The ACA and Legal Practices (#11) / Boundary issues for program financing

September 18, 2014

health-care-lawThis is installment #12 in a series of blog postings on the Affordable Care Act (ACA) and legal practices.

The ACA has introduced new program “boundary problems” into the health care system, which continue to persist and to be challenged.

One boundary is defined by the highest-allowed income for individual eligibility for expanded Medicaid, which transitions to the lowest income allowed for purchasing subsidized private insurance through the Exchanges.

On either side of this “financial line”, the situations of individuals are quite different.

Another boundary exists where subsidies vanish for those with too much income, leaving individuals on their own to pay full premiums.

Another long-existing age-defined boundary exists between those under and over age 65, when eligibility for Medicare becomes standard.

At present, all of these boundaries are subject to pressures to “smooth out” the resultant transitions.

A number of states have been negotiating with the Department of Health and Human Services (HHS) to create different types of transitions between expanded Medicaid and private insurance purchased through Exchanges.

Arkansas, Iowa and Pennsylvania have received similar waivers for program strategies that apply funds from expanded Medicaid to the purchase of private insurance through Exchanges.

In each case, some revisions to established Medicaid regulations have been allowed.

Such waivers are supposed to be “revenue neutral”; however, the General Accounting Office (GAO) has challenged whether these variations will meet this requirement.

There are also ongoing negotiations as to what types of cost sharing and work-related requirements will be allowed by HHS as part of such waivers.

Michigan, Indiana and Utah are all exploring waivers with various constraints on eligibility.

It is not clear what penalties will be associated with the failure by eligible persons to meet all requirements.

At the same time, the long-established age-65 Medicare boundary to determine eligibility is under different pressures. A way around the age requirement is for individuals to be found disabled by Social Security standards, which leads to Medicare eligibility two years later.

Unsurprisingly, the disability rolls are expanding rapidly, also blurring this boundary.

In general terms, it may be proposed that programs with various program boundaries are likely to experience pressures to modify the transitions. One result may be that programs which start out as separate funding strategies for health care may, over time, tend to blur in their differences. As a result, possible evolution may be under way toward more comprehensive programs that extend beyond their initial target populations.

Many individuals may seek attorney assistance to sort out their situations, as programs evolve. In some circumstances, such advice may be sought as a part of more general legal planning concerns.

More information about implementation of the Affordable Care Act and associated legal practice issues may be found in recent books on the ACA and on the health care system, other postings to this blog, and on the ACA Blog, also written by the author of this series.