Americans are covered (or not covered) by a patchwork quilt of health insurance, which is described in my book. The quilt was built incrementally over time, and the Affordable Care Act (ACA) made significant changes to certain sections of the quilt, especially Medicaid and the Individual Market.
Children’s Health Insurance Program (CHIP)
Children’s Health Insurance Program (CHIP)
An insurance program that provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid but not enough to buy private insurance. In some states, CHIP covers pregnant women.
The program covers 9 million children and along with Medicaid, it covers 39% of the children in the United States. The programs cover approximately half of children living in rural areas and half of children with special healthcare needs.
CHIP was created under the Balanced Budget Act of 1997, but needs to be renewed through legislation, and in 2017 the program expired for four months when the Democrat and Republican parties fought over the budget. The renewal legislation will keep the program active through 2027, at which time it will need to be renewed again. Each state offers CHIP coverage, and works closely with its state Medicaid program to administer the program.
Routine “well child” doctor and dental visits are free under CHIP. But there may be copayments for other services. Some states charge a monthly premium for CHIP coverage. The costs are different in each state, but you won’t have to pay more than 5% of your family’s income for the year.
2 ways to apply for CHIP:
- Call 1-800-318-2596 (TTY: 1-855-889-4325).
- Fill out an application through the Health Insurance Marketplace (www.healthcare.gov). If it looks like anyone in your household qualifies for Medicaid or CHIP, they will send your information to your state agency. They’ll contact you about enrollment. When you submit your Marketplace application, you’ll also find out if you qualify for an individual insurance plan with savings based on your income instead.
You can apply for and enroll in Medicaid or CHIP any time of year. There’s no limited enrollment period for either Medicaid or CHIP. If you qualify, your coverage can start immediately.
Learn more about CHIP: https://www.healthcare.gov/medicaid-chip/childrens-health-insurance-program/
Covered CHIP services in your state: https://www.insurekidsnow.gov/coverage/index.html
A federal health insurance program for people 65 and older and certain younger people with disabilities. It also covers people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).
Medicare covers 44 million Americans and its outlays are over $700 billion. The program has been key to improving disparities in poverty, coverage and outcomes between the sexes. But the program’s limitations begin to become more salient the older people get, as they are more in need of things like long-term supports and services and hearing aids. Because women live longer, they make up the majority of Medicare enrollees (55%) and consume these services more than men do.
Medicare is split into four coverage types, which are called “Part A,” “Part B,” “Part C,” and “Part D.” Medicare Part A covers facility services. Part B covers physician services. Part C is privatized and can cover anything. Part D covers prescriptions.
Part A. Most Americans are automatically enrolled in Medicare Part A when they turn 65 (unless they aren’t going to receive social security). You don’t have to do anything—the government just mails you a Medicare card a few months before your 65th birthday. If you’re disabled, you must be receiving Social Security Disability Insurance (SSDI) payments for two years before you’re eligible. People with end-stage renal disease and amyotrophic lateral sclerosis are eligible for immediate benefits.
Included in the Medicare Part A benefits are inpatient hospital stays, skilled nursing facility stays, certain home health visits, and hospice care. These services have substantial deductible and copays, which is the main reason why Americans frequently opt for private supplemental “Medigap” plans.
Part B. Medicare Part B covers physician services. Unlike Part A, you have to notify Medicare that you want to opt into coverage, and you have to pay a monthly premium of $134 (although rich people pay more). Here’s the kicker—an extra 10% gets added on to your Part B premium for every year you don’t sign up. This is to prevent people from waiting until they get sick to buy insurance. Once you have Part B, you have a $183 deductible and 20% copay for physician services.
Medigap. Most Medicare enrollees purchase supplemental coverage from private insurers which are called “Medigap” plans because they fill in the gaps in Medicare coverage. They cover things like foreign travel emergencies, take care of some or all cost-sharing, and even can create an out-of-pocket limit. However, they are not legally allowed to cover prescriptions. If you want prescription drugs, you have to have a Medicare Part C or D plan.
Part C. You can also get Medicare from a private insurance company, with a benefits structure that differs completely from traditional Medicare. These Part C, or “Medicare Advantage” plans, use managed care techniques like limited networks, referrals and utilization management to keep costs down. Part C plans can also cover drugs, unlike Medicare Part A or B. Over a third of beneficiaries opt for one of these plans. You have to be signed up for both Part A and B to sign up for Part C. Premiums for Part C can be as low as $0 and as high as a few hundred dollars a month, but average about $30 a month.
Part D. Part D plans, established in 2003 under the Medicare Modernization Act, cover drugs and are only sold by private insurers. Like all Medicare plans, Part D’s design is very complex, and beneficiaries’ coinsurance changes depending on how much they or their plan have spent on drugs in a particular year.
Sign up for Medicare https://www.medicare.gov/sign-up-change-plans
Medicare Plans Resource for Veterans https://www.medicareplans.com/va-military-and-medicare-benefits-resource/
An insurance program that provides free or low-cost health coverage to some low-income people, families and children, pregnant women, the elderly, and people with disabilities.
Medicaid has income-based eligibility (defined as being under a certain percentage of the Federal Poverty Level, or FPL), although eligibility requirements are sometimes more lenient for children, the disabled, pregnant women, and families, and they vary by state. 67 million Americans are covered by the program.
Medicaid is run by the states, but receives 67% of its funding from the federal government. States decide on the details regarding who is covered, which services are covered, how the delivery system works, and how providers are paid, but all within the boundaries of the relatively flexible federal law that guides it. For this reason, Medicaid programs take very different forms, and even different names, depending on in which state you reside.
Medicaid usually doesn’t reimburse providers as generously as commercial insurance or Medicare (which also reimburses at levels lower than commercial insurance). Providers sometimes lose money caring for Medicaid patients and some don’t accept them for this reason. Recipients often have more limited access to care as a result, and sometimes report being treated poorly—waiting in the waiting room longer than other patients, being rushed through the system and being talked down to.
Despite its low reimbursement, the program has had a profound impact on the health of America’s underserved. Without it, millions of poor and disabled in this country would receive little to no healthcare. Three quarters of poor children, half of children with special health care needs, nearly half of disabled adults, and most nursing home residents would be left in the cold. And a lot of poor, pregnant women would be unable to have a medical professional monitor their pregnancy and or be able to give birth in a medical facility.
If you want to sign up for Medicaid, you can go to www.healthcare.gov and, after entering some personal information, the system will be able to tell you whether you are eligible for Medicaid in your state.
Additional information about Medicaid eligibility can be found here: https://www.hhs.gov/answers/medicare-and-medicaid/who-is-eligible-for-medicaid/index.html
A service available in every state that helps individuals, families, and small businesses shop for and enroll in medical insurance.
Americans can visit their state’s marketplace website to purchase insurance. However, they can only purchase a plan during the “open enrollment period,” which begins each November and runs for a few months, depending on the state. Some people will be able to purchase outside the open enrollment period, if they have a qualifying event, which the website will ask about if you try to sign up outside of open enrollment.
The federal government operates the Marketplace, available at HealthCare.gov, for most states. Some states run their own Marketplaces. On HealthCare.gov, you may be asked to select your state or enter your ZIP code. If you live in a state that runs its own Marketplace, you will be sent to your state’s Marketplace website.
The Health Insurance Marketplace (also known as the “Marketplace” or “exchange”) provides health plan shopping and enrollment services through websites, call centers, and in-person help. Small businesses can use the Small Business Health Options Program (SHOP) Marketplace to provide health insurance for their employees.
When you apply for individual and family coverage through the Marketplace, you’ll provide income and household information. You’ll find out if you qualify for:
- Premium tax credits and other savings that make insurance more affordable
- Coverage through the Medicaid and Children’s Health Insurance Program (CHIP) in your state
Most people who purchase plans on the exchange receive subsidies to help them pay for their insurance – the lower the income the higher the subsidy. Plans purchased on the exchanges can be very expensive without subsidies.
No matter which state you live in, you can go to www.healthcare.gov. If your state operates its own exchange, this site will redirect you there.
If your employer offers ESI for your position, it should be included in your offer package and you should be able to enroll during the new employee onboarding process. Visit this one-pager for tips on how to choose the best plan for you: How to Select the Right Plan.
Health insurance is a very valuable benefit, whose value (although varying depending on the plan and your needs) is roughly worth about $6,000 per year if you’re single, and $14,000 per year if you are covering family members. Employers pay for, on average, 82% of the premium for a single employee, and 70% of the premium for an employee with family members on the plan.
Do you need help applying for health insurance?
- The federal marketplace website, www.healthcare.gov, can determine your eligibility for public insurance in addition to allowing you to purchase a plan from a private health insurer.
- Call the Marketplace Call Center at 1-800-318-2596 or TTY at 1-855-889-4325
- Find a local help center to apply or ask questions in person: https://localhelp.healthcare.gov/#/
- Download an application form to mail in: https://marketplace.cms.gov/applications-and-forms/individuals-and-families-forms.html
State Based Health Insurance Exchanges:
People in most states use HealthCare.gov to apply for and enroll in health coverage.
If your state appears on the list below, you won’t use HealthCare.gov. You’ll use your state’s website to enroll in individual/family or small business health coverage, or both.
- District of Columbia
- New York
- Rhode Island
For more information visit: https://www.healthcare.gov/marketplace-in-your-state/
Affordable Care Act
A law passed in 2010, also known as “Obamacare,” which made significant changes to the United States healthcare system, most of which were intended to increase the number of Americans with health insurance (and was successful in doing so, helping approximately 20 million Americans get coverage).
The law made a number of significant changes, but these were the most significant:
- Created online “exchanges” where people can go to compare and purchase health plans for themselves and their families, and for small business owners to purchase plans for their employees.
- Expanded the Medicaid program to cover all adults with income below 138% of the federal poverty level. (Not all states have expanded their Medicaid programs.)
- Put into law consumer protections, the most important of which is barring insurance companies from denying coverage to or charging more to people who are already sick.
- Required employers with more than 50 employees to provide health coverage.
- Supported innovative medical care delivery methods designed to lower the costs of health care generally.
The Affordable Care Act has not been without controversy – support for the law has been split among liberal/conservative lines ever since the law was being debated. It has been targeted for repeal by the Republican party a number of times, but they never managed to obtain enough votes to overturn it, in one instance falling short by only one vote. The law has also been subject to a number of legal and regulatory actions – these actions have changed how the law has been enacted but the law as a whole still stands.
Affordable Care Act Resources
Rights and protections from the Affordable Care Act: https://www.healthcare.gov/health-care-law-protections/
Video explanation: https://www.youtube.com/watch?v=JZkk6ueZt-U