THERAPIST-TO-THERAPIST CONVERSATION
KATHLEEN MILLS, LPC from Texas & JOE SANOK, LLPC from Michigan
Kathleen: Throughout the last several years I have been very blessed with getting to know people by way of unique situations, only to find out that there is a kindred spirit of sort, with sharing common interests. I had the privilege to get to know Joe Sanok, MA, LLPC, from Traverse City Michigan. We crossed paths by way of commenting on various discussion boards on LinkedIn. As a result, we both felt compelled to begin some fairly candid discussions regarding what the future may have in store for the mental health professional as it pertains to the new healthcare in this country called The Affordable Care Act, or more frequently referred to as Obamacare.
Joe: Honestly, I have not looked into it at all, my personal questions are: What is Obamacare anyway? I mean all citizens can have healthcare with everything being covered. Is this your understanding?
Kathleen: I could probably spend about three hours trying to answer this question, but for the sake of time, let me say it this way. In 2010, the Senate passed the 2600 page document named “The Affordable Care Act” without giving Senators the ability to read it, until after it was passed. (This was the provision put forth by the Senate.)
What was presented to the American people and what is in it are two entirely different things. After passing this law, people begin to read through this enormous piece of legislation and the discoveries are chilling. So chilling that a very large lawsuit was issued by private parties, a few lawyers and 26 states throughout the union. It went all the way to the Supreme Court and the arguments were heard in March 2012.
Two key cornerstones of the Obamacare legislation were argued: 1) The individual mandate that required the individual to buy healthcare or else be subject to a penalty by IRS tax, and 2) Medicaid Expansion provision that made it mandatory for all States to take the Medicaid Expansion whether the State could fund it or not after the initial 3 year federal funding ceased.
The Court ruled in favor of the individual mandate; the Federal Government can compel an individual to buy healthcare or else suffer an additional tax issued by the IRS.
SCOTUS ruled in favor of the State Sovereignty clause thereby striking down the federal mandate for Medicaid Expansion, thus upholding each State’s Sovereignty. The States “can and shall” have the right to decide whether they want to assist in the Exchanges and whether they want to accept the Medicaid Expansion for their citizens. The Federal Government has offered only three years of funding for the expansion. The State will be 100% liable thereafter.
So now we have Obamacare in full force after the 2012 November election. The mandates have been slow in their implementation since 2010 (waiting for the 2012 November election), but now I am seeing a very rapid rollout. Another enormous implementation milestone was reached on March 1. 700 pages of rules and regulations were issued, oddly on the first day the infamous “Sequester”. (No cuts or slow down timetables were issued on the Obamacare rollouts due to the Sequester!)
Joe: I currently don’t take insurance. Am I missing out of potential referrals under the affordable care act?
Kathleen: This is a very difficult question to answer. Rather, I would encourage you to take some financial inventory, concerning current patterns in your private practice. What is your basic demographic info of your client; financial, referral source, blue collar, white collar, insurance, self-pay ability, etc.? What is the primary source of industry in your community? It is important to know your community in this way…all financials, industries, unemployment rate, etc.
I have done extensive reading, just so people understand. I did not read the 2562 page ACA but I did read (almost done) the “cliff notes version” at 675 pages. I highly recommend everyone get a copy of it. (You can download it. Take it to your favorite printer to have them bind it up.)
So let’s do the math here: The individual has to buy the full coverage policy that meets all Obamacare insurance coverage requirements (in Section 1301). You may buy this through exchange systems (federal government kiosks). It inlcudes private insurance companies like let’s say, BC/BS or Aetna or UHC, etc.
Please keep mind that the private healthcare insurance companies have to by law, offer full coverage, soup-to-nuts, everything. Whatever the wish is from Kathleen Sebelius, Secretary of HHS, whether the individual wants this or not. Ms. Sebilius, has the supreme power to dictate whatever and whenever she desires about anything pertaining to The Affordable Care Act (this includes all insurance companies). The increases are passed on to the, individual. It is written in the New Law (Section 2711-2719 and other sections).
This is why you are seeing your clients’ premiums go through the roof now, along with higher deductibles and copays. The insurance companies are forced by law to be compliant with the new law and its regulations. The ACA mandates that all health insurance company health policies must include a lengthy list of coverages even if the purchaser does not want that coverage. This means your 62 year-old grandmother will be paying for maternity coverage. It means a 22 year old male will be paying for procedures he won’t need for 25 years. The dissatisfaction expressed by healthcare professionals, you hear about, is related to the continued reduction of insurance reimbursement for their services, while the patient’s insurance premiums and deductibles have increased. Many healthcare providers have blamed this enitrely on the private insurance companies. However, Kathleen Sebelius, Secretary of HHS, relunctantly confirm (March 2013) that Obamacare will have continued and ongoing increases in premiums. (The article is posted on our Life Tree Counseling Center,LinkedIn Company Page)
There are provisions and mathematical formulas for the individual that come into play if he cannot buy the mandated insurance from either the private insurance or the exchange. The individual may be eligible to go into the Medicaid Expansion program. This Medicaid program is the Medicaid Expansion you keep hearing about. Medicaid used to be a temporary way for people who were down on their luck to receive healthcare. Not anymore.
The Medicaid Expansion is the expansion for many to go into, if they meet the mathematical formulation. For example, a family of four making $92,000 may be eligible for Medicaid Expansion provisions through subsidy credits. Also, the entry-level employee who will not be able to buy what is called mini-med policies. The mini-med policies are those similiar to catastrophic care bought by employers for their entry level employees.
Joe: This is confusing to me.
Kathleen: Yes, it is. So one of the reasons you see employers drop healthcare is because they literally cannot afford it.
The federal government has taken the purchase power away from the employer. In other words, the ability to purchase a custom healthcare plan and then buy it at a bulk purchase rate. This type of cafeteria-style coverage (what to cover/what to not cover) helped their employees and their families obtain an equable policy and making it affordable to both employee and employer. We are noticing the same employers, will not be able to afford the increase in required in the Affordable Care Act law.
Another issue of Obamacare, is the requirement that the employer ask each employee information that pertains to the income his/her spouse earns, and other very personal questions. Contingent on this information, the employer will have to abide by the mandate’s formulations which will determine the pricing of the each employee’s medical insurance. Up to 9.5% of the household income may be required as a result of this new law. The employer will have to report this healthcare premium, on the W-2 at the end of the year, as well as other personal employee/spouse information to the IRS.
It will cheaper for the employer to pay the penalty ($2000 per FT employee) to the IRS and allow their employee and family to go purchase it directly from the health exchanges that will be in every state.
I know Joe I am long in this explanation. You do not file or accept any insurance and you are asking the question if you stand to gain more referrals if you accept insurance and apply to become an “in-network” provider on insurance panels, is that correct correct?
Joe: Yes that is what I am asking.
Kathleen: Here is what I am seeing in my dealings with insurance companies. Some seem to be closed, and have been since 2010. Why, you ask? My guess is that they are “saturated” with providers and/or their financial resources are gearing up elsewhere as a result of the ACA mandate to the insurance companies. I think that if you wanted to expand your practice to include insurance it will not hurt you to begin to apply on the panels that are most utilized in your area.
The reduction of reimbursement from the insurance companies will be in two-forms: 1) client’s high deductible and copays, and 2) reduction of insurance reimbursement. Since the Medicaid Expansion is going to have enormous growth, a mental health provider may want to inquire about being a Medicaid provider.
Joe: So it might be something for self-pay providers to think about?
Kathleen: Yes, you now have to think about how much “extra” the potential client will have in his “discretionary” income after the insurance premiums. More importantly, you will need to think about whether your client base will be able to continue paying a therapist the $120-$150-or more per hour.
In the next year there will be three, named after precious metals, plans rolling out by way of ACA that the IRS will accept. The, cheapest, called the Bronze Plan, for a family of four will cost anywhere between $15,000- $20,000 per year. So it will be important for all of us to factor this in as we price our services.
Joe: What changes will counselors see in billing, getting on panels, and pay?
Kathleen: The sad reality of this I think (my opinion only) is the reimbursement rates will get lower and it will be based on the Medicaid Expansion fee schedule. It has always been this way. The insurance companies have been forced to reduce reimbursements due to government reimbursement pricing with both Medicare and Medicaid since the plan’s inception. People have always thought it was the reverse and that is not the case.
Joe: Within this new framework, how can I make more per hour?
Kathleen: I am not sure I understand the question? Let me try to say, that if you want to continue to charge (self pay), let’s say $150- $200 per hour, just understand the possibility exists that your client base might shrink due to the monthly premium to possibly hover, at about, $700-$900 per month for a family of four. This will include and very high deductible. The client may want you to file against his/her insurance to help meet that deductible. I believe this will be stressful for both parties.
Joe: What hassles are likely to come with taking insurance in the future?
Kathleen: I think that if you are currently on insurance panels,remain informed by the insurance panels general newsletters,and regularly attended webinars, a provider can keep up with the changes. The hassles, you ask? I am not too sure, other than filing insurance claims properly and in a timely fashion, it will help decrease the hassle. If I could predict, I think the private health care insurance companies will shrink in the next three years as the Medicaid Expansion, exponentially grows.This is a big reason, the attempt to expand Medicaid. If your state has opted “in” the expansion, it will be prudent to pay attention to this. Michigan is one of those states. Texas has declined.
Joe: What don’t I know that I don’t know?
Kathleen: LOL! Seriously, if I could expound on one thing for the private practitioner to really understand, it would be the following economic factors:
1) There are approximately 23 Million out of work, 8 Million completely no longer looking for employment, and as of March 8 the statistical unemployment yielded a 14% unemployment rate (cited by CBO-the real number, and in some areas like Detroit it is 24%).
2) 50 Million people are currently on food stamps and climbing.
3) Everyone’s withholding percentages increased as of January 1, 2013.
4) This country has been in a flat-line economy for at least 3 years. (01%-.04% growth in the in the last four years) This country is accustomed to 3%-5% growth. In the 80’s it was as high as 7%.
5) 1 out of 4 are currently on some type of welfare.
6) The economy cannot grow as long as the 6.5 Trillion dollar additional expense of Obamacare continues. And Obamacare is scheduled to cost an additional $6 Trillion.
7) Employers will be reducing hours of FT employees to help reduce their penalty fee.We are reading about this quite a lot right now. Just recently the largest movie theatre chain, Regal Entertainment,has announced a reduction in FT hours for employees.
It is my opinion that our industry (counseling) is one of those services that will be cut from the family budget. It is a luxury-item (of sort) to utilize, if the budget can handle this. I think it is going to behoove each mental health professional to do an economic cost analysis in your town/city/municipality in which you practice. Find the businesses, take the pulse of growth in your city and figure the income of your local community per household. Ascertain what businesses will be leaving or entering your community in the next few years. This may help you develop an outline for your changing business plan to help you survive.
Joe: What else? And why are you so OCD about this?
Kathleen: Yes, there is a lot of information to digest. I am very concerned because this is my livelihood and I want to understand how this new law is going to affect me, my clients, and my business. My desire is to help equip the mental health professional on the business side. All of you who are reading this are exceptional therapists, true to your craft and your therapeutic models and great healers. I just want you to be business ready and business smart about what is coming down the pike. We have until 2014 to get it stronger.
Joe: Who is exempt from the individual mandate? Who doesn’t have to participate in the ACA?
Kathleen: The seven groups that are exempt from purchasing individual insurance are:
- Prisoners.
- Members of the armed services (they already have Tricare- which is another sad story).
- Those already enrolled in Medicare.
- Religious groups – Amish, Quakers, & Christian Scientists are exempt currently. The Catholics and Protestants are not.
- People who don’t qualify for Medicaid and can prove what is called “financial hardship”.
- 11.5 Million Illegal Immigrants.
- Certain young adults under the age of thirty.
I hope this has been helpful for you, Joe. I sound like the Grim Reaper, but I am up for the challenge personally to alter and improve my private practice. I hope others are able to take this information and use it as it may apply to their practice as well. It is important when you are in business to understand your own business model thoroughly. It can help you make the necessary decisions to continue with your business.
2013 is the time to do a business review of your practice standards, marketing and business operations, in order to understand your clientele’s stresses and needs before they schedule their first appointment with you. Developing a strong business plan to reach more perspective clients will be crucial for the mental health professional to do during this year. So by the time the full implementation of Obamacare begins January 1, 2014 you have a little more presence in the community in which you serve. I hope you have a better understanding of what financial obligations your client has too. I hope this has helped you to help you strengthen your business.
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