Thursday, July 12, 2012

Healthcare reform and kids with special needs: what the new law means


The Affordable Care Act (ACA): Is it a good thing for kids with special needs? I really didn't have a clue how it will affect children with disabilities, and what cons there might be. Then Morris Klein, an attorney practicing in Bethesda, Maryland and the District of Columbia, kindly agreed to answer questions. He is a member of the Special Needs Alliance, a fellow of the National Academy of Elder Law Attorneys and an elder law attorney certified by the National Elder Law Foundation.

If you read this and still have q's, Mr. Klein will do his best to jump into the comments section and answer them, so feel free to ask.

When will changes for the ACA start taking place?
In 2014, although some states may seek to delay the deadline because they'll want to see how the Supreme Court ruled before taking any action to begin implementing the program.

Can you explain just how the ACA will affect kids with disabilities?
Children with disabilities will have more options for private healthcare coverage:
• Insurers will not be able to deny coverage for any child based on a pre-existing condition, nor can a premium rate be charged for such coverage.
• Insurers can no longer place lifetime limits on many benefits and, beginning in 2014, limits will be eliminated for most plans.
• Child-only policies must now be made available. This will facilitate coverage for kids whose parents have employer-provided insurance that doesn’t include dependent coverage or who are being raised by grandparents.
• Insurers must offer various wellness programs, such as well-child screenings, immunizations and, beginning in 2014, dental and vision care for children.
• Insurers will no longer be able to rescind policies because the applicant unintentionally made a mistake on the application. In the past minor oversights –even clerical errors—have resulted in lost coverage.

Previously, pre-existing conditions and lifetime coverage caps have led to situations in which a child’s only coverage option was Medicaid, unavailable to middle class families due to its strict eligibility guidelines. Families will also have access to insurance options through state-based “Health Benefit Exchanges.” There will be federal subsidies to help with the cost of private insurance for families living at the poverty level ($9,220 for a family of four).    

How does the ACA change the Medicaid program?
In addition to expanding the number of persons eligible for Medicaid, the ACA requires states to maintain currently eligibility standards and benefits for the Children’s Health Insurance Program (CHIP) under Medicaid until 2019 and to extend funding for CHIP through 2015. CHIP-eligible children who are unable to enroll in the program due to enrollment caps will be eligible for tax credits in the insurance exchanges.

What cons, if any, do you see in the Affordable Care Act for kids?
Poor persons in states that elect not to expand Medicaid are at risk; we do not yet know how much health insurance will cost once the ACA is implemented in 2014. Also, starting in 2013, healthcare Flexible Spending Accounts will be limited to $2500 per year per family, with annual adjustments for inflation (formerly, private employers could set their own caps on healthcare FSAs). Parents who use healthcare FSAs to pay for services, therapies and equipment for their children not covered by insurance may consider the limit a negative.

What are the financial implications of the ACA—can parents expect to save money? How so?
People who had to pay for healthcare out-of-pocket because they could not obtain health insurance will benefit. Even people who have health insurance now may save money because additional health services will be covered by insurance, such as vision programs for children.


Photo: Flickr/diana mai

20 comments:

  1. Thanks for this non-politcal view of the act. this is the first time I noticed a limit on FSA and I do consider that a huge con to the bill. Any idea why that change was made when it does a lot of good to save taxes on the gigantic amounts of money I spend on healthcare?

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  2. Thanks for the balanced view! I didn't realize that about FSAs either.

    What I think is another huge plus is that in the long run this will save the country a lot of money. Right now everyone with insurance is paying the ER bills of those without insurance, or without enough insurance. Now we won't have to do that.

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    1. The money is going to come from somewhere. It isn't just magically made; any economics class teaches that. So if not insurance, you will pay exorbitant taxes, probably more than any health insurance would ever cost you.

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  3. Texas has already decided not to expand the Medicaid, here. I don't know about the chip Medicaid, but with Texas your child has to qualify and receive SSI in order to get Medicaid coverage. It's a month to month thing that runs from the 1st through the 31st of each month. This causes us to lose my child's Medicaid at least twice per year. My husband gets a paycheck every other Friday. That usually equates to twice per month, which leaves us within the income eligibility limit. But 2-3 months out of the year, he ends up with no medicaid coverage. These are the months with 5 Fridays. Which can mean 3 paychecks, instead of 2. AS frustrating as the inconsistency is, Texas knows about it, but it saves them money, so they have no intention of changing it. Even if they based the Medicaid income requirements over 2 months, it'd help my child keep his coverage.

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  4. Thanks for this valuable information. I have been very worried about how the ACA may affect our Boo.

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  5. Ellen-
    The short answer is 1) Congress understood the average FSA spending account to be $1,400, and 2) Congress expected that the broader health insurance coverage under ACA would lessen the need for FSAs.

    Morris Klein

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  6. rossigrl84--Where in TX are you? Are you familiar with the My Medicaid Matters campaign in the state? Would love to give you more information if you want to contact me.

    Thanks for the info Ellen.

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  7. Wonderful, concise, and apolitical. Thank you for taking the time to do this.

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  8. Thank you for this informative piece.

    My child with special needs does not have many health concerns at this point, so FSA has not come up for us. There used to be two kinds of healthcare savings accounts with some different restrictions, and the FSA is the less restricted one (can be used for day care, respite, etc) as opposed to strictly health care expenses. The other may still be available without the cap, but again, there are more restrictions placed on it. I believe it is called healthcare spending account or healthcare savings account.
    Can the author elaborate if these are still in existence and if these are also capped? It's been a while since I worked for a company that offered this as a health care option.

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  9. Thanks for the interview. As an immigrant it was always amazing to me that in this day and age our kids could be deemed too risky and not have healthcare available to them, especially in families that work / pay taxes and therfore dont qualify for medicaid (I know you feel the pain Ellen, Im in NJ too and we both know how impossible it is to qualify). Healthcare for the most vulnerable kids should not be a luxury.

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  10. A couple questions: Are insurance payments part of the FSA limits? We have money withheld each month for medical expenses, but also for insurance payments (for insurance not provided by the company) and then we get reimbursed for those expenses. I'm trying to figure out if the insurance payment portion is within the FSA $2500 limit. Also, we have had our children on a child-only plan for years, but companies stopped offering those last year with the introduction of the ACA. We were able to keep our current plan because we were already members, but we could not have changed to any other insurer for a child-only plan because they had all stopped offering them. How does this new law require these child-only plans be offered? Will all insurers have to offer them?

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  11. Aly-

    There are various types of FSAs, but the ACA only alters the rules for the health care FSA. The ACA does not affect other FSAs, such as those for dependent care or employee parking.

    I should also point out that the ACA limits the use of FSA funds for over-the-counter drugs only to those that are prescribed.

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  12. One other con is that medical equipment is now taxable. This isn't good news for my daughter who wears glasses, hearing aids, uses a walker and a wheelchair and has orthotics.

    Our out of pocket expenses are $10K a year, so the FSA is a real hit to us.

    There are some good points to the law, but I fear that we are moving quickly to single provider health care, and our only options for medical care will be what the govt agrees to. Our friends in Canada and England have serious problems getting the care they need as options for people with rare/orphan diseases are minimal at best and sometimes not available at all.

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  13. Hi! Thanks for this info. I was wondering if states (like PA where we are) where children with disabilities can qualify for Medicaid via loophole will be impacted differently. My son currently qualifies under the loophole and although we currently have no limits on our therapy coverage with private insurance we are expecting that may unfortunately change soon. Thanks!

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  14. As Lesley said, the taxable items are an issue. My daughter require multiple medical equipment items - some of them rented monthly. That means a monthly tax. Right now, she has Medicaid and there is no out of pocket expense. We are barely - actually - we are NOT - making ends meet. And I don't know where we will find money to pay a bunch of taxes on NECESSARY medical equipment. This is how medically fragile children could end up living in hospital!!!

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  15. Julie-
    1. IRS rules do not permit usage of FSAs to pay for health insurance.

    2. A number of insurers did stop offering child-only insurance in response to the requirement that insurers must accept children under age 19 regardless of pre-existing conditions. A study last year by the U.S. Senate Committee of Health Education Labor and Pension found that health insurance carriers stopped selling new child-only health plans in many states. Of the 50 states, 17 reported that there are currently no carriers selling child-only health plans to new enrollees. Thirty-nine states indicated at least one insurance carrier exited the child-only market following enactment of the ACA. Some states have required insurers to continue to offer such plans.
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    Ilyssa-

    I do not know what you mean by "loophole." Medicaid rules vary from state to state so you may want to contact someone who is knows the Pa. eligibility rules concerning your situation.

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  16. I am not sure you can answer this, but my husband is self employed. We pay for our own insurance which 7 years ago before our special needs child came into this world was a reasonable $680/month. We have now been stuck in a bind having a child with special needs, and can not change so have been stuck with quarterly price increases. We now pay $1984/month for our family, plus $35 co-pay per visit, $50 for specialists, and $20/med...plus, plus ,plus. Last year we paid out of pocket $67,000 just for medical insurance equipment and doctors visits, and hospitalizations. We have tried many times to get medi-cal without avail. We have no other option but to keep paying. Will the new laws help us? Or with being self employed hurt us?

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  17. Anonymous-

    Your current health insurance, and the resulting high premiums, may be through an product that is available only to persons who cannot get regular health insurance, and you cannot get regular insurance because of your son’s pre-existing medical needs. The ACA may help you get a policy with lower premiums because insurers will not be able to exclude persons with pre-existing conditions, and children under 26 can be insured through their parents’ policy. Also the insurance exchanges will allow persons to shop for the best plan. As to your problems with Medical, eligibility rules differ in each state, so you would need to consult someone who has knows the Medical eligibility rules.

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  18. i would like to know what is out there for adults with disabilities, i see all kinds (well more than the adults get) of stuff out there for kids, but the adults seem to be the forgotten people. my daughter is covered for certain things under medicaid, but when she turned 21 she lost ALL her dental, she does have some benefits under my husbands dental plan thru his job but it's only $1000. last time we brought her to the dentist our cost was almost $6000. if you could please send me any info you might have, you can send it directly to me at cntrymom40@aol.com, in subject area please state that you are writing in response to this comment. Anne

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  19. My state Utah WONT keep Medicaid either. Abby has benefited from Medicaid so I'm not sure if I want it to go. Is there a My Medicaid Matters campaign in Utah which I can support?

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Thanks for sharing!