Considerations Regarding Medicaid and Medicare under the Affordable Care Act and Its Effect on Injured Workers
Medicaid is a state-administered program that is partially federally funded which provides health care for individuals and families with low income and resources. North Carolina has adopted an asset based test for Medicaid. The ACA mandated an expansion of Medicaid so that families and individuals with income up to 133 percent of the poverty level would be eligible for Medicaid. However, in Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S.Ct. 2566, 52 U.S. ___ (2012), the Supreme Court ruled that states that refused to expand Medicaid coverage could not be threatened with a complete loss of Medicaid funding. Twenty-five states, including North Carolina, rejected federal expansion of Medicaid. Therefore, the North Carolina guidelines remain in effect for those seeking Medicaid.
Until 1980, Medicare was the primary payer of all medical costs, except in workers’ compensation cases. After 1980, Medicare has always been known as a secondary payer to liability insurance, no-fault insurance, and workers’ compensation insurance. In 2007, a new law was enacted to mandate reporting to Medicare of any beneficiaries who have coverage under a group health plan as well as for Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance, no-fault insurance, or workers’ compensation.
The reporting requirements began October 1, 2011, and required parties to pay past conditional payments as well as to take into account Medicare’s interests for future medical costs. In other words, Medicare set-asides became enforced in the world of workers’ compensation.
The ACA does not directly address injury settlements like the MMSEA. In the nearly one thousand pages of law that addresses nearly all facets of health care, there is little mention of lawsuits or settlements. In fact, the only mention of injury lawsuits is contained in a section of the ACA addressing medical malpractice reform. That section encourages (but does not mandate) states to develop tests and alternatives to the existing civil litigation system as a way of improving patient safety and to resolve medical malpractice claims.
When comparing the ACA, which does not address liens or subrogation, to the MMSEA, which mandates conditional payment reimbursement and set-asides, it is unlikely that workers’ compensation or liability settlements will be subject to a lien or an ERISA subrogation right for medical benefits paid under an ACA created health care plan. These plans are still private insurance plans subject to the North Carolina anti-subrogation regulation. There is nothing in the ACA that mentions federal preemption or ERISA. Therefore, at this time, it is safe to conclude that ACA created health care plans will not have a right to reimbursement nor would a medical set-aside be required.
Rejection of Federal Medicaid Expansion
North Carolina’s rejection of federal Medicaid expansion did not put workers’ compensation clients in a worse position than before the passage of the ACA. Those who have denied claims with no income and can produce high medical bills can still apply for state Medicaid assistance. However, for those clients who are currently receiving weekly workers’ compensation benefits, or who receive a settlement, the rejection of federal Medicaid expansion puts them at a disadvantage in comparison to similarly situated injured workers in states that accepted federal Medicaid expansion. In essence, our clients who receive TTD have too little countable income to meet the federal subsidy standards, and have too much income to meet the North Carolina asset test.
However, that does not mean that they still cannot qualify for a subsidy if other members of their household are working. The injured worker could ask a spouse or other household member to secure coverage for them. In an example with someone who is on TTD and has one child and a spouse, the spouse’s income would count toward eligibility for the premium tax credit. For a family of three, the spouse would need to earn at least $19,530 and could earn up to $78,120 and still be eligible for health insurance subsidies. In that example, the family of 3 could also qualify for cost-sharing credits if the spouse earns at least $19,530 but no more than $48,825 (which is between 100 percent and 250 percent of FPL for a family of 3).