ACO Cost-Sharing Subsidies Should Alleviate Payment Fears
By Christine Kern, contributing writer
Cost-sharing subsidies take up slack of payments for many ACO patients.
The Miami Herald reports some South Florida physicians are turning away Obamacare enrollees, at least in part because they are worried that they might have trouble collecting from them given the high deductibles and co-insurance imposed by many of the new exchange health plans.
“You don’t want to be in a situation where you provide service, and turn around and there’s no contract in place to reimburse you,’’ explained Jay Millson, executive vice president of the Florida Academy of Family Physicians.
Jeff Scott, general counsel for the Florida Medical Association, said doctors “have no idea that they’ve just been signed up to participate in a plan with a patient population who are … probably not financially well off, and they just signed up for a plan that has a 40 percent co-payment and potentially high deductible.”
U.S. Rep. Debbie Wasserman Schultz, who chairs the Democratic National Committee issued a statement saying she has heard from “a couple of constituents’’ about this issue. “My staff has raised it with the Department of Health and Human Services as well as directly with some of the insurance companies. I believe the onus is on the insurers and the providers to bridge this gap and provide reliable, consistent customer service.”
Some of those fears can be allayed, however, by the fact that many of those Obamacare patients qualify for ACA cost-sharing subsidies that cover up to 94 percent of their total out-of-pocket costs, according to The Commonwealth Fund. Eligibility requires individuals to have an income below 250 percent of the federal poverty level, and to have signed up for a silver-tier plan.
The cost-sharing subsidy has received far less attention than the federal premium tax credit, but it’s just as important in making healthcare affordable for lower-income Americans. Cost-sharing reductions will be applied automatically for consumers who qualify based on their income, but only if they buy a silver-level plan, considered the benchmark under the law. The federal cost-sharing subsidies essentially increase the insurance company's share of covered benefits, resulting in reduced out-of-pocket spending for lower-income consumers.
In addition, people who earn 250 percent of the federal poverty level or less will also have their maximum out-of-pocket spending capped at lower levels than will be the case for others who buy plans on the exchange. In 2014, the out-of-pocket limits for most plans will be $6,350 for an individual and $12,700 for a family. But people who qualify for cost-sharing subsidies will see their maximum out-of-pocket spending capped at $2,250 or $4,500 for single or family coverage, respectively, if their incomes are less than 200 percent of the poverty level, and $5,200 or $10,400 if their incomes are between 200 and 250 percent of poverty.
Although no data exists regarding what percentage of Obamacare enrollees qualify for the cost-sharing subsidies, South Florida has a large population of lower-income workers in service industries with incomes under 250 percent of the federal poverty line. And since most enrollees in Florida, as in other states, have signed up for silver-tier plans, it’s almost certain that a significant number of Obamacare enrollees there qualify for the cost-sharing reductions.