between providers and the Medicare program. Effective no later than January 1, 2013.
INCREASING ACCESS TO AFFORDABLE CARE
- Increasing Medicaid Payments for Primary Care Doctors. As Medicaid programs and providers prepare to cover more patients in 2014, the Act requires states to pay primary care physicians no less than 100% of Medicare payment rates in 2013 and 2014 for primary care services. The increase is fully funded by the federal government. Effective January 1, 2013.
- Open Enrollment in the Health Insurance Marketplace Begins. Individuals and small businesses can buy affordable and qualified health benefit plans in this new transparent and competitive insurance marketplace. Effective October 1, 2013.
NEW CONSUMER PROTECTIONS
- Prohibiting Discrimination Due to Pre-Existing Conditions or Gender. The law implements strong reforms that prohibit insurance companies from refusing to sell coverage or renew policies because of an individual’s pre-existing conditions. Also, in the individual and small group market, the law eliminates the ability of insurance companies to charge higher rates due to gender or health status. Effective January 1, 2014.
- Eliminating Annual Limits on Insurance Coverage. The law prohibits new plans and existing group plans from imposing annual dollar limits on the amount of coverage an individual may receive. Effective January 1, 2014.
- Ensuring Coverage for Individuals Participating in Clinical Trials. Insurers will be prohibited from dropping or limiting coverage because an individual chooses to participate in a clinical trial. Applies to all clinical trials that treat cancer or other life-threatening diseases. Effective January 1, 2014.
IMPROVING QUALITY AND LOWERING COSTS
- Making Care More Affordable. Tax credits to make it easier for the middle class to afford insurance will become available for people with income between 100% and 400% of the poverty line who are not eligible for other affordable coverage. (In 2010, 400% of the poverty line comes out to about $43,000 for an individual or $88,000 for a family of four.) The tax credit is advancable, so it can lower your premium payments each month, rather than making you wait for tax time. It’s also refundable, so even moderate-income families can receive the full benefit of the credit. These individuals may also qualify for reduced cost-sharing (copayments, co-insurance, and deductibles). Effective January 1, 2014.
- Establishing the Health Insurance Marketplace. Starting in 2014 if your employer doesn’t offer insurance, you will be able to buy it directly in the Health Insurance Marketplace. Individuals and small businesses can buy affordable and qualified health benefit plans in this new transparent and competitive insurance marketplace. The Marketplace will offer you a choice of health plans that meet certain benefits and cost standards. Starting in 2014, Members of Congress will be getting their health care insurance through the Marketplace, and you will be able buy your insurance through Marketplace too. Learn more about the Health Insurance Marketplace.
- Increasing the Small Business Tax Credit. The law implements the second phase of the small business tax credit for qualified small businesses and small non-profit organizations. In this phase, the credit is up to 50% of the employer’s contribution to provide health insurance for employees. There is also up to a 35% credit for small non-profit organizations. Effective January 1, 2014.
INCREASING ACCESS TO AFFORDABLE CARE
- Increasing Access to Medicaid. Americans who earn less than 133% of the poverty level (approximately $14,000 for an individual and $29,000 for a family of four) will be eligible to enroll in Medicaid. States will receive 100% federal funding for the first three years to support this expanded coverage, phasing to 90% federal funding in subsequent years. Effective January 1, 2014.
- Promoting Individual Responsibility. Under the law, most individuals who can afford it will be required to obtain basic health insurance coverage or pay a fee to help offset the costs of caring for uninsured Americans. If affordable coverage is not available to an individual, he or she will be eligible for an exemption. Effective January 1, 2014.
IMPROVING QUALITY AND LOWERING COSTS
- Paying Physicians Based on Value Not Volume. A new provision will tie physician payments to the quality of care they provide. Physicians will see their payments modified so that those who provide higher value care will receive higher payments than those who provide lower quality care. Effective January 1, 2015.
HHS will not enforce these rules against issuers of stand-alone retiree-only plans in the private health insurance market.
Value for Your Premium Dollar: The 80/20 Rule and MLR
The Affordable Care Act requires insurance companies to spend your premium dollars primarily on health care. It does this by enforcing a policy called the “80/20 rule” to hold insurance companies accountable.
What Medical Loss Ratio (MLR) Means for You
The percentage of your premium dollars that an insurance company spends on providing you with health care and improving the quality of your care (as opposed to what it spends on administrative, overhead, and marketing costs) is known as “Medical Loss Ratio” or MLR.
The new law limits how much of your premium dollar your insurer can spend on things other than providing health care and improving its quality. If your insurance company exceeds that limit, it must provide a rebate of the portion of premium dollars that exceeded this limit.
Some Important Details
- The law requires insurers selling policies to individuals or small groups to spend at least 80% of premiums on direct medical care and efforts to improve the quality of care. Insurers selling to large groups (usually 50 or more employees) must spend 85% of premiums on care and quality improvement.
- This rule does not apply to employers who operate what is called a self-insured plan. If you’re not sure whether your plan matches this description, ask your employer or check your plan materials.
- Your health insurance company must report yearly to the Secretary of Health and Human Services on the share of premium dollars spent on health care services and quality improvement and any rebates required. The first report, covering calendar year 2011, was filed on June 1, 2012.
- Insurers are required to make the first round of rebates to consumers in 2012. If you are owed a rebate you will receive a reduction in your premiums, a rebate check–or, if you paid by credit card or debit card, a lump sum reimbursement to your account. If your employer paid all or part of your premium, the same share of any rebate may go to your employer.
Small Business Tax Credits
- The Affordable Care Act helps small businesses and small tax-exempt organizations afford the cost of covering their employees.
What This Means for You:
- If you have fewer than 25 employees and provide health insurance, you may qualify for a tax credit of up to 35% (up to 25% for non-profits) to offset the cost of your insurance. This credit will increase in 2014 to 50% (35% for non-profits). This will make the cost of providing insurance much lower.
- Claim this tax credit for your small business at IRS.gov.
Initial Insurance Enrollment
On October 1, 2013 consumers may begin to enroll in the insurance marketplace. In California, that is the date on which Covered California first permits state residents to file for competitive insurance information, re-enroll or attempt to enroll in Medi-Cal through Covered California, and shop for small business employer healthcare plans. This initial enrollment period extends through March 2014.
Enrollments completed by December 15, 2013 can expect to see healthcare coverage become available to them as of January 1, 2014. Those who enroll after December 15, 2013 and before the new year can expect coverage to begin February 1, 2014. Through March 2014, those who enroll before the 15th of the month can expect coverage to begin on the 1st of the succeeding month, while those who enroll during the second half of a month will have their coverage start on the 1st of the month after the immediately succeeding one.
Coverage Periods and Changes
Coverage gained through the initial enrollment period stands for one calendar year from date of coverage. Coverage periods which begin after March 2014 will also have a one-year duration. In later Modules in this series, we will discuss what specific circumstances might intrude on that cycle for a specific consumer or employer.
In subsequent years, open enrollment will occur October 15 – December 7.
Penalties Phased In
There are several areas in which fines will be applied for failure to access appropriate health insurance coverage. These penalties will be phased in for both individuals and employers over a number of years. At this time, planned penalties for employers are being renegotiated.
What Are the Avenues of Access to Enrollment?
There are several methods by which someone may enroll in the insurance marketplace:
- Online and in real time
- Paper form which may be
- Delivered to a relevant agency
- By telephone through a system of county consortia
- In-person visit to his or her home county Medi-Cal office counselor.
Covered California™ and the California Department of Health Care Services (DHCS) have partnered to offer a one-stop-shop online enrollment channel for millions of consumers to receive low-cost or no-cost health insurance.
Covered California’s new private health insurance marketplace offers affordable coverage for residents previously uninsured. Millions are eligible for financial assistance to help pay for coverage. This assistance includes subsidies and no-cost Medi-Cal. DHCS oversees Medi-Cal, the state’s Medicaid health care program, which covers a number of medical services for children and adults with limited income and resources.
Covered California’s online marketplace will be the single online channel where Californians can apply for both Medi-Cal and Covered California health insurance plans. It’s a “no wrong door” approach that will enable Californians to determine their eligibility for subsidized health benefits, compare insurance plan options and enroll for coverage. Covered California’s new online marketplace launches Oct. 1, 2013, to allow individuals to begin enrollment in Covered California health insurance plans and Medi-Cal. Actual coverage in Covered California’s health plans is effective January 2014.
Medi-Cal, as a health insurance program, has been covering Californians who couldn’t afford health care since 1966. Currently there are 8.5 million people enrolled. Under the Affordable Care Act (ACA), Medi-Cal coverage will expand in 2014, making one million to two million new people eligible. In recent surveys, most current individuals enrolled in Medi-Cal report having a positive experience with the program and agree that Medi-Cal provides access to high-quality care.
Beginning January 1, 2014, single adults without children, ages 19-64 will be eligible for Medi-Cal. Open enrollment for Medi-Cal coverage for these individuals begins on October 1, 2013. If they are found to be eligible, their coverage begins on January 1, 2014.
For all Medi-Cal applicants, there are new, simplified procedures for Medi-Cal eligibility that will also begin January 1, 2014. Eligibility is based upon income, as required by the ACA. To verify income and other eligibility data, we will rely on faster, more convenient electronic methods whenever possible. Medi-Cal will still accept applications and enroll individuals who qualify using today’s eligibility procedures. Periodic redetermination of eligibility for those who are enrolled will also be much simpler and will be done electronically whenever possible.
What Services Will Medi-Cal Provide for Me?
Medi-Cal covers a core set of services, including doctor visits, hospital care, and pregnancy-related services, as well as nursing home care for individuals age 21 or older. The ACA ensures all Medi-Cal health plans offer a comprehensive package of items and services, known as essential health benefits. Essential health benefits must include:
- 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 and wellness services & chronic disease management
- Pediatric services (including oral and vision care)
Starting in 2014, the array of mental health and substance-use disorder services will expand to better meet the needs of individuals eligible for Medi-Cal. All Medi-Cal beneficiaries who qualify will be able to receive the following mental health benefits through Medi-Cal Managed Care Plans and Medi-Cal Fee-For-Service:
- Individual and group mental health evaluation and treatment (psychotherapy)
- Psychological testing when clinically indicated to evaluate a mental health condition
- Outpatient services for the purposes of monitoring drug therapy
- Outpatient laboratory, drugs, supplies and supplements
- Psychiatric consultation
- Specialty mental health services currently provided by County Mental Health Plans will continue to be available.
Substance-Use Disorder Services Benefits:
- Voluntary Inpatient Detoxification
- Intensive Outpatient Treatment Services
- Residential Treatment Services
- Outpatient Drug Free Services
- Narcotic Treatment Services
Dental care, vision services and speech therapy are generally available only to children and youths under age 21, but certain adults and pregnant women are also eligible for these services. Dental services will be available to all adults starting May, 2014.
These are all services that Medi-Cal covers today and will continue to cover for current and new enrollees.
Do I Qualify for Medi-Cal?
The Medi-Cal expansion starting on January 1, 2014 will open the door for a few million more low income Californians under age 65 who are currently ineligible for coverage. To be eligible, your annual income must be lower than 138 percent of the federal poverty level (in 2013 that would mean an individual who earned less than $15,856).
The Medi-Cal expansion also allows coverage for parents who would lose coverage under current rules if their income slightly exceeds the federal poverty level.
Covered California is the new marketplace for affordable, low cost and no cost health insurance, including Medi-Cal. It’s a “no wrong door” approach that will help Californians learn their eligibility for subsidized health benefits, compare insurance plan options, and enroll to receive coverage. The online portal launched on October 1, 2013, allowing individuals to pre-enroll in the Covered California health plans and Medi-Cal prior to January 1, 2014. It’s important to note that California will also maintain existing pathways in which individuals enroll. All counties will still process applications at local county social services departments as well as accepting applications by mail. In addition, locally based enrollment assistors will be available to help.
For more information on Medi-Cal, you may visit the DHCS website at www.dhcs.ca.gov.
Criteria for Exchange Shopping Eligibility
California residents eligible to make use of the Covered California insurance exchange must fit the following criteria:
- Reside in the service area in which the application through Covered California is made
- Have status as a US citizen, national or documented non-citizen resident
- Not be currently incarcerated
Each of these criteria needs a bit of explanation and clarification.
Health care coverage, under the Affordable Care Act, is tied to geographic location. California has 19 geographic locations designated within the insurance exchange. Some insurance carriers operate only within one or some of these 19 areas. Geographic areas are tied to cost of living zones as well as to physical landforms and population size due to density. A Los Angeles resident cannot apply for coverage from a carrier who operates only in Contra Costa County. In addition, Medi-Cal operates on a county basis; a Ventura County resident cannot apply for Medi-Cal through Imperial County.
In addition to documented long-term non-citizen residents, short-term residents such as foreign exchange students, visiting scholars or others with contractual arrangements lasting more than a couple of months are eligible to enroll and purchase health insurance through the exchange. Undocumented residents are not covered through the exchange; however, they can shop outside the exchange for health care coverage (as can anyone).
Among the federal regulatory parameters governing the exchange are several related to ratios between what the insurer pays for covered services and what the insured pays to make up the difference. In Topic 5, we will discuss insurance terms and health insurance literacy, but now let’s demystify what, in the Affordable Care Act, are called “metal levels.”
In order to be designated as a qualified health insurance company to operate within the exchange, the company must abide by the ratios shown in the table below:
Insurance Plan Level
In addition, each company in the exchange must offer at least a Gold level plan and a Silver level plan.
Not all health care insurance plans are structured the same way. Each contains specific requirements for the client who expects to be covered for services provided by the plan. The four basic types of plan structure are:
Marketplace Application Checklist
When you apply for coverage in the Health Insurance Marketplace, you’ll need to provide some information about you and your household, including income, any insurance you currently have, and some additional items.
Use the checklist below to help you gather what you need to apply for coverage. Open enrollment starts October 1, 2013 for coverage starting as early as January 1, 2014. Open enrollment ends March 31, 2014.
- Social Security Numbers (or document numbers for legal immigrants)
- Employer and income information for every member of your household who needs coverage (for example, from pay stubs or W-2 forms—Wage and Tax Statements)
- Policy numbers for any current health insurance plans covering members of your household
- A completed Employer Coverage Tool (see page 2 of this checklist) for every job-based plan you or someone in your household is eligible for. (You’ll need to fill out this form even for coverage you’re eligible for but don’t enroll in.)
Visit HealthCare.gov/subscribe to get email or text updates that will help you get ready to apply.
Small Business Health Options Program (SHOP)
Covered California’s™ SHOP is a new, online health insurance marketplace developed for small businesses with one to 50 eligible* employees. There is no penalty for not enrolling in SHOP and there is no additional fee for using a certified insurance agent. Covered California is giving you the opportunity to offer your employees a full range of quality health insurance options from private insurance companies, all while making the process much easier than doing it on your own. Although not required, many small businesses choose to offer coverage to benefit their business.
*An eligible employee works an average of 30 hours per week based on a month of work. You may decide to offer coverage to part-time employees who work between 20 and 29 hours per week. Ask your Certified Insurance Agent for a complete list of eligibility guidelines.
The Small Business Health Options Program (SHOP) (www.coveredca.com/small-business/index.html) provides a formal structure through which specific employers can enter the insurance marketplace to buy health coverage for their employees. SHOP refers to both the federal program (www.healthcare.gov/small-businesses/) for small businesses and the state plan. In this module we will concentrate on the regulations of the California plan as it provides for some aspects of small business operations that the federal plan does not address.
What Qualifies as a Small Business?
To qualify as a small business employer with access to SHOP, both of the following must be true:
- The business has at least one full-time equivalent employee(s)
- The business has fewer than 51 full-time equivalent employees
For purposes of SHOP’s regulations:
- That full-time equivalent workforce may not include the owner or owners or any family members claimed as the owner’s dependents
- Sole proprietorship (www.sba.gov/content/sole-proprietorship-0) businesses are excluded–such self-employed individuals instead enter the health insurance marketplace as individuals (www.coveredca.com/individuals-and-families/index.html)
- Someone who files a 1099 is not eligible on that basis
- A business partnership composed of spouses alone does not qualify–they, too, would enter the health insurance marketplace as a family (www.coveredca.com/individuals-and-families/index.html) instead
Small-business owners know that the ability to offer employees quality health insurance is a competitive advantage in the labor market.
How SHOP will benefit your business:
- Employee Loyalty – helps you recruit and retain the best talent.
- Increase Productivity and reduce employee absenteeism
- Financial Control –You select the level of coverage you’d like to offer your employees
- Tax Advantages
- Simple Billing
How SHOP will benefit your employees:
- Employee Choice
- Agent Support in making plan decisions
- Multilingual Service Center
Covered California Certified Insurance Agents are available to help.
Covered California will operate a specific program, the Small Business Health Options Program (SHOP), that will offer new health insurance choices to small businesses and their employees. The program is designed specifically for employers with 50 and fewer eligible employees to give them unprecedented opportunities to offer a variety of health insurance planAn insurance product that is certified by a marketplace, provides Essential Health Benefits, follows established limits on cost-sharing (like deductibles, copayments and out-of-pocket maximum amounts) and meets other requirements. A Qualified Health Plan will have a certification by each marketplace in which it is sold. to their employees. Through Covered California, employers and their employees can choose the plans that fit their needs and their budgets.
Do I have to get insurance for my employees?
The new health care law, the Patient Protection and Affordable Care Act (Affordable Care Act) Patient Protection and Affordable Care ActEnacted in March 2010, the federal Patient Protection and Affordable Care Act, commonly referred to as “Obamacare,” provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The Affordable Care Act will expand access to high-quality affordable insurance and health care., does not require employers with fewer than 50 full-time-equivalent The federal government has not yet defined “full-time” or “full-time-equivalent” for purposes of determining whether a business is small or large. More information will be forthcoming in the months aheaemployees to provide health insurance for their employees. Employers with 50 full-time-equivalent employees or more that do not offer full-time-equivalent employees (and their dependents) the opportunity to enroll in minimum essential health coverage may be subject to penalties beginning in 2015.
Although employers with fewer than 50 full-time-equivalent employees will not face penalties, there are many good reasons employers choose to provide employees with health insurance. Providing health insurance to employees helps you recruit and retain the best talent. Giving employees access to health coverage can keep small health problems from turning into costly big ones. Preventing illness can reduce absenteeism and increase productivity.
What happens if I do not cover my employees?
The health care law does not require businesses to provide insurance. For businesses with fewer than 50 full-time-equivalent employees, there are no penalties for not providing health insurance. Beginning in 2015, businesses with 50 or more full-time-equivalent employees may have to pay a penalty if they do not offer minimum essential coverage to their full-time employees. Businesses with fewer than 50 full-time-equivalent employees are not subject to these penalties.
Is my business eligible for tax credits?
Businesses that provide health care coverage are eligible for tax credits if, for the tax year, they have fewer than 25 full-time-equivalent employees who are paid an average annual salary of less than $50,000. To qualify for tax credits, the employer must also contribute at least 50 percent toward the employee’s premium cost.
Employers with 10 or fewer full-time-equivalent employees paying an annual wage of $25,000 or less qualify for the maximum credit. Nonprofit or tax-exempt employers must meet the same criteria as other small businesses and their tax credits will be less.
How much is the tax credit?
The tax credit you receive as an employer will depend on a number of factors, including the number of full-time-equivalent employees and the amount you contribute to your employees’ insurance premiums. Tax credits are available in the tax year 2013 for employers with fewer than 25 full-time-equivalent employees, but these tax credits become more generous starting in 2014. These tax credits are available for a total of two consecutive years.
The table below illustrates the two phases of tax credits to help employers — including tax-exempt employers — with fewer than 25 full-time-equivalent employees cover premium costs.
The first phase covers tax years 2010-2013, and, during that time, there is a sliding-scale tax credit of up to 35 percent of the employer’s eligible premium expenses. Employers with 10 or fewer full-time-equivalent employees and paying annual average wages of $25,000 or less qualify for the maximum credit. For tax-exempt employers, the same employee and wage requirements apply, but the maximum tax credit is 25 percent of eligible premium expenses during the first phase.
The second phase begins in tax year 2014, when the maximum tax credit increases to 50 percent of premium expenses and coverage must be purchased from a state health insurance exchange. The maximum tax credit for tax-exempt employers increases to 35 percent in 2014.
If I decide to cover my employees, how does Covered California help me?
Covered California lets you easily compare and contrast a variety of health insurance plansAn insurance product that is certified by a marketplace, provides Essential Health Benefits, follows established limits on cost-sharing (like deductibxles, copayments and out-of-pocket maximum amounts) and meets other requirements. A Qualified Health Plan will have a certification by each marketplace in which it is sold. offered by private insurers that will be rated and underwritten by a new set of consumer-friendly rules. Everything you need is available online, by phone or in person. Covered California levels the playing field by giving employers access to more plans, which are all part of an insurance pool made up of small businesses in California, offering many of the advantages of large-business insurance pools. Those advantages include purchasing power, lower costs, reduced premium aThe amount that must be paid for your health insurance or plan. You and/or your employer usually pay(s) it monthly, quarterly or yearlaaa and more health insurance plan choices. Covered California will train and certify licensed health insurance agents to provide sales and enrollment support to small businesses.
Can my employees choose any health plan offered by Covered California?
Businesses that choose to work with Covered California will not sacrifice employer control. As a business owner, you will select the level of coverage you want to contribute, and, within that level, your employees can choose which health insurance plan offered through Covered California best meets their needs. In this way, Covered California is bringing together the best of employer control and employee choice.
How much would my employees pay?
Your employees can help pay part of their health insurance costs. Their share depends on the level of coverage you choose and the plan they select. As part of the Affordable Care Act, all health plans are classified into one of four categories: Bronze, Silver, Gold and Platinum. These rankings make it easy for you and your employees to compare different health plans.
As the metal category increases in value, so does the percent of medical expenses that a health plan will cover. This means the gold- and platinum-level plans will cover the highest percentage of health care expenses. These expenses are usually incurred at the time of health care services — when you visit the doctor or the emergency room, for example. The health plans that cover the greatest percentage of health care expenses also usually have higher premium payments.
As the employer, you can set the category in which your employees must choose plans, as well as determine how much you will contribute to the premium payment as either a fixed amount or as a percentage of total cost to the employees.
How much will health insurance cost me as a business owner?
The cost of health insurance to the employer will depend on the choices you make, including:
- the level of coverage – Bronze, Silver, Gold or Platinum – you want to offer employees
- the amount of premium you as the employer will contribute, which can be a set dollar amount or a percent of the premium and must meet the minimum threshold to ensure that the coverage is affordable to your employees
- any amount you may want to contribute to family or dependent care
Once you make these decisions, your employees then choose the plan that best meets their needs.
Who handles all the complicated insurance details?
Covered California will handle premium collection, enrollment and plan payments, and all other administrative tasks to make the offering for the workers’ plan choice as simple as possible for small employers. Even if your employees choose different plans, you only need to make a single payment to Covered California. Covered California will distribute that payment accordingly.
When does the program begin?
Health plan enrollment through Covered California is scheduled to open Oct. 1, 2013, for coverage that will begin in January 2014. Initially, Covered California will serve businesses that have up to 50 eligible employees. Covered California will enroll businesses with no more than 100 full-time-equivalent employees starting in October 2015 for coverage that begins in January 2016.
What if I have more than 50 employees?
If your business has more than 50 eligible employees but fewer than 101, you will be able to buy insurance through Covered California starting in October 2015 for coverage that begins in 2016. Meanwhile, you can continue to buy your health coverage in the private small- or large-group market.
What if my employees want their families covered, too?
All of the insurance plans that Covered California will offer can insure employee spouses and dependents. This generally will cost more, so you will need to decide if you want to offer this coverage or leave the decision to your employees about buying insurance for their families through the individual exchange. Under the new insurance rules that take effect in 2014, your employees and their family members who do not have coverage through your business will be able to buy insurance through Covered California or in the individual market. If they do not have insurance, they may be subject to a penalty. Depending on income level, family members might also qualify for subsidized coverage or no-cost coverage through Medi-CalMedi-CalCalifornia’s Medicaid health care program. This program provides free medical services for children and adults with limited income and resources. Your local County Welfare/Social Services Department manages Medi-Cal eligibility determinations. You can get Medi-Cal as long as you meet the eligibility requirements..
Can my insurance agent purchase coverage for me from Covered California?
California health insurance agents are expected to be an important outreach and enrollment channel for Covered California’s small-employer program, as well as for the individual market. Covered California is working closely with insurance agents to make sure they can continue to serve you in the best, most informed way possible. Insurance agents who have been certified by Covered California are able to enroll their clients through Covered California. If you are using an insurance agent now, you may continue to do so and still take advantage of health insurance offered through Covered California.
Can I purchase insurance from Covered California if I am self-employed?
Covered California’s small-business program is designed for any business with up to 50 eligible employees. You must have at least one employee other than yourself who receives a W-2 tax form at the end of the year. If you are self-employed without any employees, you are not eligible for the small-business program but should look into the individual marketplace operated by Covered California.
COVERED CALIFORNIA ANNOUNCES HEALTH INSURANCE PLANS FOR SMALL BUSINESSES
The Exchange’s Small-Group Market Will Offer Better Choice, Online Tools, Convenient Shopping and Billing, and Competitive Rates
SACRAMENTO, Calif. — Covered California™, the state’s new health benefit exchange, announced the insurance carriers and rates for its small-group market, the Small Business Health Options Program (SHOP).
While rates vary by region, Covered California SHOP premiums are generally comparable to 2013 small-group market rates and, in some cases, can save small businesses money on their premiums.
“Employer-sponsored health coverage has historically played an important role in insuring Californians, and our launch of a full-choice small-group market is a testament to the state’s commitment to build on the critical role of employer-based coverage,” said Covered California Executive Director Peter V. Lee.
California businesses with 50 or fewer employees will now be able to choose from competitively priced, quality health insurance plans similar to those usually only available to larger employers. This will allow the state’s vital small-business sector to use health coverage as leverage for recruiting and retention, while keeping employees healthy and more productive.
Covered California has selected the following health plans to participate in SHOP:
• Blue Shield of California
• Chinese Community Health Plan
• Health Net
• Kaiser Permanente
he substantive links that appeared in the Book for Module 1. Following that is a list of tools you may want to use for training or presentation purposes with other library staff.
Article 6 Draft of California Government Code Section100504 (3 September 2013) (http://www.healthexchange.ca.gov/StakeHolders/Documents/Updated%20SHOP%20Regulations%209-3-2013%20tracked%20changes.pdf) — As regulations are written to cover the variety of SHOP details, this draft can help you see where such regulations fit into California’s laws.
Commonly Asked Questions about Covered California’s SHOP (coveredca.com/small-business/small-bus-faq.html) — Fifteen questions and authoritative responses listed here address such matters as what constitutes a “small business,” tax credit eligibility, and related concerns.
Health Insurance Plans for Small Businesses (www.healthexchange.ca.gov/Documents/SHOP%20-%20press%20release%20final%20FINAL.pdf) — Covered California’s press release of 1 August 2013 includes the names of the insurance carriers approved for Covered California SHOP.
Small Business Health Options Program (SHOP) (coveredca.com/small-business/index.html
) — The landing page for California’s health insurance exchange for small businesses presents a variety of resources for detailed information.
• Sharp Health Plan
• Western Health Advantage
Small businesses are not required to enroll in Covered California’s SHOP, and there is no penalty for not participating or not providing health insurance to their employees. However, Covered California SHOP health plans will offer expanded choices, online tools for convenient shopping and enrollment, and streamlined invoicing.
Federal tax credits only available to small businesses in SHOP can make it even more affordable for some businesses with fewer than 25 full-time-equivalent employees to offer coverage to their workers.
Small-business owners may enroll in the SHOP plans when the health exchange opens Oct. 1. Like the insurance plans in Covered California’s individual market, the SHOP plans were negotiated to bring a standardized set of benefits, a robust provider network, broad choice for employers and their employees, and competitive prices to the Covered California portfolio.
The plans, a mix of health maintenance organizations (HMOs) and preferred provider organizations (PPOs), will be sold through licensed agents who are trained and certified by Covered California.
Covered California looks forward to making this choice available to California’s 500,000 small businesses, which employ more than 4.5 million workers.
“Covered California is offering plans that will encourage thousands of employers to participate, ultimately increasing the number of insured Californians, which is the mission of the landmark federal law,” Lee said.
Licensed agents will soon be able to pre-register for Covered California certification by visiting http://www.healthexchange.ca.gov. Covered California will be hosting a series of events in the coming months to familiarize agents with Covered California’s products and the certification process.
About Covered California
Covered California is the state’s marketplace for the federal Patient Protection and Affordable Care Act. Covered California was charged with creating a new health insurance marketplace in which individuals and small businesses can get access to affordable health insurance plans. With coverage starting in 2014, Covered California will help individuals compare health insurance plans and choose the plan that works best for their health needs and budget. A sliding scale of financial subsidies in the form of premium assistance will be available to help reduce costs for people who qualify. Small businesses will be able to purchase competitively priced health insurance plans and offer their employees the ability to choose from an array of plans and may qualify for federal tax credits.
Reaching Healthcare Consumers with Medi-Cal Information
The Federal government has passed to those states with state-level Medicaid programs the funding required to pay for the first three years of the Affordable Care Act’s expansion of Medicaid coverage. In California, Governor Brown’s June 2013 Budget noted these funds and their application to the Medi-Cal program, the state’s Medicaid component. During 2013-14, Medi-Cal will be extended to 1.4 million California residents, in compliance with the federal legislation.
As information evaluators and providers, public library reference staff may see multiple aspects of this change as it impacts healthcare consumers:
- Medi-Cal recipients must enroll through Covered California to establish their eligibility
- Californians who have not previously received assistance through Medi-Cal may now be eligible for such assistance
- Those already receiving assistance through county-level aid office, which includes Medi-Cal services,may be more likely to be aware of the need for enrollment than those who have not received assistance previously
- The public library, especially in communities where little has been undertaken in the way of partnerships with other public agencies in the community (besides schools) may not be on community members’ radar as a place to receive both information about and access to the Medi-Cal enrollment process
Medicaid pays for health services.
Based on your responses to our questions, you may be able to get your health coverage through Medicaid. Medicaid is a state and federal government program that provides health care for people with lower incomes. This includes some families and children, older people, and people with disabilities. It pays for services such as preventive health care, doctor and hospital visits, and some medicine.
Medicaid now covers more people.
California has decided to expand Medicaid coverage under the health care law. That means some people who didn’t have health coverage before may now be covered by Medicaid.
Enrolling in Medicaid has gotten easier.
It also is getting easier to find out if you may be able to get Medicaid. The health care law says states must provide a website so you can see if you may qualify for Medicaid. The forms you fill out will be simpler too.
The standard five-year waiting period for immigrants may be shortened.
People who aren’t citizens but who are living in the U.S. legally, sometimes called “lawfully present immigrants,” may have a shorter waiting period before they can apply for Medicaid.
Get More Information
INFORMATION FOR LIBRARIANS:
From October through December 2013, Covered California expects the arrival of documentation from 110,000 Medi-Cal applicants per month. California’s Department of Health Care Services, the government agency that plans and directs the work of Medi-Cal staff and resources, projects that these applications will arrive by the following routes:
- 55,000 will be filed through counselors, agents or county staff
- 33,000 will be handled by telephone through applicant contact with a designated call center
- 22,000 will be filed directly by applicants, either online or by mailing paper applications
- 9,800 will require applicant transfer between Covered California and the appropriate county of oversight
California is working under the guiding premise of there being “no wrong door” for healthcare coverage enrollments. What that means is that Medi-Cal clients and applicants may utilize any of the routes noted above with the expectation that they will receive the same response times and supports as they would using any of the other three avenues.
Online registration and public libraries
California residents who are–or may be–qualified to receive assistance through Medi-Cal include people with a wide range of ages, educational backgrounds, and technical literacy. A very large number, however, are unlikely to have private access to computers and connectivity sufficient for online form completion. About 20% of the pool of candidates Medi-Cal staff expects to handle on a monthly basis during the initial phase of enrollments will enter through the online or snail mail door. Given the cost of postage and the need to download a paper form if one chooses the snail mail approach, we can assume that the vast majority of this 20% will turn to filing online.
One big advantage of online enrollment in the Covered California marketplace is that applications are evaluated in real time. That means that the prospective Medi-Cal applicant–or even someone who has not considered Medi-Cal as assistance warranted by his or her situation–can complete the process in an hour and walk away knowing he or she has been accepted for enrollment and Medi-Cal benefits.
In addition to completed turn-around satisfaction, the online registrant has immediate access, if needed, to a website that is fully available in Spanish, as well as starting point information in ten other non-English languages that are used in California. The website thus offers would-be Medi-Cal applicants a measure of privacy as well as the opportunity for self-sufficiency.
Keeping politics out of the equation
In order to provide the level of service required by “no wrong door,” public library staff may find that they need to be sensitive to the needs of many different sectors of their public access computer users. Library staff need to be prepared to do two things simultaneously:
- Handle the technical aspects and right to privacy needs of those who are enrolling online
- Address other library users who may resent the extra time on the computer(s) required by those enrolling online
This provides an opportunity to train and retrain library staff in the open access ethic that is the foundation of the public institution in which they work. Choosing sides along political lines is not a worktime and workplace option. Online enrollment by a technically comfortable computer user can take an hour, so careful preplanning of allocation of the library’s public access computers is a necessity.
Raise Your Own Awareness, Raise That of Your Community
Many California residents, whether eligible for Medi-Cal or other assistance from legislated changes made by the Affordable Care Act, are unaware of the possibilities becoming available to them (www.californiahealthline.org/articles/2013/8/21/poll-75-of-calif-voters-know-little-or-nothing-about-exchange). Among the populations least aware are:
- People in good health and under 65
- Younger adults between 19 and 35 and without any current health insurance coverage
- Immigrants without prior experience with health insurance as a structure
Whether or not members of your community choose to enroll in Covered California or seek health care benefits through Medi-Cal or other assistance plans, everyone has the right to know the how’s and why’s of the Affordable Care Act. Raising your community’s awareness requires pro-active efforts, in many situations, but you are not alone. It’s never too soon to partner with county agencies, local clinics, hospitals and others who are experts in the fields most closely allied with ensuring a healthy community.
The Americans with Disabilities Act (ADA) (www.ada.gov/regs2010/titleII_2010/titleII_2010_regulations.htm) should be guiding your library’s online access to anyone seeking to enroll in any of the elements of the Affordable Care Act’s programs. We also are bound by library service ethics to provide access without regard to economic or social status. That means that when we provide public access computers for community members who are trying to enroll in any of the programs that are under the umbrella of the Affordable Care Act–insurance marketplace plans for individuals and families, SHOP for small businesses, or Medi-Cal and other financial assistance for health care–we provide it for all.
Individuals with disabilities form a large proportion of Californians eligible for Medi-Cal, and so thinking about technical access is particularly important when planning this aspect of presenting the library to the community as a resource for Affordable Care Act compliance and information.
Starting places for you to find partners in outreach include local faith based organizations and the school board. In addition, you might find good leads here:
Many adults who are eligible to apply for insurance in the initial enrollment efforts made by both federal and state governments comprise have little experience with the mechanical aspects of health insurance. In order to help your community understand the dynamics of health insurance and its relationship to health access and health care, some literacy education may need to occur.
Literacy Isn’t Just Decoding
To function independently and effectively in the United States today–and in many other parts of the world–each of us needs to call on a variety of skills that can be described as “literacies.” Among these are:
- Understanding the meaning behind written language when we face a printed label or page
- Gathering usable information from sources that supply them through auditory and visual means, separately and combined
- Mathematical skills sophisticated enough that we can recognize when to use different calculating functions
- Cultural awareness needed to make appointments and keep schedules
- Knowledge of basic rights and responsibilities as a member of our civic community that allows us to access appropriate resources when assistance is needed
- Acquaintance with such daily technologies as how to make a phone call, travel locally, store and prepare food safely, recognize hazards created by machinery with which we work, and understand that other pieces of equipment–including computer hardware or software–may assist in providing a service
The Affordable Care Act’s intent to move more people to preventive medical attention and away from emergency services is one we can better understand if we also are aware of our civic rights and responsibilities. The working definition from the Consumers Union Roundtable of experts on health insurance literacy offers a compact statement about the concern and issue:
Health insurance literacy measures the degree to which individuals have the knowledge, ability, and confidence to find and evaluate information about health plans, select the best plan for their own (or their family’s) financial and health circumstances, and use the plan once enrolled.
Health Insurance Vocabulary
In the United States, health insurance is a private enterprise, rather than a government provision. This does not change with the Affordable Care Act’s regulations. In the United States, the insurance industry is regulated by both federal and state governments, but it is not a function of government. This means that government provides the guidelines by which the companies are allowed to operate.
When we look at which insurance policy to purchase, we are faced with several decisions that use specific insurance vocabulary:
- How much does the monthly premium cost?
- What percentage of the cost of using a health service will the insurance cover?
- What percentage, or coinsurance, will I need to pay out of pocket for using a health service?
- What copayment should I expect to pay for accessing specific services?
- What deductible does the insurance policy contain before it begins to cover the costs I have?
- Am I qualified to receive a subsidy to help with the cost of this insurance?
Instead of guessing at what these terms actually mean, review them in the Glossary of Health Coverage and Medical Terms (www.dol.gov/ebsa/pdf/SBCUniformGlossary.pdf), a plain English handout from the US Department of Labor. One term you won’t find here is “subsidy” because it is related to government funding rather than to insurance or health care. In relation to health insurance, a subsidy refers to the funding a government provides to bridge a policy’s expense and the ability of the policy holder to pay. Let’s look at how that might happen under the Affordable Care Act’s mandate.
Why Household Income Now Matters to Insurance Providers
A big change under the Affordable Care Act is moving the insurance industry from determining coverage based on the would-be policy holder’s health and toward ability to pay. That doesn’t mean that if someone has lots of income, an insurance company can charge more than it can charge for people with more modest incomes; there is a cap on what can be charged no matter how much money someone can bring to the table. In fact, by Affordable Care Act mandate, the insurance company must spend out on health care benefits 80% of what it charges to provide insurance (www.healthcare.gov/what-if-i-have-a-grandfathered-health-plan/).
At the other end of the spectrum from the insurance buyer with lots to spend, are the many Americans who have not invested in health insurance because they either could not afford it or didn’t understand how to use it as a cost saving measure to promote better personal health. As we noted in Module 1, over the near course of the Affordable Care Act, everyone will have to be able to demonstrate having health care coverage.
How will that work financially for lower income individuals and families? Federal regulations state exactly how much of an individual or family’s income can be expected to be used for health care (www.irs.gov/PUP/newsroom/TD%209611.pdf), The Internal Revenue Service (IRS) has developed two pages, each in English and in Spanish, to present tax information related to the Affordable Care Act, for individuals and families, for small business employers, and for health insurance and organizations as well. You can visit the Affordable Care Act Tax Provisions page (www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions; in Spanish, http://www.irs.gov/uac/Newsroom/Disposiciones-del-Acta-del-Cuidado-de-Salud-de-Bajo-Precio) for specific information and refer taxpayers new to health insurance to the IRS Affordable Care Act (ACA) Tax Provisions home page (http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions-Home; in Spanish, http://www.irs.gov/Spanish/Disposiciones-Tributarias-de-la-Ley-de-Cuidado-de-Salud-a-Bajo-Precio) to provide context.
Recognize Literacy Issues Related to Negotiating Health Insurance
Under the umbrella term of “literacy” for many kinds of information retrieval skills, we need to consider the capacity to use the information we have the skills to retrieve. Learning how we choose the best way(s) to use information is itself a teachable and important set of skills. Using the Affordable Care Act’s insurance exchange as it functions online gives us as library staff great access to just in time teachable moments.
Apples to Apples Comparison
Beyond the realities of decoding, understanding and working between sets of expressed information that utilize both reading and mathematical skills, the marketplace site, Covered California (coveredca.com/PDFs/English/CoveredCA-HealthPlanBenefitsComparisonChart.pdf), we also find the opportunity to view sets of information that are presented in the same format, allowing a novice as well as an expert information seeker to see exactly how the two sets compare. This provides quick gratification for the new researcher: I look for the possible “best options” and am able to view them all together and decide for myself which suits my needs and wants best.
After entering data in the Covered California enrollment site, the user is presented with options that vary according to metal level (See Module 2 for an explanation of this term). With the added understanding brought about by having a clear awareness of such terms as “premium” and “out of pocket expense,” the enrollee–or prospective enrollee– can look at every plan for which they are eligible and can visit up to four on the same screen. Because the layout of each is the same, there is no need to adjust for the use of synonyms, information presented in different order by different sources, or other extraneous confusions.
in addition, potential enrollees who are working to understand aspects of enrollment have access to some basic materials in languages which they may find easier to read than English. Those who read Spanish more comfortably than English actually have the entire Covered California (www.coveredca.com/espanol/) website in their preferred language. Those who read more comfortably in Armenian, Chinese, Russian, Vietnamese, or another of a dozen other languages, can begin their investigation independently and with more literacy assurance than if English were the only text offered. (Note: California plans to provide a full website for each of these threshold immigrant languages as time goes on. This will not occur in time for this initial enrollment period, but is a harbinger of the dedication being made to provide language transparency for as many Californians as possible).
Being able and empowered to begin the investigation of information independently boosts the adult researcher’s sense of access to the “real” information.
As we discussed in chapter 4 of Module 2, library staff need to be cautious to connect the user with professional interpretation services, through Language Line, rather than relying on family members or friends to suggest what a library user wants to understand about health care coverage when staff and community member do not share a profficiently spoken language.
In addition to these print resources and telephone interpetation services, there are videos available online. Choose among these carefully to be sure that the video information you provide, especially in a language other than your own, is authoritative and not presenting a commercial enterprise or political interpretation of fact. A good English language introduction to the topic of health insurance is The Value of Health Insurance (youtu.be/t4WTyasItDo). A more indepth video presentation, Understanding the Health Insurance Marketplace (http://youtu.be/zsqu_Ce8qec), includes closed captions that provide on-screen captioning in the viewer’s choice of dozens of languages. Although this multilingual captioning is in beta, accompanying the English language listening and watching of the video, with references to the captions in one’s most comfortable reading language can provide an excellent boost to understanding.
Motivated Skill Acquisition
Learning at the point of need, instead of learning in case a situation presents itself in the future, can be a powerful incentive. In order to increase the library’s value to everyone in your community, plan to coordinate information services and adult literacy services in approaching some community sectors together. Not only can enrollment research provide a platform for literacy learners, it can also provide a topic for volunteer literacy tutors and learners to explore together. In addition, the enrollment exploration provides a real life situation for community members of all literacy skill levels to build on their understanding of how the public library can support their personal needs.
In the following module of this series, we will discuss programming around the Affordable Care Act. However, individual inquiries can also be used as teaching platforms when teachable moments present themselves. Here are some best practices to consider including in your own approach to information sharing around the Affordable Care Act:
- Be open minded: don’t assume every question can be foreseen and documented into a passive FAQ.
- Conduct an adequate reference interview: throwing too much information at someone who is prepared for only a little can overwhelm and distract from any information being understood.
- Remember that both health and finances are personal matters: don’t ask invasive questions in a manner or place that doesn’t respect this.
- Be strict with yourself about limiting your information to facts and forego sharing opinions and/or advice, no matter how at ease you may feel or how much pressure someone seems to be asserting in seeking guidance.
- Ensure that the person with an information need related to enrollment or any other aspect of the Affordable Care Act has explicit and clear direction about where to go next if you have not been able to resolve her or his question(s).
Not only are these best practices important to doing the job around the presenting issue, they also teach the user what to expect from library staff. Subsequent needs for information about a variety of possible topics are inevitable. How you respond to the needs around the topic at hand color whether that person will want to use the library in the future.
Federal Subsidies: helping people afford health care (101.communitycatalyst.org/aca-provisions/subsidies) From Georgetown University Health Policy Institute and Community Catalyst, this one page overview shows how income level is tied to expected percentage of out of pocket health costs under the Affordable Care Act.
Getting Lower Costs on Coverage (www.healthcare.gov/getting-lower-costs-on-coverage/) One of several frequently asked questions pages on the US HealthCare.gov site, this one addresses such topics as how to determine if one qualifies for lower costs on health care coverage.
Glossary of Health Coverage and Medical Terms (www.dol.gov/ebsa/pdf/SBCUniformGlossary.pdf) The US Department of Labor provides this “plain language” glossary to help readers with basic reading levels better understand complex terminology related to health insurance and health care.
Measuring Health Insurance Literacy: a call to action (consumersunion.org/wp-content/uploads/2013/03/Health_Insurance_Literacy_Roundtable_rpt.pdf) This 2012 roundtable paper from the Consumers Union, University of Maryland and American Institutes for Research, discusses the shortfalls between insurance terminology and mechanics and many Americans’ capacity for comprehension.
Rights, Protections and the Law FAQ (www.healthcare.gov/rights-protections-and-the-law/) One of several frequently asked questions pages on the US HealthCare.gov site, this one addresses such topics as grandfathered health insurance plans.
Standard Benefits for Individuals, 2014, Covered California (coveredca.com/PDFs/English/CoveredCA-HealthPlanBenefitsComparisonChart.pdf) Benefits, deductibles and co-pays for each metal level are displayed in a single and accessible chart.
CALIX (lists.gseis.ucla.edu/sympa/info/calix) Here is the point from which you can subscribe to the California State Library’s email list.
Covered California on Twitter (twitter.com/CoveredCA ) You can follow them at @CoveredCA.
Covered California updates via email (coveredca.com/resources/updates.html) You can subscribe to email updates here.
Covered California’s YouTube channel (www.youtube.com/CoveredCA) Videos in Spanish as well as English provide good documentary explanations of aspects of the Affordable Care Act in this state.
eHealth: Supporting Library Capacity to Respond to Patron Health Information Requests (www.webjunction.org/explore-topics/ehealth.html) Information about the public library’s role in working with community members seeking information about the Affordable Care Act is supplemented with videos and other resources for library staff, with a national focus.
Federal Health Insurance Marketplace on YouTube (www.youtube.com/HealthCareGov) This YouTube channel has much briefer videos, most of which serve as good reminders from peers of the target communities for the health insurance marketplace.
Health Insurance Marketplace on Twitter (https://twitter.com/HealthCareGov) You can follow them at @HealthCareGov.
Infopeople Project (www.infopeople.org/) From the landing page, you can link to any of the resources and training news discussed in Module 6.
Other Partner Resources (marketplace.cms.gov/getofficialresources/other-partner-resources/other-partner-resources.html) Head Start, Legal Aid and other partners have developed resource materials for outreach related to the Affordable Care Act, and the federal Health Insurance Marketplace brings them neatly together for broader access.