Many with chronic illnesses are counting down the days in anticipation of January 1, 2014– this is the day the Affordable Care Act rolls out its most significant changes.
On that day, health insurance will be more accessible and affordable for this group of people, who have routinely been denied coverage or charged the highest rates because of their health conditions. The ACA does not allow insurance companies to deny coverage or charge higher premiums for people who are sick. The law gets rid of caps on how much insurance companies will pay for their care annually and over their lifetimes. We can also look forward to better management of chronic illnesses, free preventative care, more generic drugs, and a better insurance appeal process–to mention just a few changes coming soon through the ACA.
Unfortunately, not all people with chronic illnesses will be enjoying these benefits on January 1st–the ACA falls short of creating universal healthcare, leaving too many without the medical care they desperately need. Here is a look at who is falling through the cracks of the ACA.
Who is Falling Through the Cracks?
1. Those who pay the mandate
In Effect: January 1, 2014
Even with the ACA, some people may still find the cost of health insurance prohibitively expensive. However, health insurance will be mandated, so those who do not buy it may need to pay the penalty. There is no healthcare provided with the payment of penalties.
Tax penalties for not owning a health insurance policy
In effect: January 1, 2014
The penalty for not having a health insurance plan with minimum essential coverage starts in 2014 and increases incrementally through 2016:
- 2014: 1% of income or $95 per adult (whichever is higher)
- 2015: 2% of income or $325 per adult
- 2016: 2.5% of income or $695 per adult
- Family penalties: The fee for children who do not have health insurance is half the adult amount. Fees are capped for families– the most a family would have to pay in 2014 is $285.
- Fees are paid when filing income tax returns.
2. Some immigrants
- Undocumented immigrants are left out of both the benefits and the mandates of the ACA. They cannot buy health insurance on the exchanges, do not qualify for any health subsidies, and cannot get Medicaid. The only healthcare options available to undocumented immigrants are to get it through an employer; pay full price for private individual insurance; pay for medical services without insurance; or resort to visiting emergency rooms.
- Newly documented immigrants are eligible for all the benefits of the ACA, and are also subject to the tax mandate if they do not have a health insurance policy. There is a 5-year waiting period to qualify for Medicaid, although some states have waived the 5-year waiting period for children and pregnant women.
3. Residents of states rejecting Medicaid expansion
The ACA increases the eligibility for Medicaid to include people making up to 138% of the federal poverty line (FPL). People making between 100% and 400% of the FPL are entitled to subsidies for health insurance in their states’ exchanges. However, a gap in coverage occurred when the Supreme Court made it optional for states to expand their Medicaid programs in their 2012 decision on the ACA.
To date, there are 15 states refusing federal funds to expand their Medicaid programs, and several more who are still deciding whether to participate in the expansion. The ACA was not amended to accommodate for the Supreme Court ruling, leaving a potential gap in coverage for people in states rejecting Medicaid expansion. People in those states making less than 100% of the FLP may not qualify for any help—neither Medicaid nor a subsidy to buy insurance on the exchanges. To fix this problem, the ACA would need to be amended.
4. People with “grandfathered” health plans
Both individual and employer plans in effect before March 23, 2010, are “grandfathered” and exempt from some of the ACA’s rules and protections. Grandfathered plans must still follow some of the rules, including coverage for dependents under age 26 and the elimination of lifetime spending caps. But the grandfathered plans are exempt from other requirements. Grandfathered plans:
- Are not required to provide free preventative care;
- Do not have to offer a package of “Essential Health Benefits;”
- Can impose annual spending limits on individual health plans; and
- Can refuse to cover people with pre-existing conditions.
Grandfathered plans can be a problem for people with chronic illnesses. In 2013, 36 percent of employer plans were grandfathered. Luckily, health insurance plans are expected to lose their grandfathered status over time as employers buy new healthcare policies (Kaiser Health News.)
5. People who are exempt from the mandate to have health insurance (but may still not have health insurance).
The following groups are exempt from the mandates and benefits of the Affordable Care Act:
- People who would need to pay more than 8% of their income for the bronze-level (lowest level) plan in their state’s health insurance exchange, after taking into consideration any employer contributions or health insurance tax credits;
- Undocumented immigrants;
- People in jail;
- Members of Indian tribes;
- Members of religions opposed to health treatments available through health insurance plans (applies only to specific religions);
- Income is below level required to pay taxes; and
- Individuals in hardship situations (as defined by Health and Human Services)