Medicaid, Medicare, and ACA Insurance Plans

Medical Insurance
Jacob M. Eden, Esq.
eden@aidslawpa.org
AIDS Law Project of Pennsylvania
1211 Chestnut Street, Suite 600
Philadelphia, PA 19107
(215) 587-9377

138%
No resource test
MAGI
100%
$2k resource limit
up to 200%
with disregards
HH
250%
$10,000 resource limit
up to 500%
with disregards
MAWD
$2,199
(3xSSI)
Waiver
500% - No resource test
SPBP
Premium Assistance
138% - 400%
Cost Sharing Help
138 - 250%
Marketplace
ACA
100% 200% 300% 400% 500
%
Medicare has no limits

Patient Protection and Affordable Care Act
• Often called Affordable Care Act, ACA, or Obamacare.
• Signed into law in 2010. Fully phasing in by 2020.
• Survived several constitutional challenges
Some Key Provisions
o Dependents covered until age 26
o No lifetime limits on hospital stays or other essential health benefits
o Insurers cannot deny coverage for pre-existing conditions.
o Insurers must offer same premiums within the same age and
geographical groups – gender or health conditions cannot be
considered (except tobacco use)
o Put requirements on businesses to provide health insurance to
employees
1211 Chestnut Street, Suite 600, Philadelphia, PA 19107  (O) 215-587-9377  (F) 215-587-9902
Intake: Monday through Friday, 9:30 a.m. to 1:00 p.m.

Three-legged Stool
The ACA has often been described as a three-legged stool
– all legs are necessary for affordable, comprehensive
health care for all.
1. No pre-existing conditions exclusion
2. Everyone must be covered
3. Coverage must be affordable:
1. Medicaid
2. Marketplace

Medical Assistance

Benefits - MCOs
• For people on Medicaid only (i.e., no Medicare):
o Physical Health administered through a Managed Care Organization (MCO)
• In Philadelphia and surrounding counties:
o Aetna Better Health; UnitedHealthcare Community Plan; Health
Partners Plans; Keystone First.
o (Changing sometime in 2017; RFP going on now . . . Again)
• Covers: Almost everything, including doctors, hospitals, prescriptions, non-
emergency medical transportation, limited dental.
• Copays are either non-existent or $1-3 (cannot charge copay for medicines
whose only approved indication is for treating AIDS.
o Mental Health through Community Behavioral Health (CBH)

Benefits – Dual Eligibles
• Medicaid comes in two types for people with Medicare
o Buy-in: Pays the Medicare Part B premium
o Medical Assistance: Pays deductible, copays, and coinsurance.
• Paid through “fee-for-service” (i.e., ACCESS card)
• Does not cover prescription drugs . . .
o But eligibility for MA, automatically makes a person eligible for
Medicare Part D Extra Help (which limits copay to $3.80 max per
prescription).
o Up to 120% FPIG possible to have both Buy-in and MA;
above 120% must choose between Buy-in or MA.

MAGI Medical Assistance
a.k.a., Expansion MA
(Affordable Care Act)

Medicaid Expansion
• As of January 1, 2015, Pennsylvania has an expanded
Medicaid program
A Brief History
• Before the expansion:
o To be eligible, must be low income AND fit into a category
• Categories included: over 65; disability; pregnant; child; or parent
o “Traditional” Medicaid still exists: including Healthy Horizons and MAWD
• After the expansion:
o All adults between 18-64 are eligible, if low income (and meet other restrictions).
No additional “category” required.
• Low income = income less than 138% of the Federal Poverty Line (FPL)

MAGI MA Eligibility for Adults
• Income less than 138% FPL
• Age 19-64
• Pennsylvania Resident
• Not eligible for Medicare (Part A or B)
• U.S. Citizen
o Some immigrants may qualify but rules are complicated
• Note: No asset test! (Big change from traditional MA)

Income
• What is 138% FPL?
o Look at 2016 Benefit Amount and Income Levels (handout)
o For an individual: $1,366 per month / $16,394 per year
(full time minimum wage worker earns $15,080 per year)
o For a family of four: $2,795 per month / $33,534 per year
• What income is counted?
o MAGI: Modified Adjusted Gross Income
• Basically:
if the income is taxable, it counts;
if it is not taxable, it does not count.
o More Complex:
• Adjusted Gross Income + tax exempt interest + foreign income + Social
Security Benefits (with exception of SSI)

Income Eligibility for MAGI
Adults: 138%
Children 6-18: 138%
Children 1-5: 162%
Children 0-1: 220%
Pregnant women: 220%

What Income Counts
Counted Excluded
1211 Chestnut Street, Suite 600, Philadelphia, PA 19107 (O) 215-587-9377 (F) 215-587-9902 Intake: Monday through Friday, 9:30 a.m. to 1:00 p.m.
• Wages & tips
• Unemployment Compensation
• Social Security benefits
(Retirement, Survivors, and Disability)
• Pensions
• Dividends and interest
• Alimony received
• Rents & royalties
• Veterans benefits
• Workers’ compensation
• TANF (Temporary Aid for Needy
Families)
• SSI (Supplemental Security Income)
• Child support
• Scholarship income
• Student loan interest
• Gifts and inheritances

Deductions
(These are standard tax deductions – i.e, the “adjusted” part of adjusted gross income)
• Student loan interest ($2,500 maximum)
• Self-employed health insurance.
• Deductible part of self-employment tax.
• Health savings account deduction.
• Educator expenses (maximum $250).
• Certain business expenses of reservist, performing artist and fee-basis government
officials.
• Job related moving expenses.
• Self-employed SEP, SIMPLE and qualified plans.
• Penalty on early withdrawal of savings.
• Alimony paid.
• IRA deduction (under 50, maximum of $5,500; over 50, $6,500).
• Tuition and fees (maximum of $2,000).
• Domestic production activities.
Only available for Tax-filer applicants (see later slides for non-tax filers)

Household Size
• Determining the Household size for MAGI purposes:
o Person by person determination
• It’s possible for each person living in the same house to
have different household sizes
o Three sets of rules in determining size:
• 1. Tax Filer
• 2. Tax dependent
• 3. Non-filers and non-dependents

Courtesy of CLS

Traditional
Medical Assistance

Not eligible for MAGI Medical Assistance?
• Both Healthy Horizon and Medical Assistance for
Workers with Disabilities (MAWD) still exist! Remember
when calculating income for these programs, use the
SSI counting rules. That includes the 50% disregard for
earned income!
o Income is not the only requirement. There are resource limits and other
requirements (like a job for MAWD).

Supplemental Security Income (SSI)
Counting Rules
• To determine Countable Income:
o CI = UI + EI
• Unearned income (UI)
o $$$ - $20 general disregard
• Earned income (EI)
o $$$ - $65 (earned income disregard) divided by HALF
Example:
Bob receives $500/month from his aunt and $465/month from his job. What is his
COUNTABLE income?
UI = $480 ($500-$20)
EI = $200 (($465-$65)/2)
CI =$680

Healthy Horizons
People over 65 or with Disabilities
•Disabled 12 months or more
oEmployability Assessment Form
(EAF) (PA 1663)
Must check Box 1 or Box 2
OR
oReceipt of Social Security Disability benefits
OR
•Over 65

Healthy Horizon Income Limits
• Income Limit is 100% poverty for family size –
$990 for a family of 1 in 2016
• Use SSI income counting rules
o EARNED INCOME DISREGARDS
• $20 (general exclusion for everyone)
• $65
• One half of remaining earned income

Healthy Horizons Resource Limit
• $2,000 individual
• $3,000 couple
• NOTE: No Resource test for HH if there is a minor child
in the house!

MAWD
• Underused program
• For clients under 65 with income too high for Healthy
Horizons
o People working despite serious medical conditions
o People with disabilities whose spouses earn too much for them to get Healthy
Horizons
• Working and receiving compensation
o Job can be small–one hour per week.
• Receiving SSD, completed EAF or health sustaining
meds form

Who should get MAWD?
• Too “rich” for Healthy Horizons
• Full time workers with significant health problems --
NEED TO SHOW DISABILITY
• DISABLED individuals with incomes over 100% of
poverty -- NEED TO GET A JOB

What is a Job for MAWD?
• No specific number of hours required
• No requirement that taxes be withheld
• No specific hourly rate required (minimum wage is
typical)
• Self-employment forms/business plan rarely needed,
but often improperly asked for

MAWD Income Limits - 2016
YOU WILL RARELY ENCOUNTER ANY CLIENT WHO IS OVER
INCOME FOR MAWD
• 250% FPL
• Family of 1 $2,475
• Family of 2 $3,338
• Don’t forget the EARNED INCOME DISREGARDS ($20; $65; one
half the rest!)
• The effective income limit for a single person who works despite his
or her disability is OVER $54,000 per year!

MAWD Resource Limit
• $10,000

MAWD Costs
• Unlike other categories o Medical Assistance, people on
MAWD must pay a monthly premium for their coverage.
• The premium is 5% of Countable Income
• Typical cost is between $50-100
o Some plans on the Marketplace, with subsidies, could cost lest. However, those
plans will usually have higher out of pocket costs in deductibles, co-pays, and co-
insurance.

Proving Disability for MAWD
• On Social Security Disability, or
• EAF, or
• Health Sustaining Medication Form (PA 1671)

Special Pharmaceutical
Benefits Program
(SPBP)

SPBP
• SPBP is Pennsylvania’s version of the AIDS Drug Assistance
Program
• Run out of the Department of Health, not DHS
• Covers:
o Prescription drugs – not just HIV prescriptions but a wide variety
o Some lab work
• SPBP HIV/AIDS is the payer of last resort and third party
resources must be used before payment is made by the
program.

SPBP Eligibility
• Applicants must be:
o a resident of Pennsylvania,
o have a gross annual income of less than or equal to 500% of the
Federal Poverty Level (FPL), and
o have a diagnosis of HIV/AIDS to qualify for the program.
• No resource test

SPBP & other Insurance
• SPBP works well with other insurance.
• It’s possible for a person to have:
o Private insurance and SPBP
o Medicare and SPBP
o Medicare, Medicaid, and SPBP
• Medicaid does not cover prescription drugs when paired with Medicare,
which is where SPBP can help.

Medicare

The Basics
• Administered by Social Security Administration (SSA)
• Traditional Medicare “Red, White and Blue” card
• Three Parts (Parts A, B, D – Part C is not really a part)

Eligibility
• Age 65, or:
• Disabled and worked long enough to be insured
(generally 40 quarters)
NOTE – Coverage starts 24 months after eligibility for Social Security checks
(don’t forget 5 month waiting period for checks)
Exceptions ESRD; Lou Gehrig’s disease

Medicare Part A
• Hospital Insurance
Covers inpatient hospital, SNF, home health, and
hospice care
No premiums for almost all beneficiaries
Has copays and deductibles

Medicare Part B
• Physician services, some outpatient services, some
preventive services, ambulance services, and durable
medical equipment (DME)
• Has premiums, copays, and deductibles.

Medicare Part B Premiums
• Varying Monthly Premiums (2016)
$121.80 -- individuals with incomes less than $85,000 (single)
(Most people who were eligible pre-2016 still pay $104.90)
Higher income folks – higher premiums

Medicare Part B Co-payments
• Medicare generally pays 80% of allowable charge
• The remaining 20% falls to beneficiary, unless has a
secondary insurance (for example, Medicaid).
o Charity Care is also an option

Medicare Part D
• Prescription Drug Benefits
Began January 1, 2006
• Must pick a plan from a private insurance company during
yearly open enrollment period
• Has premiums, copays, and deductibles -- important to pick
the right plan!
• Assistance for low-income individuals

Medicare Part D
Two types of Part D plans:
• Stand Alone Prescription Drug Plan (PDP)
• Medicare Advantage Plan with Prescription Coverage . .
. Which brings us to Part C.

Medicare Part C
• Not really a part, but a compilation of A, B, & D
• Managed Care for Medicare Beneficiaries
• Combined Medicare coverage and prescription drug
coverage
• “Special” Plans for full DUAL ELIGIBLES
(Medicare and Medicaid) a/k/a
“SPECIAL NEEDS PLANS”

Affordable Care Act
Marketplace

Marketplace
• On the marketplace, people buy private insurance plans
for coverage.
• There are set enrollment periods
o Open Enrollment: November 7 – January 31
• For coverage starting January 1, must apply by December 15 and pay first
premium by December 31.
o Special Enrollment: You can enroll in plans for 60 days following certain
“life events”. These events are usually related to losing insurance,
whether because someone died or married/divorced or got/lost a job.

Insurance Terms & Concepts
• Premiums: The monthly cost a person pays for a health plan.
Paid directly to the health insurer.
• Cost-sharing: Charges a person pays as he or she uses
benefits covered by a plan. Usually paid directly to various
service providers.
o Deductible: Amount a person must pay before the plan begins paying.
• Beware of plans that include prescription drug coverage in the deductible.
o Copayments: Set dollar amount for an item or service that an enrollee must pay.
• For example, $10/copay to see Primary Care Physician, which is paid directly to
the PCP.
o Coinsurance: Set percentage of an item or service that an enrollee must pay.
• For an example, if a person has 10% coinsurance for X-rays and an X-ray costs
$500, the person pays $50 for the X-ray.

Terms continued
• Maximum Out-of-Pocket limit (OOP): The highest
amount that an enrollee can pay in cost-sharing. Once
this number is reached, the plan covers all costs (even
for services that previously required copays or
coinsurance).
o Usually only applies to in-network care. Out of network care may have no or
higher OOP limit.

Metal Level Tiers of Qualified Health Plans (QHPs)
METAL LEVEL PLAN TIERS
QHPs must provide plan designs consistent with actuarial values
Platinum 90% actuarial value
Gold 80% actuarial value
Silver 70% actuarial value
Bronze 60% actuarial value
Catastrophic coverage
High deductible health plan available for individuals up to age 30 or
some individuals exempted from the individual responsibility
requirement
Actuarial value is a measure of the percentage of expected health care costs a health plan will cover and is
considered a general summary measure of health plan generosity. It represents an average for a population and
does not necessarily reflect the actual cost-sharing experience of an individual.
Costscoveredbyaplan
Premiumspaidbyconsumer

The AFFORDABLE part of the
Affordable Care Act
The affordable care act has provisions to reduce the cost of
both PREMIUMS and Cost-Sharing:
• Premium :
o Advanced Premium Tax Credits : Available to people with income between 100%
and 400% FPL, in theory.
• Available for any QHP, regardless of Tier
• Cost-Sharing:
o Cost Sharing Reduction Plans: Silver plans that reduce cost-sharing for people
with income between 100% - 250% FPL.
• Only available for Silver Tier plans.

Income Counting
• MAGI – Modified Adjusted Gross Income is used to calculate
eligibility for premium subsidies and cost sharing reductions.
That is Adjusted Gross Income, plus some other income, most
importantly, Social Security Benefits (but not SSI).
• Household size is the determined by tax paying unit. Thus,
tax-filer counts own income plus any dependents. Any
dependents count own income plus the tax-filer’s and any
other dependents.

Advanced Premium Tax Credit
• Uses projected annual income
• Must file taxes
o “reconciliation” occurs at tax time, where if you earned more than you predicted, you
must repay. But if you made less, you might get more tax credits.
o If married, must file a joint return (unless Head of Household, survivor of domestic
abuse, or an abandoned spouse).
• Must enroll in a Qualified Health Plan (all plans on the
Marketplace are QHPs)
• How is it calculated?
o It’s complicated. The subsidy is equal to the region’s benchmark plan minus a
person’s expected premium contribution.

Cost Sharing Reduction Plans
• People with incomes between 100% - 250% FPL qualify for
additional Cost Sharing Reductions.
• To be eligible for these savings a person must be eligible for
the tax credit and be enrolled in a silver plan.
• The reductions are provided through enrollment into special
Cost Sharing Reduction silver plans, where the insurer
automatically alters the cost-sharing burden.

Cost Sharing Reduction Plans
• Standard Silver: 70%
CSR Plans
• Up to 150% FPL: 94% (CSR 94) / OOP Max: $2,250
• 151% - 200% FPL:87% (CSR 87) / OOP Max: $2,250
• 201% - 250% FPL:73% (CSR 73) / OOP Max: $5,200
• It is up to insurer how to make a Silver plan cover more
of the medical costs. Most use a combination of lowering
the deductible, copays/coinsurance, and Out-of-Pocket
maximums.

Real Time Determinations
• The Marketplace makes real time determinations on
whether a person qualifies for a premium or a CSR plan.
• An eligibility notice will then be sent.
• The person then must send in any needed verification.
Uploading this information is best, but if mailing include
the bar code on the eligibility notice.

Resources for Applying
• Choosing and applying for Marketplace plans is daunting.
Many variables must be considered.
• There are many resources out there to help people apply:
Navigators, Assistors, and Brokers.
• Healthcare.gov has a “find local help” button. Within 5 miles of
Philadelphia, there are 81 organizations with assisters:
including the Health Federation, Philadelphia FIGHT,
Mazzoni, PHMC (at various places). Assissters are federally
trained and should be able to assist in applications.

CSR 87 CSR 94CSR 73

Medicaid, Medicare, and ACA Insurance Plans

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