Category Archives: Politics

A Common Gal Looks at ObamaCare, Part 6: Four Levels of Coverage

A Common Gal Looks at ObamaCareI’m reading up on The Patient Protection and Affordable Care Act (“ObamaCare” … although I supposed I really should start using the real acronym, PPACA, instead of the nickname conservatives gave it). That includes the act itself, amendments passed shortly afterward, and the recent Supreme Court ruling. It’s a lot of pages (906, 55, and 193 respectively), but I want to understand it. I’m documenting my read-through here. I am not a lawyer or a healthcare professional, just a common college-educated person. These are my thoughts, not advice to you. Read the act yourself like the free person you are. ;o).

Different levels of healthcare coverage are defined in the Affordable Care Act: bronze, silver, gold and platinum.[1]

Fretful writer side note: I wish that authors of legislation (and authors in general) would get more original than using metals or jewels (*yawn*) to create memorable scales of intensity. Why not go with increasingly hard woods? Balsa, Magnolia, Pecan, Ebony. Besides, I’d love to hear a Republican defend a “balsa plan” as being good enough for the poor — or see a white conservative gladly signing on for an “ebony plan.”

Ahem. Anyway …

I attempt to translate legalese into people-speak, below. Note that “actuarial value” means “the percentage of total average costs for covered benefits that a plan will cover.” So if your plan has an actuarial value of 70%, then you have a 70/30 plan (you pay the 30% for all covered benefits). (Thank you, healthcare.gov, for coming to my rescue again with your understandable definitions.)

Levels of Coverage

Level of Coverage What They Say What I Think It Means(WHY don’t they just write it this way?)
Bronze A plan in the bronze level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan. Your bronze plan gives you 60/40 coverage.
Silver A plan in the silver level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 70 percent of the full actuarial value of the benefits provided under the plan. Your silver plan gives you 70/30 coverage.
Gold A plan in the gold level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 80 percent of the full actuarial value of the benefits provided under the plan. Your gold plan gives you 80/20 coverage.
Platinum A plan in the platinum level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 90 percent of the full actuarial value of the benefits provided under the plan. Your platinum plan gives you 90/10 coverage.

 

So, basically, every state that manfully sucks up its frothing “states rights” outrage and signs on for the Affordable Care Act has to run the gamut from bronze to platinum coverage.

Why Have Levels?

I did a cursory search through the act to get a sense of why these definitions are needed. I think it is because states need to provide healthcare plans with different levels of coverage. If you choose to get less (bronze, 60/40 coverage), you pay less. This makes healthcare more affordable for poor people, gives them options to choose, and probably reduces the cost of coverage in general for the state because some people will choose the cheaper levels.

Health Savings Accounts Can Be Considered

The Secretary of Health and Human Services has the option of considering the money your employer pays into health savings accounts[2] when “determining the level of coverage for a plan of the employer.” Here’s what I *think* that means: If you choose to use a health savings account, whatever the company pays into that account for you will count toward the employer’s contribution for your health insurance. Now that’s cool. I didn’t even know employers COULD pay into your health savings account.

Healthcare.gov explains that a health savings account lets taxpayers squirrel away some pre-tax money to use for qualified medical expenses. Funds roll over each year if you don’t spend them (unlike a flexible spending account).

Meh, Just Come Close

There can be “allowable variance” in the bronze, silver, gold, and platinum plans’ coverage as long as the variations aren’t big[3]. For example, instead of the bronze plan offering 60/40 coverage in your state, it could be 58/42 or 62/38. Look for standards to develop on how big the variation can be. A quick search online tells me it may be about +/- 2%.

Catastrophic Plan

Section 1302 (e) seems to offer an alternative to the bronze, silver, gold, or platinum levels of coverage. It’s entitled “Catastrophic Plan.”  Here’s what I *think* it means:

A health plan that does NOT provide the bronze, silver, gold or platinum levels of coverage is still cool as one of the acceptable plans under the Affordable Care Act if it meets ALL of these conditions:

  • The only people who can enroll in it are under 30 or have an exemption based on poverty or other hardship[4], AND
  • People get the essential healthcare benefits[5] after they’ve paid their share of costs,[6] AND
  • There is coverage for at least three primary care visits, AND
  • It’s offered only in the “individual market.” (I guess this means catastrophic healthcare plans for individuals, not for families.)

Child-Only Plans

Section 1302 (f) just says that the whole bronze-silver-gold-platinum plan levels must also be offered as child-only plans (under age 21 at the beginning of a plan year).

Time to Flip Back to Earlier Pages

This concludes my look at Section 1302 of the Affordable Care Act. (One section down!) Next, I’ll go BACK to Section 2711 where I started. (Remember that? I was looking at it when the act started referring me hither and yon.)

Other Posts on ObamaCare:

  • Part 1: Intro
  • Part 2: Types of coverage, no discrimination
  • Part 3: Exchanges and what they do
  • Part 4: Your cost limits and adjustments
  • Part 5: Deductibles and preventive care
  • Part 7: Limits on losing coverage

Footnotes! We Have Footnotes!

See below for references to places in the Affordable Care Act that correlate to my summaries in this article.

[1] Source: Section 1302 (d)(1).

[2] That is, a health savings account per Section 223 of the Internal Revenue Code of 1986. Source: Section 1302 (d)(2)(B).

[3] Source: Section 1302 (d)(2)(C)(3).

[4] The person has to have a certification that he/she is exempt per section 5000A of the Internal Revenue Code of 1986 – specifically Section 5000A(e)(1) (relating to individuals without affordable coverage) or Section 5000A(e)(5) (relating to individuals with hardships). No way am I going to look up the details of an IRS requirement – you are on your own for that one, dudes!

[5] Because it’s really easy to get lost in jargon, I’m going to keep repeating the definition of “essential healthcare benefits” per this act, anytime I reference them in my posts:

  • Ambulatory (“walk in”) patient services
  • Emergency services
  • Hospitalization
  • Maternity/newborn care
  • Mental health and substance use disorder services (including behavioral health treatment)
  • Prescription drugs
  • Rehab and habilitative services/devices
  • Lab services
  • Preventive/wellness services and chronic disease management
  • Pediatric services (including oral and vision care)

[6] See Section 1302(c)(1)(A) and (B).

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A Common Gal Looks at ObamaCare, Part 5: Deductibles & Preventive Care

A Common Gal Looks at ObamaCareI’m reading up on The Patient Protection and Affordable Care Act (“ObamaCare”). That includes the act itself, amendments passed shortly afterward, and the recent Supreme Court ruling. It’s a lot of pages (906, 55, and 193 respectively), but I want to understand it. I’m documenting my read-through here. I am not a lawyer or a healthcare professional, just a common college-educated person. These are my thoughts, not advice to you. Read the act yourself like the free person you are. ;o). Also note: This act refers a lot to “health care plans”; for simplicity’s sake, I sometimes just say “insurance” or “health insurance.

Yesterday’s dive into the Affordable Care Act was unsatisfying because I couldn’t find the text of another act that’s referenced within. But I got a little help from a friend in looking it up. ;o)

Section 1302(c)(2)(D) of the Affordable Care Act says, “Coordination With Preventive Limits. Nothing in this paragraph shall be construed to allow a plan to have a deductible under the plan apply to benefits described in section 2713 of the Public Health Service Act.”

OK … so if you have health insurance under the Affordable Care Act, your deductible doesn’t apply to benefits listed in Section 2713 of this other act. Sounds like I need to look up the Public Health Service Act. Hello, Google.

Well, the Public Health Service Act dates back to nineteen-freaking-forty-four and has been expanded and amended multiple times since then. It’s captured in the overwhelmingly large Title 42 of the U.S. Code, so I looked through that … and looked … and looked … and gave up and sent up a smoke signal for help. The reason I couldn’t find it? It’s because it’s new. Section 2713 is being added on by virtue of Section 1001 of the … you guessed it … Patient Protection and Affordable Care Act! Now why couldn’t the legislators just have referred to that section within THE SAME ACT instead of sending me chasing all over the Internet? Oh, legislators – quit hazing me. ;o)

Deductibles & Preventive Care

Good ol’ new Section 2713 is all about preventive health services. If I’m reading Section 1302(c)(2)(D) of the Affordable Care Act correctly, deductibles don’t apply to the latest recommended types of preventive health services, including:

  • “Evidence-based items or services” (Um … isn’t all medicine evidence based?)
  • Immunizations
  • “Evidence-informed preventive care and screenings” for babies, kids and teens
  • “Additional preventive care and screenings” for women if the care/screening is included in comprehensive guidelines but NOT described in the act’s list of essential healthcare benefits.[1]

Section 2713 also specifies what agencies make the recommendations. The Secretary of Health and Human Services oversees the timing of when those recommendations are made vs. when the recommendations are effective.

If your eyes haven’t glazed over yet, here’s one more confusing bit: All of this does NOT prevent coverage of services that go beyond those recommended, nor does it deny coverage for services that are not specifically recommended. It’s just that your deductibles don’t apply (if I am reading this correctly).

Value-Based Insurance

Another option is troubling to me: The Secretary of Health and Human Services also can “develop guidelines to permit a group health plan and a health insurance issuer offering group or individual health insurance coverage to utilize value-based insurance designs.” The Washington Post describes what this means:

Value-based insurance design is “the idea that consumers’ out-of-pocket medical costs should be based on the value of a service to their health rather than its price.”

Theoretical example: It might be valuable to the insurance plan for people with chronic illnesses like diabetes or high cholesterol to take preventive steps to prevent more costly problems later on, so their preventive care and medication could be free or very low cost. But expensive procedures that are deemed “overused” (perhaps knee surgeries or MRI scans) could be discouraged with higher out-of-pocket costs.

Managed Care magazine said, “It promotes the use of services when the clinical benefits exceed the cost and discourages the use of services when the benefits do not justify the cost.”

I can tell you right now that this does not sound awesome to me. What it sounds like is an accountant (rather than a doctor) deciding whether a medical procedure is “worth it” to offer to me at a reasonable price under the insurance plan.

You can read about concerns over value-based insurance in this Kaiser Health News article.

Coming Up

My next article will describe definitions of “levels of coverage” (bronze, silver, gold, and platinum) under the Affordable Care Act and why this matters.

Other Posts on ObamaCare:

  • Part 1: Intro
  • Part 2: Types of coverage, no discrimination
  • Part 3: Exchanges and what they do
  • Part 4: Your cost limits and adjustments
  • Part 6: Four levels of coverage
  • Part 7: Limits on losing coverage

Footnote! We’ve Got a Footnote!


[1] Essential healthcare benefits are listed early on in the act, and they are:

  • Ambulatory (“walk in”) patient services
  • Emergency services
  • Hospitalization
  • Maternity/newborn care
  • Mental health and substance use disorder services (including behavioral health treatment)
  • Prescription drugs
  • Rehab and habilitative services/devices
  • Lab services
  • Preventive/wellness services and chronic disease management
  • Pediatric services (including oral and vision care).

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A Common Gal Looks at ObamaCare, Part 4: Your Cost Limits & Adjustments

A Common Gal Looks at ObamaCareI’m reading up on The Patient Protection and Affordable Care Act (“ObamaCare”). That includes the act itself, amendments passed shortly afterward, and the recent Supreme Court ruling. It’s a lot of pages (906, 55, and 193 respectively), but I want to understand it. I’m documenting my read-through here. I am not a lawyer or a healthcare professional, just a common college-educated person. These are my thoughts, not advice to you. Read the act yourself like the free person you are. ;o). Also note: This act refers a lot to “health care plans”; for simplicity’s sake, I sometimes just say “insurance” or “health insurance.

Denser than Diamonds

Health plans can provide more than the minimum “essential health benefits” described in this subsection[1]. (I guess that “this subsection” means subsection (b) of Section 1302, but I’m not sure. Legalese is denser than diamonds but lots uglier and way less valuable.)

Limits on Your Cost-Sharing

There’s an annual limit on the insured person’s cost-sharing (for family or for self-only policies), beginning in CY2014.[2]

In this title, “cost sharing” includes[3]:

  • Deductibles
  • Co-insurance
  • Co-payments or similar charges
  • Any other expenditures required of an insured person if the expenditures are qualified medical expenses.

NOT included in that definition are[4]:

  • Premiums
  • Balance billing amounts for non-network providers
  • Spending for non-covered services

How Premiums Can Be Raised

There are provisions[5] for premium adjustments starting in CY2015:

  • For self-only coverage: The CY2014 premium will be multiplied by a “premium adjustment percentage” that I’ll talk about in a minute.
  • For all other coverage (self plus spouse, self plus family, etc.): The CY2014 premium will be multiplied by that premium adjustment percentage AND THEN doubled.
  • Rounding: If any of these increases are not a multiple of $50, they’ll be rounded to the next lowest multiple of $50.

Limits on Your Deductible Costs

There are annual limits[6] on deductibles for employer-sponsored plans in the “small group market” (with an exception I’ll mention in the next bullet point):

  • Max of $2,000 for self-only coverage, starting in CY2014.
  • Max of $4,000 for any other plan, starting in CY2014.
  • Those limits on deductibles for employer-sponsored plans CAN be increased by the maximum amount of reimbursement which is reasonably available to a participant under a “flexible spending arrangement” per IRS rules. (I’m not sure what this means. I think it means if you have a health savings account you use each year with your insurance plan, they can increase your deductible up to the amount you’re allowed to squirrel away in that health savings account. Maybe?)
  • Starting in CY2015, there are provisions[7]for increasing deductibles:
    • For self-only coverage: The CY2014 maximum will be multiplied by a premium adjustment percentage.
    • For all other coverage: The CY2014 maximum deductible will be multiplied by that premium adjustment percentage AND THEN doubled.
    • Rounding: If any of these increases are not a multiple of $50, they’ll be rounded to the next lowest multiple of $50.

The Premium Adjustment Percentage

This term, “Premium Adjustment Percentage,” defines how much premiums will be adjusted (you know that’s almost always going to be adjusted “up,” right?).[8] The way I read it, it’s basically a guesstimate by the Secretary of Health and Human Services.

  • Starting in 2013: No later than Oct. 1 each year, the Secretary of Health and Human Services has to estimate the calendar year’s average per capita premium for health insurance coverage in the U.S.
  • Starting in 2014: The Premium Adjustment Percentage will be how much the Secretary of Health and Human Services estimates the new year’s average per capita premium will exceed the previous year’s.

At least that’s what I think it means. Here’s what the law actually says:

Section 1302(c)(4): Premium Adjustment Percentage. For purposes of paragraphs (1)(B)(i) and (2)(B)(i), the premium adjustment percentage for any calendar year is the percentage (if any) by which the average per capita premium for health insurance coverage in the United States for the preceding calendar year (as estimated by the Secretary no later than October 1 of such preceding calendar year) exceeds such average per capita premium for 2013 (as determined by the Secretary).

Actuarial Value Protected

The “actuarial value” of any health plan can’t be affected by the limitations under this paragraph.[9] (I’m not sure what they mean by “under this paragraph.” Do they mean everything that comes next? Or everything in Section 1302(c)(2)? Oh Legalese, I am coming to hate your impenetrable nature.)

At least Healthcare.gov was kind enough to explain actuarial value to me:

“The percentage of total average costs for covered benefits that a plan will cover. For example, if a plan has an actuarial value of 70%, on average, you would be responsible for 30% of the costs of all covered benefits.”

Reference to Some Other Health Act

The deductibles we’ve been discussing do not apply[10] to the benefits in Section 2713 of the Public Health Service Act.

So what the heck is THAT act? I looked it up, and Jesus Christ, it dates back to 1944 and has had tons of amendments since. It’s captured in Title 42 of the U.S. Code (take a peek to see all the bazillions of things covered in Title 42). I’m going to ask a friend or two for some help in looking up Section 2713. More on this later!

Coming Up Next

My next article will tackle:

  • Explaining that reference to Section 2713 of the Public Health Service Act
  • Describing the various “levels of coverage”: Bronze, silver, gold, and platinum.

Other Posts on ObamaCare:

  • Part 1: Intro
  • Part 2: Types of coverage, no discrimination
  • Part 3: Exchanges and what they do
  • Part 4: Your cost limits and adjustments
  • Part 5: Deductibles and preventive care
  • Part 6: Four levels of coverage
  • Part 7: Limits on losing coverage

Footnotes! We’ve Got Footnotes!

See below for references to places in the Affordable Care Act that correlate to my summaries in this article.

[1] Source: Section 1302(b)(5).

[2] It can’t be more than the dollar amount in section 223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 for self-only and family coverage. (Whatever the heck that amount is.) Source: Section 1302(c)(1)(A).

[3] Source: Section 1302(c)(3)(A). Qualified medical expenses are defined in section 223(d)(2) of the Internal Revenue Code of 1986) with respect to essential health benefits covered under the plan.

[4] Source: Section 1302(c)(3)(B).

[5] Source: Section 1302(c)(1)(B).

[6] Source: Section 1302(c)(2)(A). The “flexible spending arrangement” is described in section 106(c)(2) of the Internal Revenue Code of 1986 (determined without regard to any salary reduction arrangement).

[7] Source: Section 1302(c)(2)(B).

[8] Section 1302(c)(4).

[9] Source: Section 1302(c)(2)(C).

[10] Source: Section 1302(c)(2)(D).

 

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