One of the confusing aspects of both the rhetoric and of the Affordable Care Act itself is that it’s a conversation that many of us have come into in the middle and therefore are playing catch-up in understanding its implications.
By now, it should be clear that the Affordable Care Act was primarily designed to get more people insured. Every provision is designed to make sure people get insurance and then to allot how to make that insurance coverage adequate.
Adequate coverage, including the administrative and financial obligations undertaken by the Federal government to implement Affordable Care means that there are budgetary concerns, and those are why several states challenged the legality of Affordable Care, money not coverage.
The Supreme Court upheld the ACA, but identified the tax on those without coverage as a tax (rather than a penalty, which the President and democrats would have preferred because of hostilities about increased taxes). The Supreme Court struck down proposed Medicaid funding changes where the Federal government would withhold all Medicaid funding if states did not expand Medicaid eligibility.
The media conversation since then has largely revolved around Medicare, and ultimately citizens 55 and older have been assured their Medicare coverage will not change BY BOTH SIDES. Similarly, for those citizens under 55 we have been assured that Medicare WILL change.
But what has less frequently been addressed is what happens to citizens who are not yet part of Medicaid or Medicare and their health coverage.
President Obama has touted some shorthand self-congratulation such as that beginning in 2014 lifetime limits will be removed from insurance plans. This means that if your medical expenses exceed lifetime limits imposed by insurance companies, you will still have insurance coverage rather than being liable for 100 percent of out-of-pocket expenses that go beyond lifetime limits. Naturally, this is designed to keep people insured, fulfilling the goal of the ACA.
Less publicized is how insurance companies will maintain their profits in order to remove lifetime limits which will mean reduced coverage where they pay less for essential health benefits or through increased premiums, or a combination of both.
President Obama has self-congratulated himself on provisions that prevent insurance denials for pre-existing conditions, but of course this insurance will cost individuals more than those without pre-existing conditions as it always has.
While arguably beneficial, these provisions do not come as benefits without increased costs to consumers.
Finally, President Obama self-congratulates about provisions for preventive care as part of the savings afforded to consumers who will be able to have illness diagnosed earlier based on the assumption that with preventive care coverage consumers will treat illness earlier which will translate into cheaper healthcare.
Preventive coverage should not be part of health insurance which, like all insurance is designed to cover contingencies of illness creating the need for assistance in paying for needed healthcare which is purchased by citizens through premium payments. Annual exams are not contingencies, they occur at known times for known costs and should not dilute coverage nor persuade citizens they’re getting a great perk from their insurers who make the money up by reducing coverage for needed medical care or by raising premiums, or both.
The public is onto this game as reflected in the lower utilization rates reported by insurance companies in the past year, eg fewer people are going to doctors. If you can’t afford needed treatment, the “gift” of covered testing to get a diagnosis is largely meaningless.
This brings up a direct way to understanding the “metal” categories talked about in the Affordable Care Act. Bear in mind two knowns: The first is that Affordable Care is designed to get people insured and the second is that insurance coverage DOES NOT mean healthcare, it is a means of paying for healthcare.
The requirements of the ACA cover plans that are not self-insured employer plans nor grandfathered-in plans, which leaves the majority of health plans REQUIRED to be qualified health plans under the Act and makes the metal divisions mandatory.
The metals, bronze, silver, gold and platinum are levels of coverage as provided in section 1302. Levels of coverage do not mean that plans will cover one thing or another, all plans will have to cover a little bit of a wide variety of medical care services referred to in the Act as ESSENTIAL HEALTH BENEFITS.
Essential Health Benefits refer to the RANGE of coverages NOT how much. That’s where the metals come in. Therefore, while all qualified health plans will cover the same types of things, the cost to consumers will vary widely.
Levels of coverage will amount to Platinum, covering 90 percent of medical expenses on average, Gold covering 80 percent of medical expenses on average, Silver covering 70 percent of medical expenses on average, and Bronze covering 60 percent of medical expenses on average. Beginning in 2014, post-election, exchanges in the states will list plans meeting these standards. Out-of-pocket expenses will vary based on the usual insurance distinctions of co-payments and deductibles.
Section 1401 and 1402 of the ACA provide for Premium Subsidies and Cost Sharing. First, these sections do not apply if you earn over about $90,000 a year for a family of four, period. In the case of those who are eligible, the Federal government provides for PREMIUM CREDITS to meet financial obligations of paying for insurance coverage at the SILVER level (70 percent). If a family chooses a plan for higher coverage, that share of premium dollars would NOT be eligible for the PREMIUM CREDIT.
For families at 250 percent of the Federal Poverty line an additional BENEFIT is available. In addition to PREMIUM CREDITS, on a sliding scale those families if enrolled in SILVER-LEVEL plans would be eligible for COST-SHARING credits which means that they would not have to pay the full 30 percent of co-payments and deductibles those families earning more than $55,000 a year would have to pay at the silver level.
The tax CREDITS established by the ACA for the cost of premium payments for families earning less than about $90,000 and for additional tax credits for those families earning less than $55,000 might be part of Mitt Romney’s reluctance to discuss which tax credits he would get rid of. Obviously, whether it’s likely or not, if Mitt Romney is arguing he will support REPEAL of Affordable Care, drawing attention to the removal of tax credits for middle class and lower income families would fly in the face of his claims he “cares” about the middle class. I believe that President Obama’s reluctance to self-congratulate about the metal classes is because it is a glaring example of how citizens are getting LESS coverage for LESS money, not exactly a math problem that we don’t understand (since the President, following Bill Clinton, has suddenly adopted mathematics as his strength).
Generally, those who are well will try to save money choosing lower-level plans, such as the bronze or silver plans, and those who have serious illness will opt for higher-level plans, paying higher premiums for greater coverage to avoid bankruptcy from out-of-pocket expenses. This formula is already causing Affordable Care Act experts to warn that over time the population will segregate itself into healthy and unhealthy as plan participants that will mean an increase in the premium costs of the gold and platinum premium rated plans because of the higher number of people actually needing their insurance coverage to cover costs of necessary medical care at levels that will prevent or ward off bankruptcy. This is referred to as Adverse Selection.
It will be interesting to see what new products the insurance industry comes up with such as supplemental plans to cover the inadequacies of basic insurance plans much like Medicare has today. Health savings plans will also probably be boosted as “reasonable” alternatives as most individuals who purchase bronze or silver level plans realize they’re getting the same crummy coverage provided by health savings plans and their partner high-deductible insurance plans.
