Questions & Answers about Physician Concerns on Affordable Care Act Implementation
- Where can I learn the basics of the law’s coverage provisions?
- I run a small practice. Are there any resources that will help me buy coverage for my employees?
- My staff already has trouble collecting co-pays and deductibles from patients. Is the law going to make this problem worse?
- Will my claims be paid if a patient with Marketplace-based coverage doesn’t pay their premium and loses their coverage?
- I’ve heard that premium rates are really high because of Obamacare. Are patients even going to be able to afford coverage?
- I’ve heard that some people have been dropped from their existing insurance plan because of Obamacare. I thought people could keep their insurance plan.
- Will patients be able to check to see if I am in a marketplace-based plan’s network before signing up?
- How will my practice know if it is included in a Marketplace-based health plan’s network?
- Will the medications my patients are taking be covered by a marketplace plan?
- My practice can’t handle any more patients. Does the law require me to see patients with marketplace-based coverage?
- What happens if employers start dropping their insurance and force their employees to buy marketplace-based insurance? Will my practice have to pay a fine if it is unable to provide health insurance to employees?
- Are there resources available to me to help answer questions from my patients about the ACA, and get them help in understanding and enrolling in the plans offered through the marketplaces?
- I’m hearing about problems with the federally-run marketplaces and people unable to sign up for coverage on the healthcare.gov website. Does the website work? When will the website be running smoothly? Will I be able to sign up for health insurance coverage in time to avoid facing a penalty?
- I don’t support “Obamacare” so why should I help my patients sign up for something I think will be bad for them and the country?
1. Where can I learn the basics of the law’s coverage provisions?
ACP has developed an Affordable Care Act Outreach and Enrollment campaign that will provide members with information on the law's key coverage provisions and where patients can go for help. Posters, contact information and other materials are also available to promote health coverage to your patients.
- Doctors can even earn CME/CE credits for learning more about the law: Medscape CME
- The U.S. Department of Health and Human Services www.healthcare.gov website will serve as the access point to federally-run marketplaces and also provide links to resources on state-operated marketplaces. (The ACA left it up to the states to decide if they wanted to operate their own marketplace, partner with the federal government to operate it, or let the federal government operate it for them).
- Marketplace.cms.gov offers posters, fact sheets, and videos on health reform.
2. I run a small practice. Are there any resources that will help me buy coverage for my employees?
Small businesses, defined as being up to 50 full-time equivalent (FTE) employees (100 in some states), can shop for and purchase health insurance for their employees through their state’s SHOP marketplace. Similar to the individual marketplace, the SHOP will enable employers to make apples to apples comparisons of qualified health plans and pick one that meets their needs and budget. Businesses with up to 25 FTEs and an average annual employee salary of up to $50,000 are eligible for a sliding scale tax credit to purchase health insurance for their employees. The qualifying small business must also pay at least 50% of full-time employees’ premium costs. Eligible employers may access the tax credit now. Beginning in 2014, the amount of the credit grows to a maximum of 50% of the for-profit employer’s health insurance contribution, and 35% for tax-exempt entities.
How do qualifying small business owners, e.g., physicians who qualify, claim the tax credit?
The definition of “business owner” includes a shareholder owning more than 2 percent of an “S” corporation, a sole proprietor, a partner in a partnership, an owner of more than 5 percent of other businesses, or a family member or dependent of such an individual. Additionally, an owner would not count as an employee when calculating the number of full-time employees. So, if a physician is also the owner of their practice, their salary would not be counted when determining if their firm qualifies for the small business tax credit. The salary of a physician employed by a practice would be considered if they do not meet the above criteria (partner in a partnership, sole proprietor, etc.). Employers (other than tax-exempt employers) with no taxable income for the year cannot use the credit for that year since it is applied to the employer’s income tax liability. However, the IRS notes that an unused health insurance credit is considered a general business credit and can be applied to be carried back one year (excepting 2010 credits) and carried forward up to 20 years. It is unclear if physicians who claim business income as personal income for tax purposes will be eligible for the credit. Physicians are encouraged to consult their financial advisor to determine if their practice is eligible for the small business tax credit.
Online enrollment through the federally-facilitated SHOP marketplace will be available starting in November 2014. In the meantime, small businesses can buy coverage through insurance agents and brokers or directly through health insurers. More information can be found here.
Employer contributions towards employees’ individual market health insurance premiums
Some small employers have considered dropping their group health insurance and providing their employees a stipend or reimbursement to help them purchase individual market insurance. The ACA does not bar employers from providing such financial assistance, but it may be taxed.. The federal government has clarified that funds provided through a tax-advantaged Health Reimbursement Arrangement or Premium Reimbursement Account cannot be used to help employees buy individual market health insurance through or outside of the marketplace. Such plans can be used to complement group health insurance coverage that adheres to the ACA’s prohibition on annual dollar limits for essential health benefits and the preventive services coverage requirement. Small physician practices may find that providing their employees with funding to buy individual market insurance is a viable option, but a few points should be considered:
- The ACA provides premiums tax credits to individuals who do not have an offer of affordable and comprehensive job-based insurance and meet the income thresholds. Practices should be aware of the eligibility requirements for premium tax credits for marketplace-based insurance. Eligibility information can be found here. Even with the ACA’s premium tax credits, employees may end up with higher premiums than employer-based group health insurance. Practices should also consider how any additional premium-offsetting income would affect employees’ eligibility status for tax credits to purchase marketplace-based insurance.
- Employees cannot receive tax credits to purchase marketplace-based insurance if they have an offer of job-based health insurance that meets affordability (i.e., employee contribution is under 9.5% of household income for self-only coverage) and comprehensiveness (insurance has an actuarial value of at least 60%) guidelines. If a practice is considering transitioning their employees to the individual market and providing a taxable contribution towards their health costs, then they would need to terminate existing group coverage in sufficient time to permit their employees to enroll in marketplace-based coverage.
- As stated above, stand-alone HRAs and PRAs cannot be used to provide pre-tax premium assistance for the purchase of individual market health insurance inside or outside of the marketplace. So if a practice is considering increasing their employee’s income to help offset the cost of individual health insurance premiums, it should carefully consider how much of a wage increase is needed to ensure that premiums are affordable.
- Employers receive a tax break for providing group insurance to their employees. Practices should consider the financial impact of losing such a tax advantage if group insurance is terminated.
- Remember that starting in 2015, employers with over 50 full-time equivalent employees will be subject to a tax penalty if they do not offer affordable, comprehensive health insurance and their employees receive tax credits to purchase marketplace-based insurance. More information on the employer penalty can be found here.
- Consult your tax or financial advisor to determine the best option for your practice.
For more information on health insurance options for small businesses, consult this guide from Small Business Majority.
Visit this page to find out if you qualify for small business health insurance tax credits.
3. My staff already has trouble collecting co-pays and deductibles from patients. Is the law going to make this problem worse?
It is estimated that the law will reduce the number of people without health insurance by 25 million by the year 2023. New insurance regulations will cap cost-sharing and mandate minimum benefits for most health plans. Shopping for, and enrolling in, health insurance will eventually be less complicated. However, the new system will undoubtedly pose challenges to physicians and other health care providers. Many of the currently uninsured and newly insured may not understand health coverage concepts like deductibles and coinsurance, leading to cost-sharing collection problems; the existing supply of providers may be inadequate to handle the newly-insured; patient movement between health plans (churning) may affect care continuity; and marketplace viability may be undermined if healthy individuals fail to enroll in sufficient numbers.
However, physicians can smooth the transition by educating themselves about the law’s coverage provisions and directing patients to Navigators and other consumer assistance resources.
4. Will my claims be paid if a patient with Marketplace-based coverage doesn’t pay their premium and loses their coverage?
Only if the service occurs in the first month that the enrollee enters the 3-month grace period before coverage is terminated. During months two and three of the grace period, insurers may pend claims for services provided during that period; if the patient’s coverage is terminated, the insurer is not obligated to pay claims for services provided during the final 2 months of the grace period. The federal regulations state that insurers are required to notify providers that the patient has entered the grace period and that claims may go unpaid for services provided during final 60 days.
This is a potential problem, especially because it’s unclear how quickly insurers will alert physicians about the grace period. To prevent any unpaid claims, staff should verify each patient’s health coverage status to ensure they are in good standing.
5. I’ve heard that premium rates are really high because of Obamacare. Are patients even going to be able to afford coverage?
Opponents of the law claim that it will create “premium rate shock” in the market, where premiums will be much higher than they are in the existing market. However the evidence suggests that the premiums that have been approved for plans offered by the marketplaces on average are considerably lower than forecasted, see this article. In many states, young adults are able to purchase comprehensive health insurance with monthly premiums at $50 and below.
In some cases and for some people, though, premiums may be higher than what they are currently paying in the individual insurance market. Generally speaking, younger and healthier persons will pay a higher premium, and older and less healthy people, a lower premium than they may not be paying to buy coverage in the individual insurance market. However, one shouldn’t compare new plans to existing plans offered on the existing individual and small business markets because they will be very different. Starting in 2014, all plans will have to offer minimum benefits, are prohibited from denying coverage based on pre-existing conditions, and are prevented from applying exceedingly high cost-sharing requirements.
The current market varies widely depending on state regulations. A few states currently require insurers to sell plans to all applicants, even those who have serious health problems. Premiums in these states are currently very high and premiums under the ACA will likely be lower as more healthy people enter the market. Other states have limited constraints on cost-sharing, benefits and other plan characteristics (for instance, an individual market plan in Vermont has a deductible of $100,000), and allow premiums to vary based on health status. The ACA however, bars medical underwriting based on health status, although plans can vary premiums based on some factors like age and tobacco use. Premiums for young people may rise, while premiums for older/sicker people may be lower. Economist Uwe Reinhardt says, “Less frequently noted in commentaries about the law — certainly among its critics — is that the law is likely to bring what I call ‘premium joy’ to individuals and families with health problems. Many such people simply could not afford the high, medically underwritten premiums they were quoted in the traditional nongroup market. This joy will be shared by high-risk applicants who were refused coverage by the insurer, along with people now in high-risk pools.”
So, new plan premiums may appear to be higher in these states, but again, the new plans being offered are incomparable because they are more comprehensive and must be offered to all applicants.
One important note is that most people buying health insurance through the marketplaces will qualify for premium and cost-sharing financial assistance, lowering the out-of-pocket cost of coverage and making coverage more affordable. So, the true cost to an eligible enrollee will consist of the premium for the level of coverage they choose (bronze, silver, gold or platinum from a plan offered through their state’s marketplace minus the tax credit subsidy that will be available to them based on their income and other factors used to calculate the subsidy. The Kaiser Family Foundation estimates that “about 48 percent of adults currently purchasing coverage for themselves will be eligible for subsidies next year – and those subsidies will average $5,548 per family.” In addition, the ACA limits out-of-pocket costs, including deductibles and co-payments, to no more than $6,350 for an individual and $12,700 for a family.
6. I’ve heard that some people have been dropped from their existing insurance plan because of Obamacare. I thought people could keep their insurance plan.
Before the Affordable Care Act, individuals who needed to purchase insurance on their own were often denied coverage because their age, or because they had a pre-existing condition. If they were able to buy insurance, it was often expensive and provided bare-bones coverage. The ACA sought to stabilize the volatile individual insurance market by mandating coverage of essential benefits, limiting some cost-sharing and requiring insurers to cover all applicants, regardless of health status. However, plans that existed before March 23, 2010 – the day the ACA was signed into law – could be “grandfathered” and be exempt from the new regulations.
Following passage of the ACA, regulatory language placed limits on how much an insurer could change a grandfathered plan and still be exempt from the ACA’s market regulations. For instance, if a plan eliminated all or most benefits to diagnose or treat a particular condition, it would lose its grandfather status and would be required to meet the ACA’s insurance requirements starting in 2014. Insurance plan contracts are written on a 12-month basis and insurers often change plan terms from year to year, altering the benefits covered and the amount of cost-sharing required of enrollees. Therefore, some people may have found their coverage was terminated because their plan’s contract had expired or their plan had changed so it no longer met the definition of “grandfathered” and had to be written to meet the insurance regulations established in the ACA.
As with the issue of rate shock, those who had bare-bones individual insurance coverage that does not meet the ACA’s requirements relating to 10 categories of minimum essential benefits, limits on out of pocket costs, guaranteed renewability, and prohibitions on excluding or charging more to people with pre-existing conditions and are now required to purchase comprehensive Marketplace-based qualified health plan coverage may end up paying higher premiums. In many cases, they will be getting better benefits and most importantly, can be assured that they will no longer be denied coverage because they have a pre-existing condition. Further, many will be eligible for premium tax credits that can only be used to purchase Marketplace-based health coverage. For more information on this issue, see this article from the Center for Health Insurance Reforms.
On November 14, 2013, President Obama announced that health insurance issuers may extend for an additional year individual and small group health coverage plans that were active on October 1, 2013 but subject to termination or cancellation because they would not meet the ACA’s insurance reforms. If participating, health insurers must provide a written notice to enrollees who had or would have had their plans terminated explaining that their plan is subject to renewal for at least another plan year, is not subject to the ACA’s insurance market protections, their potential right to shop for and enroll in qualified health plans through their state’s marketplace, how to access the health insurance marketplace, and other information. The policy may not be implemented in all states, however, since some prohibit “early renewals” of insurance plans.
7. Will patients be able to check to see if I am in a marketplace-based plan’s network before signing up?
Eventually, but in many of the marketplaces, and in the federally administered www.healthcare.gov enrollment portal, patients currently are unable to search an up-to-date participating provider network for each plan offered It is expected that this feature will be added some time in the future. The ACA requires that health plans make a provider directory available to provide information on which providers are in the plan’s network. Until this is addressed, patients can contact the health plan directly or their physician’s office staff to see if their preferred physician or hospital is listed as a participating provider and considered in-network before signing up for a plan.
8. How will my practice know if it is included in a Marketplace-based health plan’s network?
Some physicians are reporting that they’re being included in the networks of marketplace-based insurance plans without their knowledge or consent. A survey of New York doctors found that 40% were not aware that they were participating in an insurer’s marketplace-based plan network. In some cases, this may be due to the inclusion of an all-products clause in the contract between the physician and health insurer. All-products clauses require that a physician accept all plans offered by the health insurer. For instance, a Blue Cross Blue Shield (BCBS) contract may include language that requires contracted physicians to serve all patients covered in all of the plans it offers, including marketplace-based BCBS products. Such clauses existed before the Affordable Care Act, and some states have laws prohibiting or limiting their use. Some insurance plans have not yet finalized their provider networks, making it difficult for patients to shop for and choose the insurance that meets their benefit needs and provider preferences. Physicians find it difficult to advise their patients on whether they’re included in a plan’s network. Physicians are encouraged to scrutinize insurer contracts for all-product clause language and consider their practice’s capacity and existing patient panel prior to entering any new agreement with the insurer. Further, practices should be proactive and verify with insurers whether or not they are included in their marketplace-based insurance networks. If a plan’s network has not yet been finalized and is not subject to an all-products clause, the practice can then make the decision whether it wants to participate in the plan’s network or opt out.
Additionally, some insurers are forming limited networks of providers in an effort to curb costs. The ACA and state network rules are in place to ensure that plan networks are adequate to meet patient need. Federal regulations mandate that a plan’s network be sufficient in number and types of providers to assure that services are accessible without unreasonable delay. States may have their own network adequacy requirements that compliment federal rules. Further, marketplace-based plans must ensure that “essential community providers” that serve predominately low-income, medically-underserved individuals are available in their network.
9. Will the medications my patients are taking be covered by a marketplace plan?
Prescription drug coverage is considered an essential health benefit that all qualified health plans offered through the marketplace are required to cover. However, there can be variation among plans as to which drugs are covered and which ones are not; a drug covered in one plan may not be covered in another. Qualified health plans are required to cover at least the greater of one drug in every U.S. Pharmacopeia category and class or the same number of drugs in each category and class as the state’s essential health benefit benchmark plan. State benchmark plans can be found here. Health plans must also have procedures in place to ensure that enrollees have access to clinically appropriate drugs prescribed by a provider but not included in the health plan’s drug formulary. It is best for the patient to review the prescription coverage offered by a plan in consultation with their doctor prior to purchasing the plan to ensure it covers their medications. If the patient is still unsure if their specific medications are covered, they should contact the plan directly to inquire about coverage.
10. My practice can’t handle any more patients. Does the law require me to see patients with marketplace-based coverage?
No. Physicians are not obligated to contract with commercial plans or public programs like Medicaid and Medicare. However, health plans offered through the marketplaces are required to meet “network adequacy standards” to ensure that there are a sufficient number of physicians and other clinicians available for their plan enrollees. In addition, the ACA includes a number of programs to increase the supply of primary care physicians including: increasing Medicaid payment rates to no less than Medicare’s in 2013-14; providing a 10% bonus Medicare bonus payment for office visits and other evaluation and management services provided by primary care physicians, which went into effect in 2010 and will continue through 2015; funding a near-tripling of the number of physicians who have received scholarships or loan forgiveness under the National Health Services Corps; increased funding for Community Health Centers; redistribution of unused residency positions to primary care residencies; and funding for innovative primary care delivery models including Patient-Centered Medical Homes. Team-based care arrangements—where physicians, advanced practice nurses, physician assistants, and health professionals work together to ensure that patients have access to the care they need—can also help meet the growing demand for primary care. Additional reforms will be needed, though, to alleviate shortages in primary care and other specialties.
11. What happens if employers start dropping their insurance and force their employees to buy marketplace-based insurance? Will my practice have to pay a fine if it is unable to provide health insurance to employees?
There’s limited evidence that employers will react to the ACA by dropping health insurance for their employees. It is true that the percentage of employers offering insurance benefits to their workers is in decline, but that was a trend long before the ACA ever became law. The vast majority of people will still receive their coverage from their employer and for the most part will remain unaffected by the law (except for some benefits, such as caps on out-of-pocket spending). Employer-based coverage rates have remained steady in Massachusetts since its health reform effort. Large employers (over 50 full-time equivalent employees) are required to provide comprehensive insurance to their employees or pay a fine, although this provision has been delayed for a year. Generally, a large employer that does not offer employee health insurance will have to pay $2,000 for each employee who receives a premium tax credit to buy marketplace-based coverage. Firms that do offer coverage but have at least one full-time employee receiving premium tax credits to purchase Marketplace-based insurance will be required to pay the lesser of $3,000 for each credit-receiving employee or $2,000 for each full-time employee. Small employers (under 50 full-time equivalent employees) are not subject to fines for not supplying coverage to their employees. Employers who are most likely to shift their employees to the marketplaces are in low-wage sectors, but estimates vary on what the extent will be. The Congressional Budget Office predicts 7 million fewer workers will have employment-based insurance in 2023 as a result of the ACA.
The vast majority of physician practices already provide health insurance benefits to their employees. Smaller physician practices may find that they have more affordable and competitive insurance options available them through the marketplaces than under the current small group insurance market. Some may even qualify for tax credit subsidies (see question #2).
12. Are there resources available to me to help answer questions from my patients about the ACA, and get them help in understanding and enrolling in the plans offered through the marketplaces?
Yes! ACP has compiled extensive resources that you use to help your patients. In addition, brochures explaining the marketplaces and other key parts of the law are available from www.healthcare.gov. Click here to see all of the resources for you and your patients that are available through ACP.
13. I’m hearing about problems with the federally-run marketplaces and people unable to sign up for coverage on the healthcare.gov website. Does the website work? When will the website be running smoothly? Will I be able to sign up for health insurance coverage in time to avoid facing a penalty?
Implementation of a law that aims to expand coverage to tens of millions of Americans and to provide better health insurance for everyone else, by its nature, is enormously complicated, and it is likely that there will be considerable public confusion and, as we saw, technical difficulties in the early stages of getting millions of persons signed up for coverage. It is not unusual for implementation of major coverage expansions to be chaotic in their initial months. When the Medicare Part D drug coverage benefits initially went into effect in 2006, many seniors were confused about the array of plans being offered to them and how to sign up. Over time, though, the confusion and initial implementation issues dissipated as seniors gained more familiarity with the benefits and as Medicare improved the program’s administration. Now, Medicare Part D is enormously popular with seniors and signing up for benefits, for the most part, is going smoothly. The same is likely to be true of the ACA’s programs.
In the days following the October 1st launch of healthcare.gov, many consumers were unable to shop for and enroll in coverage. Others reported communication glitches between the information systems needed to verify eligibility for coverage and subsidies. According to the federal government, some of the initial problems with the healthcare.gov website have been addressed. The website’s capacity has been expanded to meet traffic demands. Ninety percent of consumers are now able to get on the website and create an account. A component was also added to the website allowing visitors to browse marketplace-based plans without having to set up a user account, easing pressure on the system and making it simpler for consumers to explore their options.
The healthcare.gov website is not the only way to apply for coverage. There are still four ways that consumers can sign up for health insurance:
- Over the phone – Call center is available 24 hours a day, 7 days a week. The number is 1-800-318-2596/ TTY: 1-855-889-4325
- In-Person – find in-person assistance in your community here.
- By mail using a paper application
Visit this page for more details on how to apply.
14. I don’t support “Obamacare” so why should I help my patients sign up for something I think will be bad for them and the country?
You must make your own decision on how you will respond to questions from patients about the new law. ACP, for its part, supports the ACA’s programs to expand coverage to tens of millions of persons and provide better health insurance to everyone else. We urge all of our members to be helpful to your patients when they come to you with questions about the marketplaces, subsidies, and other benefits created by the ACA. Members who disagree with the ACA have every right to engage in the political and election processes to seek changes, but we hope that when it comes to one of your patients coming to you to seek help in understanding how they might get coverage from the marketplaces or Medicaid, you will use the practical resources available from ACP and others to make it as easy for them as possible.
ACP Policies and Recommendations
This library is a collection of ACP's Clinical Guidelines, Ethical Guidelines, Policy Statements, and copies of testimony and letters to government and non-government officials.
The ACP Advocate Blog
The ACP Advocate Newsletter
A New Proposal for Medicare Payments
November 22, 2013
- The Year-End Push for a Medicare Payment Fix
November 8, 2013
The Shutdown Ends and the Insurance Marketplace Rollout Begins
October 25, 2013