Tuesday, June 25, 2013

Guest Post: Five Ways the Affordable Care Act will Change Mental Health Treatment

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:

1. No more “pre-existing” conditions

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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