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This curious question arose when one of my health insurance clients called me to say me his doctor didn’t take Obamacare.

It’s a curious statement because although we talk about Obamacare as if it’s insurance, it really isn’t.  It’s a federal statute entitled the Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act (ACA).  Obamacare is the common colloquialism used to describe the law.  Whatever you want to call it, the crux of the law is that everyone (with a few exceptions) has to have a Qualified Healthcare Plan, that is, health insurance that provides Minimum Essential Coverage.  Leaving out large group plans (which have different rules) the law defines a list of things that health insurance must cover.

So when a doctor’s office says “we don’t take Obamacare,” they are saying “we don’t take health insurance.”  That might be literally true – there are some practices which have gone cash only, but they certainly don’t seem to be in the majority.  Past experience however, had taught me that physicians’ offices use the term Obamacare to mean a patient getting a subsidy (an Advance Premium Tax Credit) to help pay for their health insurance.

There is good reason to be more cautious of subsidized patients because the law (whatever you want to call it) allows a 90 day grace period to pay their part of the premium.  Patients who have to pay all of their premium only get a 30 day grace period.

Grace periods have been around for a very long time.  Traditionally the idea was that if you don’t pay your premium on time you’ve got 30 days to get a check to the insurance company.  If you get sick during the 30 days, the insurance company has to pay the bill but can deduct the premium from the amount paid.

It would be too simple (and give insurance companies apoplexy) if the PPACA/ACA/Obamacare simply extended the 30 days to 90 and leave it at that.  Instead, it allows insurance companies to “pend” claims for treatment provided on days 31 through 90 and see whether or not the patient coughs up the premium.  If day 90 comes around and still no premium check, the health insurance company doesn’t have to pay and the doctor gets stiffed.  Since a doctor’s practice is, at its heart, a business, they can’t afford this to happen too many times.

In the case of my client who had been turned away, I didn’t think we had a problem since he was not a subsidized patient.   I suggested a call to the office of the doctor in question and my client set up a three way with the lady in office who works with insurance company claim departments.  She, however, was adamant that his policy is “Obamacare” and they were not going to accept it.  Moreover she insisted on calling the claims department of the insurance company in question and asking them to confirm that the policy is (or is not) Obamacare – not a good development because if you ask your average health insurance company employee “is the policy you issued an Obamacare plan” the question they will hear is “is this a Qualified Healthcare Plan.”  The answer of course was “yes!” because no-one at the insurance company is going to admit that the company issued a policy that did not comply with the law.  The nicety of the 90 day vs. the 30 day grace period does not come into play.

Listening to the conversation, however, the light began to dawn.  Not only did the doctor’s office not understand the difference between a subsidized or a non-subsidized patient, there was no way of telling one from the other anyway.  The insurance cards issued by most companies don’t make the distinction.  Some companies (Humana for example) only issue policies here in DFW “off exchange,” meaning that the insurance company does not sell through healthcare.gov.  In those cases a doctor’s office can be sure that the patient is not subsidized, and in fact the doctor’s office in question told me “Humana is not Obamacare.”  But it is – we were just using (or misusing) the term differently.

After some research I found that the American Medical Association (AMA) is fully aware of the problem and has developed a step by step guide to the ACA grace period, listing the questions a practice needs to ask a health insurance company about how their grace period works.  The guide is unfortunately password protected, but if you experience the same problem as the client in this story, you might let the doctor’s office know that the guide exists.

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Allen Health Insurance Agent On Proposed ACA Changes

Sunday, June 5, 2016 @ 01:06 PM
Author: Peter Young

Until last month Republicans have insisted on complete repeal of health insurance reform.  Now it seems there might be change afoot.

Late last month two Republicans, Representative Pete Sessions R-Texas, and Senator Bill Cassidy. R-La., unveiled a bill modestly titled the World’s Greatest Health Plan (HR 5284.)  The bill does not seek to repeal and replace Obamacare, but makes major modifications: eliminating the coverage mandates, deregulating and “denationalizing” the exchange system, and reviving John McCain’s health insurance tax credit for people who drop their Exchange coverage and buy health insurance ‘Off Exchange.”

The bill would also get rid of existing barriers to letting employers contribute to the cost of employees’ individual health insurance (something that was prohibited in Texas before Obamacare) and create a limited-benefit plan for relatively low-income consumers.  The latter proposal should help resolve the problem of deductibles so high that consumers can’t afford to use them. Interestingly, the bill would limit the medical debt liability of patients with the limited-benefit plans who have exhausted their benefits – a problem that the original law never addressed – and would force ER’s to disclose how much services cost.

Some of the popular consumer protection goodies are retained, like the ban on annual and lifetime benefits limits; the provision that allows children to stay on parents’ coverage to age 26; and the “ban on discrimination in the sale or pricing of health coverage related to personal health status,” i.e. the requirement that preexisting conditions be covered.  The penalty for people who don’t buy health insurance when they are eligible however, would be laughably inadequate. For example, a person who’s been without coverage for a whole year and now decides they want in would have to pay 20% more than the standard rate.  Given that Blue Cross is currently looking for a 60% rate increase on all individual policies for 2017, a mere 20% is just plain silly.

Consumers who (in Mr. Sessions’ words) “like their Obamacare, will be able to keep it” but if they prefer the tax credit the health insurance tax credit program would provide an average of $2,500 per adult and $1,500 per child. So the Obamacare public exchange system stays, although states would be allowed to change rules such as enrollment period dates and age-based pricing differences.

None of the press releases I reviewed gave any indication as to how health insurance companies have reacted to the proposal but given the inadequacy of the penalties and the complexity of adding the new proposals on top of the what is retained of the old law, the industry’s reaction is unlikely to be positive.  Companies that have indicated they will withdraw from the individual health insurance market are unlikely to be enticed back by this bill, but then the bill is unlikely to go far during the waning months of the Obama presidency.  Instead Messrs.Sessions and Cassidy are hoping they will catch the attention of presidential candidates and shape future legislation.

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