Health insurance exchange coverage and ESRD: What we know

When someone develops end-stage renal disease and joins the new Health Insurance Exchange’s Qualified Health Plans (QHPs), there are several things to consider.

1. Individuals already in a QHP can remain in that plan when they develop ESRD. Language from the Exchange Final Rule, released in March 2012, states: “We note that neither the proposed nor final rule state that individuals will automatically be terminated from Exchange coverage should they be found eligible for Medicare…Individuals do not have to terminate coverage and QHP issuers must not terminate coverage when an individual becomes enrolled in other minimum essential coverage unless such individual requests a termination.”

Individuals who choose to remain in their QHP and enroll in Medicare should be aware that they may lose their eligibility for premium subsidies. However, premium subsidies should be maintained until actual Medicare enrollment. From IRS Notice 2013-41, June 2013:

“[T]his notice clarifies that, for purposes of the premium tax credit, an individual is eligible for minimum essential coverage under Medicaid or Medicare in the circumstances described below only upon a favorable determination of eligibility by the responsible agency:

• Medicaid coverage requiring a finding of disability or blindness.

• Medicare coverage based solely on a finding of disability or illness.”

2. Medicare Secondary Payer (MSP) provision applies to Small Business Health Options Program (SHOP) plans.This was clarified in the Exchange Final Rule: “We clarify that QHPs offered in the small group market fall under the definition of a group health plan subject to MSP provisions codified in section 1862(b)(1) of the Social Security Act. This would result in parity between the SHOP and non-Exchange small group market regarding the applicability of MSP rules that pertain to ESRD coverage.” Therefore, if someone has an Exchange health insurance plan in the small group market and then develops ESRD, the QHP will be the individual’s primary insurance for up to 33 months.

3. QHPs must follow certain non-discrimination requirements.The Essential Health Benefit (EHB) final rule from February 2013 states, “An issuer does not provide EHB if its benefit design, or the implementation of its benefit design, discriminates based on an individual’s age, expected length of life, present or predicted disability, degree of medical dependency, quality of life, or other health conditions.”

4. Medicare entitlement or eligibility does not disqualify individuals from enrollment in a QHP. Qualified health plans should not disqualify someone from enrollment based strictly on whether an individual is entitled to Medicare because the individual is not actually “eligible” for Medicare benefits if they have not enrolled and received a favorable determination of eligibility. Enrollment in Medicare requires the submission of an application to the Social Security Administration (SSA) and a completed CMS-2728 form in the case of individuals with kidney failure. Therefore, choosing to keep a QHP and delay enrolling in Medicare is an option. However, those who have an Individual QHP on an Exchange and choose to delay Medicare enrollment should be aware that they may incur a delayed Medicare enrollment penalty when they do choose to enroll in Medicare. Supporting materials include the following:

• Social Security Administration, Section 226A: “Individuals medically determined to have kidney failure may be eligible for Medicare coverage, but must file an application for benefits.”

• IRS Notice 2013-41: “An individual is eligible for Medicare coverage only upon a favorable determination of eligibility by the responsible agency (i.e., either SSA or CMS).”

If the individual does not file an application (i.e., enroll), such a determination cannot be made. Thus, individuals with kidney failure who could enroll in Medicare may choose instead to purchase insurance through an exchange, or maintain their previously purchased exchange coverage, with or without premium subsidies. Public Health Service Act, Section 2702 states, “…each health insurance issuer that offers health insurance coverage in the individual or group market in a state must accept every employer and individual in the state that applies for such coverage” [except for specified reasons, which do not include eligibility for Medicare].

Dialysis providers are working with the U.S. Department of Health & Human Services and state Departments of Insurance as policies become publicly available for inspection and do not comply with the above criteria. Meetings have already been held in California, Connecticut and Colorado. Additional advocacy will likely be required in these and other states. -by Wendy Funk Schrag, LMSW, ACSW