When it comes to medical insurance, disabled Texans are in a tough spot. While most employers are required to offer COBRA medical insurance coverage to departing employees, COBRA premiums are not “subsidized” and therefore allow the employer to charge the departing employee the full cost of the extended medical insurance. Over the years I have been astounded at the high monthly premiums my clients indicate are required to access COBRA extended benefits. Invariably when I talk with a potentional social security disability client in Dallas Texas who has declined COBRA medical insurance benefits they indicate the premiums were “too expensive”. While I wish I had been able to talk with them before they declined COBRA, as I am sure most Texas disabled workers do not understand how important medical treatment is to winning a social security disability case, it is clear that COBRA is usually not affordable for those out of work.
Medical insurance for disabled Texans is a classic “Catch 22”. Catch 22 is a wonderful term originating with Joseph Heller’s book Catch-22 depicting the absurbities and contradictions of life. Wikepedia gives the following example of a Catch 22: “losing something is typically a conventional problem; to solve it, one looks for the lost item until one finds it. But if the thing lost is one’s glasses, one can’t see to look for them.” In the case of social security disability, medical treatment for the disabling condition is necessary in order to win a social security disability claim. Medical insurance is the primary means of accessing today’s expensive medical treatment. Social security disability recepients are entitled to Medicare after 24 months of entitlement to social security disability benefits. Many that I speak with daily in Dallas Fort Worth tell me their primary goal in seeking social security disability is to secure Medicare. The problem is that they are without medical insurance because they not working, and therefore cannot succeed in their disability case. In other words, they need medical insurance to secure medical insurance (Medicare)!
I was hopeful when the Affordable Care Act rolled out that many of my uninsured clients could secure medical insurance, and many did. But the ACA has not solved the problem I see here in Dallas Texas, and these are my thoughts on why:
- General Texas hostility to “Obamacare” Texas is about as red as state as there is, and we carry a deep suspicion of “big government”. Some have told me they did not apply for ACA medical insurance because of this distrust. One person I spoke with last year told me he abandoned the application for ACA coverage when the online application asked him whether he owned any guns. He reasoned this information would allow the government to come for his guns! I have not verifed this question is indeed asked on the healthcare.gov website, but if it is I suspect this information is sought to examine any correlation between gun ownership and health. In any event it would be a stupid question to ask, and indeed support those “red staters” who see the federal government as too intrusive.
- The “Coverage Gap”. This is not, I think, a “Catch 22”: more like a cluster…well you get my drift. The above infographic by the Henry Kaiser Foundation is helpful to understand this problem unique to states – like Texas – that rejected the expansion of Medicaid under the ACA. The ACA provided for the expansion of Medicaid by states above current income levels and therefore provided for federal medical insurance subsidies only for those at the federal poverty income level and up to 400% of that amount. Medicaid was supposed to cover those under the federal poverty level. But the US Supreme Court struck down the ACA provision that required states to expand Medicaid and ruled that states were free to reject Medicaid expansion. Texas governor Rick Perry wasted no time in rejecting Medicaid expansion under the ACA. The result? Adults that fall into the “coverage gap” of having incomes above Medicaid eligibility limits but below the lower limit for Marketplace premium tax credits get no help! Because ACA intended for state Medicaid to help this segment of the population, this group of Texans make too little, not too much, to get ACA premium subsidies. Kaiser estimates that 948,000 Texans are in this “coverage gap”.
- High deductibles and copays. ACA premiums that are subsidized have been described as “dirt cheap”. The above chart, however, indicates that ACA rates for 2015 in Dallas Fort Worth are likley to increase up to 10%. The state of Texas has elected not to expand Medicaid under the ACA. Therefore even Texans earning above the federal poverty line of $11,670 for an individual may also receive subsidies to purchase insurance on the ACA marketplaces. Yet despite these subsidizes, there are still deductibles and co-pays to deal with. ACA coverage for 2015 provides for an out-of-pocket limit of $6,600 for an individual, and $13,200 for a family. For someone with a serious medical condition (i.e., a person unable to work due to a medical condition) it is easy to spend up to the out-of-pocket limit. Few disabled Texans that are unable to work can afford to spend over $6000 a year in out-of-pocket medical expenses.
Open enrollment for the ACA in 2015 starts today. Despite the limitations of the ACA, I encourage all disabled Texans without medical insurance to examine their options well before ACA enrollment closes on February 15, 2015. The individual mandate penalty for those not securing medical insurance is unlikely to affect the disabled as there are a number of exemptions for those with very low incomes.