Robert Chaloner, President & CEO, Southampton Hospital; Kathleen Shure, Senior Vice President, Greater New York Hospital Association; Karen Wulffraat, Southampton Hospital Foundation; and Christopher Schultheis, Vice President & CFO, Southampton Hospital at a presentation for professionals about the Affordable Care Act.
By Ellen Frankman
As the October enrollment date for insurance exchanges in New York draws near, pressure mounts for both medical consumers and providers to unravel the complexities of the Affordable Care Act.
In an effort to educate doctors and practice managers on the East End, Robert Chaloner, CEO of Southampton Hospital, presented a discussion Monday evening led by Kathleen Shure, the senior vice president of Managed Care and Insurance Expansion for the Greater New York Hospital Association.
“We are experimented a little bit on how we play a role in the transition into this health care system,” said Chaloner. “I think we all have a lot of learning to do on this and we wanted to create an environment where people can learn and ask questions.”
Chaloner emphasized that those in attendance should ask questions now to find out the answers to questions their patients will likely ask them come fall.
“People ask me, ‘Bob is this really going to happen?’ and I say ‘Yes, this is happening,’” said Chaloner.
Chaloner then welcomed Shure to the front of the Southampton Hospital’s Parrish Memorial Hall to explain precisely what is happening, presenting an outline of the Affordable Care Act that will swing into full force in a matter of months.
“One of the biggest changes is that beginning January 1 individuals must have health insurance or be subject to penalty,” explained Shure.
This stipulation is also known as the individual mandate. The start of 2014 will also expand Medicaid income eligibility, make available to certain individuals subsidies for health insurance, make available to certain businesses tax credits, and additional reforms, like those preventing insurance companies from pre-existing condition exclusions, will kick in. The following year will see the implementation of a mandate requiring employers with 50 or more employees to provide adequate insurance or be subject to penalty.
It is estimated that 26 million Americans will gain insurance under the ACA, leaving 30 million individuals uninsured. In New York, it is expected that one million people will gain coverage, half through Medicaid and half through private insurance, and in Suffolk County, the number of newly insured will be 82,000.
The terms of the Affordable Care Act are then brought to life in the health insurance exchanges.
“You can think of an exchange as an organized online marketplace,” said Shure. “The exchange will also determine who is eligible for tax credits and subsidies, and you can actually compare health plans and enroll for insurance online.”
The exchanges will present health plans in a way that is accessible to individuals and employers, assigning quality ratings and actuarial values to products offered. They will also calculate costs and establish a Navigator program to assist consumers in the process.
“There was a lot of confusion out there about what exchange coverage is,” said Shure. “It’s really important to know that this is commercial coverage. That is important to know because as a provider you are not going to get paid a regular government rate.”
Shure stressed that the doctors and practitioners in the audience need not accept Medicaid rates, despite the fact that a number of the insurers are coming out to the hospitals in attempts to get lower rates comparable to those of the federal system.
New York is one of 17 states plus Washington D.C. that will operate its own health insurance exchange, and it finally has a name, NY State of Health. New York State also decided it would benefit consumers to standardize the products out there, thereby requiring that everyone selling on the exchange sell one standard plan. This allows for competition over network and price.
“We actually haven’t seen the networks yet, but my expectation is that very few will be offering out of network coverage,” said Shure.
Shure estimates the most significant cost to the consumer will come in the form of copayments on hospital services. An individual with a mid-level Silver health plan (plans will range from Bronze to Platinum) could face up to a $1,500 copay for inpatient hospital services.
“One of the things that many hospitals worry about is that this will become hospital debt, particularly for lower income populations,” said Shure.
“What about undocumented immigrants? Will they be able to purchase health insurance?” asked Sam Santiago, the Medicaid Coordinator for Southampton Hospital.
Shure explained that undocumented immigrants will be able to buy insurance under the ACA, but they won’t qualify for subsidies.
“That’s important because I want to know what happens to patients who come to the hospital who aren’t documented,” said Santiago. “What choices do they have when it comes to insurance? Because they are only eligible for emergency Medicaid otherwise, it would be in their best interest to purchase a policy.”
Substance abuse, mental health, and pediatric dental costs will also be covered under the standard New York State plan.
According to Shure, the only way to predict the success of the ACA is by studying current trends in the market alongside the incentives that the Act offers. Because of a growth in premiums that was occurring before the implementation of health care reform, small employers have been dropping coverage, fewer employees are taking up coverage, coverage is shifting to high deductible plans and products have narrower networks.
“These changes will likely continue with health reform,” said Shure. “Most employers say they are committed to providing coverage, but I think a lot of employers will wait to see what happens.”
Shure believes that coverage supplied by large employers to low-income employees is what will be most at risk under the ACA, as it will be less expensive to pay a fine for not providing adequate coverage than to provide health insurance for each employee.
For individuals, it will also be cheaper up front to pay a penalty for not having insurance than to buy into a plan. Penalties in the first year will be $95 per year per adult or one percent of family income, whichever is greater. But as Shure pointed out, the individual will then still lack coverage and instead be paying for others plans by forking over the fee.
“These changes are the most significant changes that have happened in insurance since Medicare and Medicaid were implemented in the mid 60s,” said Shure. “Nobody knows exactly how this is all going to play out. Nobody knows for sure.”