Mike McBride III, who chairs the Indian Law and Gaming Practice Group at Crowe & Dunlevy in the firm’s Tulsa office, and Cori H. Loomis, a director member of the firm’s Healthcare Practice Group in Oklahoma City, explain why American Indians and Alaska Natives should care about the Affordable Care Act.
With citizens of federally recognized tribes able to claim a tax exemption from the Affordable Care Act, why should Native Americans be concerned about the ACA?
Even though federal law exempts Native Americans from the individual mandate and the law will not subject them to any financial penalties for not purchasing health insurance, there are benefits to doing so. First, federal law exempts Native Americans who enroll in private health insurance plans offered through a health insurance exchange from cost-sharing requirements if their income is not more than 300 percent of the federal poverty level (approximately $70,650 for a family of four). This means no deductibles, copayments or co-insurance payments. To the extent that a Native American incurs costs or needs medical care that cannot be acquired through an Indian Health Service (IHS) or tribal provider or facility, this exemption from cost-sharing requirements could result in significant cost savings.
Second, Native Americans can continue to enjoy access to IHS or tribal programs, while gaining access to any providers participating in the exchange plans. Native Americans may not have easy or convenient access to an IHS or tribal facility or clinic. If this is the case, using private insurance to cover medical care is far better economically than paying out of pocket. Third, private insurance plans offered through the exchanges will cover conditions and treatments not otherwise available at some IHS or tribal clinics. Unless a Native American lives close to an acute care hospital operated by IHS or a tribe, having access to private insurance to pay for catastrophic or chronic illnesses or conditions is important. Finally, Native Americans will experience financial benefits due to an amendment to the Medicare Part D program that permits costs paid by IHS for prescription drugs for Medicare Part D beneficiaries to count toward the beneficiaries’ out-of-pocket threshold for catastrophic protection. For a Part D beneficiary to receive catastrophic protection, a certain level of out-of-pocket expenses had to be incurred. Prior to the ACA, expenses incurred by IHS, on behalf of a Part D beneficiary, did not count toward the catastrophic threshold.
What are some of the more common misconceptions and questions related to the IHS exception that have arisen when discussing the Affordable Care Act in Indian country?
The most common misconception is that since Native Americans are not subject to a financial penalty or tax for not purchasing insurance, then there is no reason or incentive for them to purchase insurance through an exchange. This is not accurate.
Another misconception is that it is now too late for a Native American to sign up for insurance through the exchange since the deadline for open enrollment that was so heavily touted in the media (March 31, 2014) has now passed. For Native Americans, it’s not too late. The March 31 deadline did not apply to Native Americans. Members of federally recognized tribes can enroll in coverage through a marketplace exchange any time of year. There is no limited enrollment period for these groups, and they can change plans as often as once a month.
Are there other provisions of the ACA that uniquely apply to Native Americans?
Aside from the key provisions applicable to individual Native Americans above, several ACA provisions provide significant benefits to the Tribes. First, the ACA permanently reauthorized the Indian Health Care Improvement Act (IHCIA), which expired in 2000, and extends appropriations for many important IHS programs indefinitely. The IHCIA authorizes many IHS programs and services and sets out national policy for Native American health services. The ACA amended several provisions of the IHCIA to (a) permit tribal organizations to apply for contract and grant programs for which they were not previously eligible; (b) create new mental health prevention and treatment programs; and (c) require demonstration projects to construct modular and mobile health facilities in order to expand services. Second, the ACA amended the IHCIA to permit tribal programs and providers to directly bill and collect from Medicare, Medicaid and other third-party insurers which should significantly increase revenues to such facilities.