Today's guest post is by Michael Cahill, of the Vista Health Solutions blog. He describes the expected effects of “Obamacare” for patients of mental health practitioners. While a lot of it sounds pretty good, what remains to be seen are the reimbursement rates for psychiatrists, especially for psychotherapy, which are abysmally low under Medicaid. With a huge doctor shortage anticipated (there has been no increase in the number of residency training slots in almost twenty years), this could become a big issue. Having coverage does not do anyone much good if they can’t find a doctor who accepts their insurance. But those insurance company CEO’s can not afford any cuts to their multi-million dollar salaries! ~ DA
By this point
you’ve certainly heard about the Affordable Care Act, sometimes more commonly
referred to as Obamacare.
The legislation
is the Obama administration’s landmark attempt at reforming the American
healthcare system. After surviving 37 repeal attempts, the most recent of which
took place last month, and a Supreme Court challenge, the major parts of the
law are still intact and set to go into effect next year on Jan. 1, 2014.
One group that
stands to enjoy some of the best benefits of the Affordable Care Act are those
individuals with mental illness. The law takes aim at the current pseudo
separation of mental health and physical health. It tries to bridge that gap to
improve treatment and make it more affordable, while also placing an emphasis
on prevention and early detection.
Here are five
ways that the legislation will change mental health treatment in America:
People with a
serious mental illness diagnosis have long been disproportionately affected the
routine denial of health insurance coverage because of a “pre-existing”
condition.
For years
insurers in most states could deny coverage to anyone because of their medical
history. Often this left people who needed coverage the most out in the cold
with no way to pay for their medical care. In cases where they were actually
sold health insurance their premiums were often much higher than a person’s
without their history.
Because of
these practices millions of people living with severe, debilitating diseases
were unable to get the treatment and help they needed to get healthy and stay
healthy.
Now that
policy’s days are over.
Since the law's
2010 passage these folks with a pre-existing condition have been able to
receive health insurance coverage through a state by state high risk insurance
pool.
Come 2014 when
the last big phase of the Affordable Care Act becomes law, insurance companies
will no longer be able to deny coverage to people with pre-existing conditions
or charge them more than they would a healthy person.
Respectively
these policies are called guaranteed issue and commuting rating. States like
New York and Massachusetts have had these policies on the books for a number of
years, allowing medical coverage to expand to a great many people.
Critics have
complained that these policies will raise rates nationwide to levels that still
put insurance beyond the reach of many people. However many of those people
will also be eligible to receive a premium tax credit if their yearly income
falls between 133 and 400 percent of the federal poverty live.
More on how
that tax credit works in a little bit.
2. More Access to Medicaid
As part of the
Affordable Care Act the Obama administration passed legislation that would
expand access to Medicaid. Medicaid is a federally subsidized health insurance
program for low income and disabled individuals who are not insured through
their spouse or employer and cannot afford to purchase health insurance.
Each state runs
their own Medicaid program, and the eligibility requirements differ from state
to state. Usually there is a minimum threshold of age and/or income.
The Affordable
Care Act legislation proposed to expand Medicaid eligibility to people at 133
percent and below of the federal poverty line. It also would allow single
childless adults to apply for Medicaid.
After last
summer’s Supreme Court ruling on the Care Act states were allowed to opt out of
the Medicaid expansion if they so chose. So far 26 states have said they will
accept the expansion, while 13 have said they will reject with. The other 11
states are still deciding about what to do.
Historically
Medicaid has provided an array of mental health treatments and services that
have been superior to many of the services offered by private traditional
health insurance plans. It’s also an especially helpful program to those with a
serious mental illness as many are unemployed and could not afford to pay for
insurance.
3. Plans sold through the state health insurance exchanges have to cover mental health treatment.
All health
insurance plans sold through the state public health insurance exchanges, or
just exchanges for short, will have to include coverage for a list of essential
benefits in 10 categories. One of those categories is mental health and
substance abuse services.
The exact
details of which treatments and services will be offered is left up to the
states. Each state will have a slightly different list of exact services, which
is still being finalized.
Digging into
the legislation, it requires that the mental health and substance abuse
coverage be on par with medical/surgical coverage. For people with mental
health disabilities this will be a big relief if they are searching for an
insurance plan through the state exchange.
They won’t have
to worry about slogging through pages of benefits summaries to see if the
treatment they need is covered. The essential benefits in the exchange will
also cover rehabilitative and habilitative services, as well as ambulance
service, prescriptions, and inpatient services.
4. Tax credits
With a large
majority those with a serious mental illness also unemployed many, especially
with the Medicaid expansion, will qualify for government assisted health
insurance. But for those who aren’t eligible and want an exchange plan they
might get a nice tax credit to offset costs.
If an
individual’s yearly income falls between 133 percent and 400 percent of the
federal poverty line (FPL) then they’ll qualify for a premium tax credit. For
states that did not accept the Medicaid expansion the qualifying range is
between 100 and 400 percent of the FPL.
So let’s walk
through how this tax credit work. Bear with me here it does get a little
complicated.
The credit is
calculated based off of a maximum contribution toward their health insurance of
9.5 percent of their annual income minus the price of the second lowest Silver
tier plan offered in that person’s region.
If your annual
income is less than 400 percent of the FPL the percentage of your annual income
decreases accordingly. This percentage is based off of a sliding scale, so the
less you make, the less you have to pay.
Still with me?
Insurance plans
sold on the exchange come at four different levels each with its own price and
level of coverage. Although they all cover the same mandated services, they
have different cost sharing levels. They are:
● Bronze level - 60 percent coverage
● Silver level - 70 percent coverage
● Gold level - 80 percent coverage
● Platinum level - 90 percent coverage
Those
percentages refer to the amount paid in premiums versus the out of pocket
expenses. A Bronze plan for example will have low monthly premiums, but higher
deductibles and copays. While a gold plan will cost more each month, but come
with low deductibles and copays..
Lets take a
look at an example for how the tax credit might work:
Chris is a
32-year-old individual earning $22,000 a year. Because of his income level he
doesn’t qualify for Medicaid and his job doesn’t offer health insurance. He
wants to purchase a health insurance plan at the state exchange. The yearly
premium cost of the unsubsidized, second to lowest level Silver plan in Chris’
area is $3,570. John’s income puts him at 189 percent of the federal poverty
line, making him eligible for a premium tax credit.
Because Chris’
income is 189 percent of the FPL his maximum premium contribution is 5.79
percent of his yearly income, which is $1,273. Now to determine his tax credit
we subtract $3,570 (the amount of the unsubsidized second-lowest Silver plan)
from $1,273 (his maximum premium contribution or 8.27 percent of his annual
income).
This gives
Chris an annual tax credit of $2,297, which is paid directly to the insurance
company that Chris picks at the exchange.
Something to
keep in mind though is that the cap only applies for the premium at the Silver
level. Don’t forget that there three other levels of plans at the exchange. You
can still get the tax credit for the other plans, but the credit amount doesn’t
change.
Take for
another example that Chris wanted to purchase the Gold level plan. The premium
for that plan would be more expensive than the Silver level premium from which
his tax credit was calculated. But he would still receive the $2,297 premium
tax credit. The same goes if Chris opts for a lower cost Bronze level plan
instead of the Silver.
5. Preventative Care
Part of the philosophy
of the Affordable Care Act, so to speak, is a shift away from addressing just
the symptoms of disease and heading more toward preventing disease in the first
place or detecting it early on.
Which means
that the Affordable Care Act requires all insurers to cover preventive care
services with no cost sharing (AKA deductibles, co-pays, coinsurance, etc.).
This preventative care coverage includes things like regular checkups,
screenings for diabetes and cancer, and help losing weight for those who obese
or at risk for becoming obese.
People with
serious mental illness are at great risk for such preventable diseases. Also
included will be access to smoking cessation treatment and aids. Studies have
shown that those with a mental illness are up to 70 percent more likely to
smoke than those without.
The National
Alliance on Mental Health estimates that one in four adults experience a mental
illness during the course of a year. Altogether that’s 55.7 million people. For
a nation of 350 million that’s a pretty startling number.
Right now it’s
probably too early to tell what the ultimate impact of the Affordable Care Act
will be on mental health treatment in America. But because of legislative items
like expanding Medicaid and requiring coverage for mental health in the
exchange, things are looking pretty positive.
Michael
Cahill is Editor of the Vista Health Solutions blog. He has a degree
in Journalism from SUNY New Paltz and previously worked as a reporter for the
Poughkeepsie Journal and an editor for the Rockland County Times. Follow him on
Twitter at @VistaHealth and
@ElectronicMike
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