Posts Tagged "Affordable Care Act"

ACA Proves Itself but Race Disparity Persists

The U.S. Supreme Court’s decision in June to reject another challenge to the Affordable Care Act was widely seen as the final word: the law is here to stay.

But it was COVID-19 that underscored how important it is.

Racial disparities in uninsured populations

The federal government said nearly 10 million people signed up for Medicaid health coverage during the pandemic year that ended in January 2021. A decade after passage of the Affordable Care Act (ACA), which expanded Medicaid to include more low-income Americans by increasing the income limit for eligibility, the new sign-ups pushed total Medicaid enrollment to a record high of 80 million.

The recent increase was largely due to the spike in sign-ups among the unemployed or workers who saw their hours reduced and lost some of their wages. The relief packages passed by Congress in March 2020 and this year encouraged Medicaid enrollment by giving states additional funding to pay medical costs and sign up more people.

Beyond Medicaid, sales of regular health insurance policies sold on the state insurance exchanges also rose last year, as COVID-19 raced through the population. A 5 percent increase in enrollment in the policies, which are often subsidized, pushed total enrollment to 12 million.

Earlier this year, the American Rescue Plan continued to shore up health coverage by reducing insurance premiums for people who buy the policies. Unfortunately, these and earlier federal supports were temporary measures put in place for the pandemic, and some progress will be reversed when the supports expire at the end of this year or next year.

Despite the recent coverage gains, it has been a bumpy ride. Prior to COVID-19, sales of ACA policies had been slowing after years of marked progress in reducing the U.S. uninsured rate. And in the states that have not expanded Medicaid to reach more residents, the uninsured rates are nearly double the rates in the expansion states – 15.5 percent vs 8.3 percent. …Learn More

Employers Want Help with Health Costs

The cost of employer health insurance has skyrocketed, and workers are picking up some of that growing tab. Amid employees’ grumbling, employers are loath to push more of the cost onto their workers.

That’s why the consensus view among major employers, expressed in a recent survey, sounded like a cry for help. Calling rising insurance costs “unsustainable,” the vast majority said they need help from the government either to provide alternative forms of coverage or control health care and prescription costs.

Employers “have reached their limit,” said Elizabeth Mitchell, chief executive of the Purchaser Business Group on Health, an employer advocacy organization that collaborated with the Kaiser Family Foundation on the survey.

Employers, she said, “are tired of pouring tons of money into a broken health care market that delivers uneven quality at bloated costs.”

And these are the major corporations and non-profits with more than 5,000 employees. They have some leverage to negotiate with insurers and more financial wherewithal to pay for the plans. Smaller employers – if they provide health insurance at all – pay roughly the same premiums as large employers, and their workers shoulder a larger share of the cost for family plans.

Last year, employers with more than 50 workers paid $21,342 in premiums to cover employees with family plans – that’s still 50 percent more than a decade ago, despite a recent slowdown in health care inflation, according to Kaiser.

When employers’ insurance costs rise so quickly, that squeezes out money they might use for wages and other benefits. Workers are also paying more, though each employer decides how much of the added costs to pass on to workers.

In 2020, employees paid nearly $5,600 – more than a quarter – of employers’ total costs for family plans. To curb their health insurance expenses, employers increasingly are offering high-deductible plans, and the deductibles workers pay for these plans are also rising.

The major employers said in the survey that they’re open to a range of federal policies that would either cut health care costs or get the government more involved in providing health care. …Learn More

Family under an umbrella

5 Million Families Caught in an ACA Glitch

The states’ health insurance marketplaces will sell subsidized family policies to workers who have employer coverage on one condition: their employer premiums are deemed unaffordable.

But this condition has a quirk. Under the Affordable Care Act (ACA), a worker is eligible to buy a subsidized family plan only if he can’t afford his employer’s premiums for an individual policy, defined in the law as exceeding 9.83 percent of his income. Policymakers argue this is the wrong standard, because the ineligible worker needs a family policy, and employers’ family policies usually have much higher premiums than their individual policies.

The Kaiser Family Foundation estimates some 5.1 million workers are in this predicament, which is known as the “family glitch.”

The majority of workers who are not eligible for the ACA’s family coverage are buying the policies at work, and they spend an average of 16 percent of their income on premiums, Kaiser said. The people who can’t afford the employer insurance are forced to go without.

Tina Marie Mueller’s family is caught in the family glitch. She recently wrote in Health Affairs that her husband pays $1,500 per month for employer health insurance for the family, including their two children. “So, after paying for our family insurance, my husband brings home $400/wk,” Mueller said. “We are beyond frustrated that this part of the ACA hasn’t been fixed.”

The COVID relief package passed in March did temporarily expand access to the exchanges for more middle-class Americans by dramatically increasing the premium subsidies. But “people in the family glitch will still not be helped,” said Krutika Amin, a health care expert at the Kaiser Foundation. …Learn More

ACA Eased the Financial Burden on Families

Woman and baby at the doctors

The Affordable Care Act (ACA) has reduced families’ medical costs significantly.

The ACA’s main goal was to provide coverage for the first time to workers who lack employer health insurance. But the expansion of free or subsidized health care to millions of parents with low and modest incomes has improved their financial stability and freed up money for their families’ other critical needs, concluded a new University of California at Davis study.

The main way the ACA expanded coverage was by giving states the option of providing Medicaid to workers earning up to 138 percent of the federal poverty level. The law also increased the number of children with health insurance, because federal and state outreach during the Medicaid expansion raised parents’ awareness of two separate insurance programs that had long been available to children: Medicaid and the Children’s Health Insurance Program. To help families with modest incomes, the health care law put a cap on their annual medical spending.

Prior to the ACA’s passage, out-of-pocket medical costs were a high financial burden for 15 percent of U.S. families. That has fallen to about 10 percent of families in the years since passage, the researchers said.

What qualifies as a high cost burden depends on the family’s income. One example: the researchers determined that a family earning $75,000 had a high cost burden if they paid more than 8.35 percent of their income for out-of-pocket deductibles and copayments.

However, the study is not a current picture of the situation, because it was based on data from health care spending surveys in 2000 through 2017, prior to the pandemic. During the past year, millions of people were laid off and lost their employer health insurance when they may need it most.

But the ACA’s benefits are clear, the researchers said. Another aspect of the reform was to allow workers who earn too much to qualify for Medicaid to purchase subsidized private health insurance on the state exchanges. The law capped the total that workers spend on health care – once they reach the cap, their care is fully covered. …Learn More

Affordable Care Act Indirectly Affects SSI

Disabled man in physical therapy

The Affordable Care Act (ACA) requires that insurance companies offer coverage to young adults with disabilities – like all young people – through their parents’ employer coverage until age 26.

So, up to this point, many adults with disabilities now have a viable way to get health services, independent of any government assistance. But at 26, that changes.

A Mathematica study finds that’s when some start applying to the federal Supplemental Security Income Program (SSI) – probably partly to gain access to Medicaid health coverage. Health insurance is critically important to people with disabilities, who often need expensive, specialized medical services. SSI’s purpose is to provide monthly cash assistance for living expenses if they lack financial resources and don’t have the work history required for federal disability insurance. SSI recipients also qualify automatically for Medicaid in a majority of states.

The researchers examined the trends in applications to SSI by people in their 20s before and after the Affordable Care Act’s 2010 passage. They found that the annual application rates among people right around their 26th birthdays have recently been 3.4 percent higher than what would be expected based on the steady pattern of overall age trends. This jump in applications at age 26 was not evident before the ACA – when people tended to lose parental insurance earlier in their 20s.

The number of SSI applications that were approved was also somewhat higher, according to the study, which was funded by the U.S. Social Security Administration.

The risk to young adults who go on SSI, the researchers said, is that they might develop a long-term dependence on the program’s cash assistance and Medicaid. And this, in turn, could discourage people with less severe disabilities from trying to work at a critical point in their lives, because SSI strictly limits how much money its recipients can earn. …Learn More

A sign that says what's your plan for retirement

Workers Lacking 401ks Need a Solution

Although COVID-19 has exposed alarming gaps in a health insurance system that revolves around the employer, the Affordable Care Act is one potential solution for workers who lack the employer coverage.

There is nothing equivalent on the retirement side, however.

Many workers between ages 50 and 64 are in jobs that provide neither health insurance nor a retirement savings plan. But, in contrast to the health insurance options available to them, “no retirement sav­ing vehicle appears effective in helping older workers in nontraditional jobs set aside money for retirement,” concluded a new analysis of workers in these nontraditional jobs.

Nontraditional workers who want to save for retirement are left with two options: their spouse’s 401(k) savings plan or an IRA operated by a bank, broker or financial firm.

A spouse’s 401(k) hasn’t been an effective fallback for a couple of reasons. First, a substantial number of the workers who lack their own 401(k)s are not married. And second, if they are married to someone with a 401(k), they’re not any better off. The researcher found that married people currently contributing to 401(k)s do not save more to compensate for the spouse without a 401(k), reinforcing other research showing these couples don’t save enough for two.

The other option – an IRA – is open to everyone. But only a small fraction of Americans currently are saving money in IRAs, and most of them already have a 401(k). So IRAs, in practice, aren’t doing much for the people who need the help: workers who lack employer benefits. … Learn More

Home Care Reform’s Outcome a Surprise

Image of nursing home staff

Medicaid pays for care for six out of 10 nursing home residents.

To reduce the program’s costs, the Affordable Care Act (ACA) encouraged states to expand the care that people over 65 can receive in their homes or through community organizations. The hope was that they would delay or – even better for them – avoid moving into a nursing home if they had easier access to medical and support services.

Many states historically did not use Medicaid funding to pay for home care. The ACA’s Balancing Incentive Payments Program required the 15 states that chose to participate in the reform, including Nevada, Texas, Florida, Illinois, and New York, to increase spending on home and community care to half of their total Medicaid budgets for long-term care. By the end of the program, the states had met their goals of more balanced spending on home care versus nursing home care.

But four years after the reform went into effect in 2011, the states’ nursing home population had not changed, compared with the states that did not expand their services, according to a University of Wisconsin study for the Retirement and Disability Research Consortium. The researchers said one possible reason the reform didn’t reduce nursing home residence was that people who were never candidates for this care were the ones taking advantage of the alternative forms of care.

The analysis did find other unintended consequences of the shift in Medicaid funds to home and community care. First, somewhat more older people moved out of a family member’s house and were able to live on their own.

Second, as more people moved into their own place, costs may have increased for a different federal program: Supplemental Security Income (SSI) for low-income people. The increase had to do with how this program calculates financial assistance. SSI’s monthly benefits are based on an individual’s income. When retirees decide to live on their own, the housing, meals and other supports the family once provided are no longer counted as income. The drop in a retiree’s income means a bigger SSI check.

On the other hand, the Medicaid reform may have financial benefits for caregiving families, the researchers said.

The greater availability of home and community care for seniors – whether they live with family or on their own – frees up time for their family members to earn more money at paying jobs. …
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