Physical Therapy Management & Physical Therapy Documentation

Health Insurance Exchange 101 – The Backbone of Obamacare

by Nitin Chhoda PT, DPT | Sep 28, 2013 | Healthcare Practice Management, Medical Billing, Physical Therapy Billing, Physical Therapy Management

Beginning Jan. 1, 2014, everyone in the U.S. will be required to have some type of medical coverage as part of the Affordable Health Care Act, otherwise known as Obamacare. Coverage can be in the form of Medicare, Medicaid or a typical health insurance policy.

Consumers can purchase coverage through the Health Insurance Marketplace beginning Oct. 1, 2013.

The Marketplace is the backbone of Obamacare, designed to provide four levels of coverage at levels the federal government deems as affordable.

As part of the Act, individuals buying insurance through the Marketplace may be eligible for federal subsidies to help them pay for coverage.

Federal dollars are allotted based on income.

Who Should Enroll?

Open enrollment through the Health Insurance Marketplace runs from Oct. 1, 2013 to March 31, 2014. Patients who don’t qualify for Medicaid, Medicare and CHIP, or who don’t have an employer-based insurance plan, qualify for enrollment.

Individuals who haven’t enrolled in a plan by Jan. 1, 2014 or have received an exemption, will be assessed a fee when they file their income tax return.

Employees who have insurance through the workplace can’t use the Marketplace unless the cost of their insurance exceeds 9.5 percent of their income, or if the plan doesn’t offer the minimum services mandated by Obamacare.

Individuals can choose not to buy insurance and pay the Individual Mandate Tax (IMT) instead.

In 2014, the IMT is $95 per adult and $47.50 per child, or 1 percent of income, whichever is greater. The penalty increases to $325 or 2 percent of the family income in 2015. In 2016, the penalty will be $695 per adult and $347.50 per child or 2.5 percent of the total income.

Fines are based on a cost-of-living formula after 2016.

Preparation And Documentation

To create an account and sign up, consumers will need to provide some basic information including:

Social Security number or document number for legal immigrants;
Employer and income information for each household member;
Policy numbers for any current plan(s) covering household members;
A completed Employer Coverage Tool, available on the site, that lists all job-based plans for which household members are eligible.

Plans And Options

Patients can purchase four types of policies through the Marketplace – Bronze, Silver, Gold and Platinum. The plans pay 60 percent, 70 percent, 80 percent and 90 percent, respectively, of healthcare costs.

Bronze and Silver plan costs are capped at 9.5 percent of income. Gold and Platinum plans are capped at 12 percent of income. High-end plans may be subject to an excise tax of 40 percent of the total cost.

Visitors to the Marketplace can compare policies, deductibles, co-pays and costs. The online calculator allows consumers to find the plan that best fits their needs. They’ll be able to determine if they qualify for a federal subsidy to help them pay for Marketplace insurance and how to apply.

The Marketplace also offers “catastrophic” plans for people age 30 and low-income consumers, but different terms and rules apply and individuals won’t be eligible for subsidies and credits.

Affordable Versus Cheaper

It’s important to remember that affordable doesn’t necessarily mean cheaper. There are no restrictions on how much insurance carriers can charge for coverage and other options may be more cost effective.

Families with incomes less than 15,302 will qualify for Medicaid.

Some may qualify for assistance with out-of-pocket expenses for government programs including Medicaid, Medicare and the Children’s Health Insurance Plan.

Obamacare dictates that each person must have insurance and the Health Insurance Marketplace offers plans to accommodate the law. Patients should evaluate each plan carefully and examine all their available options so they can make an informed decision that’s best for everyone in the family.

Patient and Employer Penalties with Obamacare

by Nitin Chhoda PT, DPT | Sep 27, 2013 | Healthcare Practice Management, Medical Billing, Physical Therapy Billing, Physical Therapy Documentation, Physical Therapy Management

The Affordable Health Care Act, known as Obamacare, requires all Americans to have healthcare insurance. Employers that don’t offer insurance and those that refuse to purchase coverage will get hit where it hurts them the most – their wallet.

Obamacare employs fines as an incentive to persuade patients and employers to comply with the legislation.

People will be required to report their insurance coverage, or lack thereof, through their annual income tax returns.

Penalties will be levied on individuals without health coverage, as well as business owners that don’t provide it.

The Individual Mandate Tax

With the Individual Mandate Tax (IMT), in 2014, the fine amounts to $95 per adult and $47.50 per child, or 1 percent of income, whichever is greater. The penalty increases to $325 or 2 percent of the family income in 2015.

By 2016 penalties reach $695 per adult and $347.50 per child or 2.5 percent of the total income. Fines are based on a cost-of-living formula after 2016.

If the filer doesn’t pay the IMT, it’s carried over to the next year and interest continues to accrue on the total. Some will qualify for an exemption from the IMT. The Congressional Budget Office estimates that 30 million Americans will lack coverage in 2016 and 80 percent of that number will qualify for some type of relief.

Those qualifying for an exemption include inmates, people with religion-based objections, and members of Indian tribes.

Also exempt are individuals who can’t find an affordable plan, anyone that isn’t required to file a tax return, and those who are temporarily unemployed.

People living in states that have chosen not to expand Medicaid coverage and anyone paying more than 8 percent of their income for health insurance will avoid the IMT.

The Employer Mandate

Obamacare refers to the Employer Mandate penalty as a “shared responsibility fee.” The fines for businesses not offering insurance will be $2,000 per person, per year.

Companies that contribute 50 percent toward an employee’s insurance premium are eligible for tax credits of up to 35 percent of their contribution, provided the worker makes $50,000 or less per year and is a full-time employee.

The Employer Mandate affects approximately 5.8 million companies throughout the nation.

Business owners with 50 or more employees, or part-time equivalents, are required to offer their workers insurance.

Those that don’t will be assessed a fine. Full-time is defined as 30 or more hours a week.

Businesses don’t have to pay the fine for the first 30 employees.

The provision, set to take effect in 2014, has been delayed until 2015 to work out details on information reporting requirements for businesses.

The mandate stipulates that employer-provided healthcare must be affordable (no more than 9.5 percent of the employee’s wages.)

Employers offering unaffordable insurance, as defined by Obamacare, will be assessed a $3,000 penalty for each employee who receives the federal subsidy to purchase insurance through the Marketplace.

Policies must provide coverage for the employee’s children age 26 and younger. Plans do not have to offer benefits for spouses. The policy must provide “minimum value,” defined as paying at least 60 percent of the cost of covered services, including deductibles, co-pays and premiums.

The IMT is an incentive for individuals to purchase insurance and enforced through fines.

The Employer Mandate utilizes financial penalties as an inducement for businesses to provide insurance or be assessed costly fines that will substantially affect profits. Obamacare places both workers and employers in the same position – get insurance or face the fines.

How Will Obamacare Affect Those with Employer-Based Insurance?

by Nitin Chhoda PT, DPT | Sep 20, 2013 | Electronic Medical Records, Healthcare Practice Management, Physical Therapy Documentation, Physical Therapy Management

The good news for individuals with employer-based insurance is that under the Affordable Health Care Act, their policies must include a variety of services ranging from hospitalization to free preventative services. The downside is that many employers have determined maintaining insurance for their workers is too expensive and they’re choosing to eliminate coverage.

Also known as Obamacare, the Act limits the amount individuals can save in their Flexible Spending Accounts (FSA) to $2,500 and places restrictions on what the funds can be used to purchase.

Penalties for buying forbidden items will increase to 20 percent and a huge influx of new patients could overwhelm existing clinicians, degrading the level of care provided and access to practitioners.

Where Coverage Comes From

Business owners of both large and small firms are choosing to drop employee health coverage in favor of paying the government-mandated $2,000 fine per person.

To obtain healthcare, employees will be forced to seek coverage through the Insurance Marketplace.

Individuals can begin signing up Oct. 1, 2013 and policies will go into effect Jan. 1, 2014. Some applicants will qualify for government subsidies to help pay for insurance, based on their income.

Unions have been granted a temporary waiver, but it expires in 2014. Union employees are already feeling the financial pain of higher costs and more out-of-pocket expenses. If employers drop employee coverage, workers will have to purchase coverage through the Marketplace.

Employees with coverage known as Mini-Meds, popular with the fast food industry, will be seeking insurance through the Marketplace, as Mini-Meds don’t meet the coverage requirements under Obamacare.

Insurance companies have already increased costs in many sectors in anticipation of Obamacare implementation.

Medicaid is being expanded under Obamacare to assist those who can’t afford insurance through the Marketplace and have none through their employer. Some states have chosen not to participate in the expansion, leaving fewer options for the poor.

People age 30 and over can purchase a catastrophic plan at the Marketplace that covers 60 percent of medical costs.

Benefits and Limitations

Under Obamacare, insurance companies can’t refuse coverage due to pre-existing conditions and insurers can’t place annual or lifetime limits on coverage. Policies must offer a core group of services, from preventative care to maternity benefits. Children can also remain on parental policies until they turn 26.

Insurance companies can no longer cancel policies for frivolous reasons.

Fines and Penalties

Workers that don’t have employer-based insurance and don’t qualify for Medicaid must purchase coverage through the Marketplace. Those who don’t face financial penalties due to the Individual Mandate Tax that goes into effect Jan. 2014.

The Mandate levels fines of up to $285 on those who don’t buy insurance. The amount increases to a maximum of $2,085 in Jan. 2016.

Some groups are exempt from fines for not having insurance.

Workers who can prove Marketplace insurance is greater than 8 percent of their income can claim a financial hardship. Individuals with incomes of less than $9,350 are exempt, along with joint filers making $16,700 or less. Others will receive fines for “Cadillac” policies, based on the value of the insurance.

In the beginning of Obamacare, the public was told they wouldn’t have to give up their current insurance plans if they didn’t want to. Many workers will be doing exactly that if their employers choose to maintain profitability by not offering insurance and paying the government fines.

The Impact of Obamacare on Medicare Recipients

by Nitin Chhoda PT, DPT | Sep 19, 2013 | Electronic Medical Records, Healthcare Practice Management, Physical Therapy Documentation, Physical Therapy Management

One of the groups most affected by the Affordable Health Care Act will be seniors and the disabled receiving Medicare benefits. Medicare is being singled out for extensive financial cuts through Obamacare.

The Act requires Medicare recipients to shoulder a larger portion of their healthcare costs, offers fewer health plan options, and drastically reduces benefits paid through the Medicare Advantage program.

The Act also imposes an excise tax on medical devices that many seniors rely upon, such as hearing aids.

As reimbursements under Medicare continue to decrease, recipients are facing reduced access to physicians and longer commutes to receive services. Further cuts will be forthcoming in the future through recommendations made by the Independent Payment Advisory Board (IPAB) created by Obamacare.

Paying For Obamacare

Between now and 2022, the Congressional Budget Office (CBO) says Medicare reimbursements will be reduced by approximately $716 billion. To reduce the costs to the Medicare program, Obamacare cuts the amounts that doctors are reimbursed for their services.

Faced with drastic reductions in payments, many clinicians are preparing for early retirement, closing their practices and taking employment at hospitals.

Medicare recipients were already finding it difficult to find practitioners willing to accept Medicare patients and many physicians have indicated they will send Medicare clients elsewhere for treatment in the future.

Medicare patients are among the hardest hit by Obamacare and represent a large segment of the population who will be paying for Obamacare in a variety of ways.

Medicare Advantage Plans

Those receiving Medicare had the option receiving healthcare services through Medicare Part A and B or purchasing a Medicare Advantage plan through a private company that contracted with Medicare. The range of available plans and options will be severely curtailed through Obamacare and Medicare patients will be required to pay more out-of-pocket for healthcare services.

The changes in Medicare Advantage plans affect both seniors and the disabled of any age.

Individuals will have to set aside more of their retirement savings to cover the cost of increased healthcare costs in the future. Those already receiving benefits will have no time to prepare for the potential financial fallout and will just have to pay the higher prices.

The increases may not be significant in the beginning, but will continue over time.

Medicare recipients will have the option of purchasing additional coverage to fill in the gaps through federally mandated healthcare exchanges, now known as the healthcare marketplace. Applicants may also qualify for government subsidies to pay for their insurance plan, depending on their income.

The Impact of IPAB

The government appointed, 15-member panel known as IPAB is charged with reducing healthcare costs within Medicare. The board will examine available treatments for a wide range of medical conditions and recommend what it determines is the best treatment based on effectiveness and cost.

Clinicians and patients are concerned that IPAB recommendations will limit the availability of treatments and some procedures will only be available to the wealthy.

The Good News

Obamacare seeks to close the “donut hole” in the Medicare prescription plan by paying for a larger assortment of medications and providing discounts on prescriptions.

Under Obamacare, wellness visits and a variety of preventative services can be obtained at no cost, including vaccines, flu shots, cancer screenings and annual check-ups.

The upcoming changes for Medicare recipients will offer expanded prescription benefits and preventative services, but has the potential for drastically increased premiums and co-pays.

While seeking to provide coverage to more individuals, Obamacare may have the opposite effect. An influx of new people seeking care, fewer clinicians, and more practitioners that won’t accept Medicare patients due to reduced reimbursements could easily lead to reduced access to healthcare for all.

How Will Obamacare Affect Working Families and the Poor?

by Nitin Chhoda PT, DPT | Sep 18, 2013 | Electronic Medical Records, Healthcare Practice Management, Physical Therapy Management

Passage of the Affordable Health Care Act promised healthcare to millions of uninsured Americans who couldn’t afford it, were unable to obtain it, or didn’t qualify for other programs. The Act expanded Medicaid, called for the establishment of insurance exchanges and offered subsidies to assist families and low income wage earners purchase insurance.

Obamacare is a win-win situation for the majority of those who fall within those two groups, but according to the Congressional Budget Office (CBO), the Act still leaves an estimated 21 million without insurance.

Those individuals will continue to seek care at hospital emergency rooms and free clinics.

Essential Services and Coverage

The Act mandates that policies provide a variety of essential services, from medication and maternity benefits to mental health care. Office visits, preventative treatments, lab tests, newborn and pediatric care, hospitalization and emergency services will all be available under healthcare policies beginning in 2014.

Insurance companies can’t refuse insurance to individuals with preexisting conditions and adult children can remain on parental policies until they turn 26.

Medicaid Expansion

Families and the poor who meet income eligibility guidelines may be able to receive medical services through expanded state Medicaid programs. The Act assumed that individuals making $11,500 or less would automatically qualify for Medicaid

A ruling by the Supreme Court determined that participation in Medicaid expansion was optional. Many states chose to give up millions of dollars in federal incentives to expand Medicaid coverage.

Residents in states that don’t expand Medicaid coverage will have few choices – obtain insurance through an exchange or continue to do without medical coverage.

The Healthcare Marketplace And Subsidies

Also known as “marketplaces,” healthcare exchanges enable individuals to purchase their own healthcare coverage. Plan enrollment begins on Oct. 1, 2013, with policies going into effect on Jan. 1, 2014.

The marketplace for each state can be accessed online and buyers can choose from bronze, silver, gold and platinum coverage options, with varying premiums, deductibles and co-pays.

Some have mistakenly equated the term “affordable” with “cheap.” The Act doesn’t limit the amount that insurance companies can charge for their policies and many may discover coverage is still costly.

For those meeting federal financial guidelines, Obamacare provides subsidies to assist families and the poor purchase coverage through the exchanges.

Fines, Penalties And Stipulations

Obamacare extends healthcare to millions of new customers, but the Act also comes with built-in penalties and fines. Those who choose not to purchase insurance or can’t afford it, even with subsidies, will be assessed an income-based fine.

Financial penalties will be determined and collected through income tax returns. The government can’t place a lien against personal property, but it can take any refunds that are due.

Those with employer-offered healthcare policies won’t be able to immediately ditch them in favor of more affordable options and subsidies through state marketplaces.

Individuals that choose to give up coverage through their employer will be required to wait a set amount of time before their marketplace policy becomes active and pays for services.

The Affordable Healthcare Act is a mix of coverage options, subsidies and penalties for families and the poor. It offers essential healthcare services through expanded Medicaid programs and state marketplaces, provides financial incentives to purchase through subsidies, and penalizes anyone who doesn’t have coverage.

Obamacare promises a nation where the majority of citizens have access to healthcare, paid for by those in more financially tenable positions.

The Obamacare Timeline – 2010 to 2018

by Nitin Chhoda PT, DPT | Sep 17, 2013 | Electronic Medical Records, Healthcare Practice Management, Physical Therapy Documentation, Physical Therapy Management

The Affordable Healthcare Act, also known as Obamacare, contains almost 500 different elements. Various features of the Act were designed to take effect over the course of the next eight years, with a complete implementation date of 2018.

It was one of the signature pieces of legislation on the Obama administration’s to-do list when the President Obama took office.

The Act was passed amid strong opposition and continues to be a topic of great debate.

The Congressional Budget Office estimates Obamacare will provide coverage for 25 million individuals who are now without healthcare, but will still leave approximately 31 million uninsured by 2033.

The following provides an overview of the Obamacare timeline.

March 2010

President Obama signed the Patient Protection and Affordable Care Act into law on March 23, 2010, marking the beginning of legislation designed to provide healthcare for all Americans.

July 2010

A pool was established to cover individuals considered high-risk by insurance companies. The government-operated pool provides coverage for those with a pre-existing condition until Jan. 2014 when that coverage is required by all insurance plans.

Sept. 2010

Beginning in 2010, insurance companies could no longer refuse coverage to those under the age of 18 with a pre-existing health or medical condition, nor could insurers cancel policies for frivolous reasons.

This component of Obamacare also allowed children up to the age of 26 to remain on parental policies as dependents.

Insurance companies were no longer allowed to place lifetime limits on an individual’s benefits.

An additional clause prohibits annual limitations on benefits, with a complete ban on the practice beginning in Jan. 2014. A maximum tax credit of 35 percent was made available to small businesses with 25 employees or less.

Jan. 2011

The much talked about “donut hole” gap in Medicare prescription plans began to close and will be completely eliminated by 2020. Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) can no longer be used to pay for over-the-counter medications.

A limit of $2,500 is placed on the amount individuals could place in an FSA, along with the type of medical items that can be purchased. Penalties for buying prohibited products were increased to 20 percent.

Oct. 2012

Enrollment in the Community Living Assistance Standards and Supports (CLASS) program were scheduled to begin. Designed to ensure long-term care for seniors, individuals would begin paying advance premiums to cover the cost of their care after retirement.

The program was suspended in Oct 2011.

Jan. 2013

The income tax deduction for claimable medical-related expenses increased from 7.5 to 10 percent.

Jan. 2014

Medicaid coverage will expand for those with income levels up to 133 percent of the poverty level. Healthcare exchanges, also known as marketplaces, will be established where individuals and small businesses can purchase their own insurance. Some states have opted not to participate in either of the components.

States that don’t set up their own marketplace will have one established for them and operated by the federal government. Marketplace enrollment begins in Oct. 2013.

The Individual Mandate Tax (IMT) also goes into effect, imposing individual fines of up to $285 on those who refuse to obtain healthcare insurance. Adults 18 and older can’t be rejected for insurance and those under age 30 can purchase catastrophic insurance coverage through the marketplaces.

Insurance policies must provide a core of essential services as determined by Obamacare. Small businesses with 25 or fewer employees can take advantage of a maximum tax credit of 50 percent. The credit expires at the end of 2015.

Jan. 2015

The IMT increases to a maximum penalty of $975 per person for those without insurance. The Independent Payment Advisory Board (IPAB) will begin making recommendations to reduce Medicare spending.

The panel will be responsible for determining which treatments and procedures provides the best results and are most cost effective.

Jan. 2016

Those without insurance can be fined a maximum of $2,085 under the IMT.

Jan. 2017

Large businesses with 100 employees or more will be able to access their state’s healthcare marketplace. Participation is dependent upon the individual state’s approval.

Oct. 2017

This was the earliest date that CLASS benefits could be paid out to recipients. The White House suspended CLASS in Oct. 2011.

Jan. 2018

IPAB’s recommendations for trimming Medicare costs can be implemented. Those who have a “Cadillac” insurance policy, with premiums in excess of $10,200 for individuals and $27,500 for families, will pay a tax of 40 percent on their coverage, according to the value of the policy. Dental and vision benefits aren’t included when determining value.

Obamacare affects everyone in some way, but few have any knowledge about the different elements involved or how it will affect their healthcare and finances. Those that make no effort to learn about the Obamacare timeline will find they still have no medical coverage and the problem will be compounded by financial penalties.