healthcare factoring | The Factoring Blog

An Abbreviated Guide to the Healthcare Exchanges

The online health care marketplaces have been up and (mostly) running for nearly a month, but a lack of information in many states is leaving consumers confused about their responsibilities and the coverage available to them. Below is some basic information to help you navigate the health care exchanges, and links to more information.

Do I have to use the exchange?

Consumers who do not receive health coverage through their employer or their spouse’s employer may be required to purchase insurance on the marketplace. In addition, if employer coverage does not meet the ACA’s requirements or costs more than 9.5 percent of the consumer’s income then the consumer may purchase more affordable insurance on the exchange.

There are exemptions. You are not required to purchase insurance if you:

· Would qualify for Medicaid under the expanded income limits, whether or not your state expanded coverage;

· Are not required to file a tax return;

· Receive insurance through your employer, your spouse’s employer, or other government-provided coverage (including VA benefits)

If you are a sole proprietor with no employees, you are considered an individual and are required to purchase insurance on the exchange unless you meet one of the exemption criteria. If you have fewer than 50 employees, you can purchase coverage for your company on the Small Business Health Options (SHOP) Marketplace and may qualify for tax incentives to do so.

What coverage can I purchase?

Open enrollment continues through March 2014, and plans will take effect beginning January 1, 2014. The health plans available on the marketplaces fall into one of five categories:

· Catastrophic – only available to consumers under 30 who are looking for low-cost disaster coverage

· Bronze – the lowest level of comprehensive coverage available; plans will pay up to 60 percent of costs

· Silver – “standard” coverage, with plans paying up to 70 percent of costs

· Gold – higher-level coverage, paying up to 80 percent of costs

· Platinum – the best coverage available, paying up to 90 percent of costs

As you move up through the plan levels, premiums increase but deductibles and out-of-pocket costs decrease. In addition, higher-level plans feature wider provider networks and better pharmaceutical coverage. Every plan level offers minimum essential coverage as required by the ACA.

Plans on the marketplace are required to cover at least the ten defined essential health benefits.

How do I know what’s covered?

Each exchange is required to provide a summary of included benefits, coverage, and applicable co-pays for services and medications at the generic, brand name, and specialty levels. The plans must also provide a list of in-network providers, as some providers may not accept all plans available on the marketplace.

What if I can’t afford coverage?

There are tax credits and subsidies available to a portion of the population to make health care affordable. For other low-income individuals and families, expanded Medicaid coverage will provide a free healthcare option. Consumers who are not already insured or exempt will fall into one of four categories:

· Consumers who are eligible for Medicaid benefits, whether or not the program has been expanded in your state. If it has, you will be able to enroll; if it has not, as mentioned above, you are exempt from the individual mandate.

· Consumers who are ineligible for Medicaid but earn below 100 percent of the poverty level. Unfortunately, these consumers are ineligible for the tax credit and must purchase health care at the full cost.

· Consumers who are eligible for tax credits to reduce premiums, earning between 100 and 400 percent of the poverty level. These consumers should be aware when shopping for insurance that tax credits are calculated based on the second least expensive silver plan available.

About half of the consumers who fall into this category will also be eligible for cost-sharing reductions to help with deductibles and other out-of-pocket costs. The maximum threshold for these benefits is 250 percent of the poverty level.

· Consumers who earn above 400 of the poverty level will be required to purchase insurance without assistance.

Find out if you qualify for a subsidy using Kaiser’s interactive calculator.

How does a subsidy work?

Refundable tax credits will be immediately available to eligible consumers, who can use some or all of the money to pay for premiums.

If you are self-employed or have fluctuating income, it may be wise to reserve part of your tax credit in the beginning or to overestimate your income to compensate. If you earn more than you estimated you may be required to pay back some or all of the tax credit at filing time, though you may qualify for a higher subsidy if you earn less than you projected. This is also a great reason to report changes in employment, income, or family size to the health exchange as soon as they occur.

Where do I begin?

To explore your state’s marketplace and enroll in healthcare coverage, visit www.healthcare.gov – this is the federal portal and the safest way to avoid scammers.

If poor cash flow will make it difficult for you to purchase health care, PRN Funding’s healthcare factoring programs can give you immediate access to the cash you need. Get started today to beat enrollment deadlines and secure peace of mind.

Hospitals Shed Light on the ACA Blame Game

Following Cleveland Clinic’s announcement last month of more than $300 million in budget cuts, we addressed the ongoing blame game over the Affordable Care Act in the mainstream media. Members of the mainstream media have been slow to take up the question, but this week the Plain Dealer asked the question: Is Obamacare really to blame for cuts at the Cleveland Clinic and other hospitals?

The Cleveland Clinic has previously attributed their budget decision to “a number of factors”, as have other hospital systems considering or implementing similar cuts. Now, hospitals spokespersons and health care analysts have provided a more in-depth explanation of exactly how the Affordable Care Act will affect hospital systems going forward.

Medicare

Hospitals already handle a large annual gap between the health care they provide to Medicare recipients and the reimbursement limits that the Centers for Medicare and Medicaid Services place on various services. The ACA includes an additional Medicare spending reduction of $716 billion over the next ten years. Some of the cuts are specifically directed at hospitals, such as the Hospital Readmissions Reduction Program.

Another portion of the pending cuts to hospitals is $22 billion over ten years from the Disproportionate Share Payments (DSH), which cover charity care in hospitals with large numbers of uninsured patients. Hospitals expect to compensate for this particular cut with insurance payments from previously uninsured patients who will have access to coverage through the federal health exchange. These cuts come in addition to other reductions approved by Congress since the ACA passed in 2010.

Medicaid

The ACA expanded Medicaid coverage to include patients earning up to 138 percent of the federal poverty level, in an attempt to provide an affordable health care option to parts of the population too poor to pay a monthly premium even with tax subsidies to help. To ease state concerns about the costs of expansion, the federal government will pay all new Medicaid costs through 2016, when they will scale back their coverage to 90 percent.

However, when the Supreme Court upheld the ACA’s individual mandate they failed to uphold the obligation of the states to expand their individual Medicaid programs. In states such as Ohio and North Carolina where the government has chosen not to expand, hospitals will not be able to recoup the loss of Medicaid DSH funds cut through the ACA. With fewer newly eligible Medicaid patients than projected, hospitals are forced to contain their costs through other means.

Bad debt

Hospitals must already contend with bad debt from patients who do not cover the portion of their invoices beyond coverage limits, as well as costs they swallow from providing charity care. The Medicare and Medicaid restrictions described above will contribute to this ongoing problem but interestingly enough, so will the health plans available to patients in the online marketplaces.

The affordability of health care is a complex matter that goes beyond the cost of the monthly premium. Insurers balance low premiums such as those available in Bronze or Silver plans with higher deductibles and out-of-pocket costs, meaning that a patient who seeks care at the hospital will end up with a higher portion of the bill once that care is provided. As much as a third of uncollectible hospital bills are estimated to belong to patients with health care.

Still, hospitals are optimistic that higher numbers of insured patients will create a net gain, as they will be able to reduce their bad debt expenses for uninsured patients and will instead receive payment for at least part of services provided directly from the insurer.

The Cleveland Clinic is one large example of how the Affordable Care Act may affect hospital operations, yet they also offer an important caveat against framing the discussion of other facilities’ budget decisions solely within the context of the ACA.

If you provide services to a hospital or medical facility, healthcare factoring can help you maintain a positive cash flow without falling victim to uncertain hospital payment terms. PRN Funding offers a variety of healthcare factoring programs designed to meet the unique needs of healthcare vendors. The application process is fast and easy – contact us to start today.

ACA: Updates, Delays, and Deadlines You Should Know

A number of delays have plagued the implementation of the Affordable Care Act, and new deadlines have been established. Following is a brief rundown of delays and deadlines to keep your understanding of the ACA up to date.

Deadlines

Reporting employee status: Employers must begin to collect information about their employees’ status over a 12-month period of their choosing in order to estimate their tax liability when the employer mandate takes effect next year (see Delays, below). Beginning in 2015, employers subject to the mandate will be required to offer coverage to employees who work full-time or pay the corresponding penalty.

Marketplace notification: Employers subject to the FLSA should have notified their employees of available health care options on the health insurance exchanges by October 1, the enrollment start date. If you haven’t yet notified your employees, do so ASAP.

Summary of Benefits: Employees must receive a summary of their provided benefits no later than 30 days before the beginning of the plan year. The summary must indicate whether coverage meets the minimum essential standard established by the ACA.

Delays

Small Business Health Options Program (SHOP) marketplaces: Originally slated to roll out with the individual marketplaces on October 1, the federal government delayed the launch of the SHOP marketplaces to November 1. Plans purchased on the exchange will still begin January 1, and small businesses that purchase their plans through brokers or other means will not be affected.

In addition, the marketplaces will have an additional year to offer a la carte plan options, in which businesses may choose individual coverage for their employees within an overall package.

Employer Mandate: Companies employing more than 50 full-time employees now have until 2015 to provide minimum essential coverage before they are subject to the $2,000-$3,000 per employee tax penalty for noncompliance.

Out-of-Pocket Limits: Some insurance plans will not be subject to consumer out-of-pocket limits ($6,350 for an individual/$12,700 for a family) until 2015. During the delay period, employers who offer separate plans for care and pharmacy benefits will be allowed to maintain separate limits for each plan, and plans that do not have a limit will not be required to implement one.

Update on the Individual Marketplaces

Technological issues that crippled several state exchanges soon after their launch have been resolved, leading to tens of thousands of new enrollments during the first week of operations nationwide. In the meantime, federal officials have acknowledged the need for design and server updates to the federal exchange at healthcare.gov to handle the high levels of traffic and make the experience more user-friendly.

PRN Funding’s healthcare factoring programs can provide the cash flow for your company to effectively fulfill its healthcare responsibilities under the ACA. Contact us to learn more.