Allen Health Insurance Agent Asks When is Obamacare not Obamacare? « Independent Income Advisors

Allen Health Insurance Agent Asks When is Obamacare not Obamacare?

Tuesday, June 21, 2016 @ 03:06 PM
Author: Peter Young

This curious question arose when one of my health insurance clients called me to say me his doctor didn’t take Obamacare.

It’s a curious statement because although we talk about Obamacare as if it’s insurance, it really isn’t.  It’s a federal statute entitled the Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act (ACA).  Obamacare is the common colloquialism used to describe the law.  Whatever you want to call it, the crux of the law is that everyone (with a few exceptions) has to have a Qualified Healthcare Plan, that is, health insurance that provides Minimum Essential Coverage.  Leaving out large group plans (which have different rules) the law defines a list of things that health insurance must cover.

So when a doctor’s office says “we don’t take Obamacare,” they are saying “we don’t take health insurance.”  That might be literally true – there are some practices which have gone cash only, but they certainly don’t seem to be in the majority.  Past experience however, had taught me that physicians’ offices use the term Obamacare to mean a patient getting a subsidy (an Advance Premium Tax Credit) to help pay for their health insurance.

There is good reason to be more cautious of subsidized patients because the law (whatever you want to call it) allows a 90 day grace period to pay their part of the premium.  Patients who have to pay all of their premium only get a 30 day grace period.

Grace periods have been around for a very long time.  Traditionally the idea was that if you don’t pay your premium on time you’ve got 30 days to get a check to the insurance company.  If you get sick during the 30 days, the insurance company has to pay the bill but can deduct the premium from the amount paid.

It would be too simple (and give insurance companies apoplexy) if the PPACA/ACA/Obamacare simply extended the 30 days to 90 and leave it at that.  Instead, it allows insurance companies to “pend” claims for treatment provided on days 31 through 90 and see whether or not the patient coughs up the premium.  If day 90 comes around and still no premium check, the health insurance company doesn’t have to pay and the doctor gets stiffed.  Since a doctor’s practice is, at its heart, a business, they can’t afford this to happen too many times.

In the case of my client who had been turned away, I didn’t think we had a problem since he was not a subsidized patient.   I suggested a call to the office of the doctor in question and my client set up a three way with the lady in office who works with insurance company claim departments.  She, however, was adamant that his policy is “Obamacare” and they were not going to accept it.  Moreover she insisted on calling the claims department of the insurance company in question and asking them to confirm that the policy is (or is not) Obamacare – not a good development because if you ask your average health insurance company employee “is the policy you issued an Obamacare plan” the question they will hear is “is this a Qualified Healthcare Plan.”  The answer of course was “yes!” because no-one at the insurance company is going to admit that the company issued a policy that did not comply with the law.  The nicety of the 90 day vs. the 30 day grace period does not come into play.

Listening to the conversation, however, the light began to dawn.  Not only did the doctor’s office not understand the difference between a subsidized or a non-subsidized patient, there was no way of telling one from the other anyway.  The insurance cards issued by most companies don’t make the distinction.  Some companies (Humana for example) only issue policies here in DFW “off exchange,” meaning that the insurance company does not sell through healthcare.gov.  In those cases a doctor’s office can be sure that the patient is not subsidized, and in fact the doctor’s office in question told me “Humana is not Obamacare.”  But it is – we were just using (or misusing) the term differently.

After some research I found that the American Medical Association (AMA) is fully aware of the problem and has developed a step by step guide to the ACA grace period, listing the questions a practice needs to ask a health insurance company about how their grace period works.  The guide is unfortunately password protected, but if you experience the same problem as the client in this story, you might let the doctor’s office know that the guide exists.

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