Contraceptive coverage: mostly free, but read the fine print

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birth control

This week, I answer readers' questions about birth-control coverage requirements under the Affordable Care Act and subsidized coverage on the state-based health insurance exchanges.

Q: Regarding contraceptive coverage, some non-grandfathered plans, while initially offering no-cost contraceptives, have now informed their group members that only certain generic oral contraceptives are covered at no cost. Brand treatments are subject to co-pays. How can they get away with that?

A: They can't, except under a few conditions.

Under the health law, most employers and insurers have to cover all FDA-approved methods of birth control for women without charging members any out-of-pocket costs. The list includes birth control pills, intrauterine devices, hormonal shots and implants, the patch and contraceptive sponges, as well as sterilization. (Certain religious employers as well as plans that are grandfathered under the law are exempt from these requirements.)

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But new guidance released by the federal government last month says health plans can use "reasonable medical management techniques" to keep their costs under control. So if there is both a generic and a brand-name version of a birth-control pill available, for example, a plan could decide to cover only the generic version without cost to the patient. If there is no generic version of a pill available, or if a woman's doctor decides a brand-name version of a drug would be better for her than a generic, health plans have to cover the cost of the drug.

Q: I'm in a pre-Medicare retirement insurance plan offered by my employer, but it is very expensive. After Jan. 1, 2014, will I be able to apply for alternate insurance through the health exchanges and get my insurance at a lower price?

A: Anyone can buy a plan on his health insurance exchange, which will be running in January. If you meet certain criteria, you may also be eligible for a federal tax credit to help make the coverage more affordable.

Retirees who are offered employer-sponsored coverage will have to meet the same eligibility standards for tax credits as active employees who are offered coverage through their jobs, says Sabrina Siddiqui, a spokeswoman for the Treasury Department. To qualify for a tax credit, the coverage offered by an employer must be either unaffordable, which is defined as having a premium that exceeds 9.5 percent of household income for individual coverage, or inadequate, meaning that it covers less than 60 percent of allowed medical costs. 

If a retiree's coverage is considered unaffordable or inadequate by those standards and if his household income is between 100 percent and 400 percent of the federal poverty level ($11,490 to $45,960 for an individual in 2013), he could be eligible for a premium tax credit, according to the Treasury Department.

Q: I live in Georgia, which has refused the Medicaid expansion. Is there any legislation in the works for those individuals who are below the federal poverty level who reside in states that are not expanding Medicaid?

A: Low-income people who live in states that have decided not to implement the Affordable Care Act's Medicaid expansion are in a tough spot. But given the political divisiveness of this issue, experts say the likelihood of a legislative fix for this problem is small.

In many states, Medicaid eligibility is tightly restricted. The health law called for states to expand that eligibility to people with incomes up to 138 percent of the federal poverty level ($15,856 for individuals in 2013). But the Supreme Court ruled last year that states are not required to do so. About half the governors so far have announced that they want to go forward with expansion of the federal-state health program for low-income people.

If you don't qualify for Medicaid and your state has decided against expanding eligibility for the program, you can look for a plan on the health insurance exchange. But ironically, you may not make enough money to qualify for the federal premium subsidies that will be offered to people with incomes between 100 and 400 percent of the poverty level. Without that financial help, coverage will likely be unaffordable, says Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities.

"You probably can't get coverage [on an exchange] even though you're more needy than someone with higher income," Park says.

This article was produced by Kaiser Health News with support from The SCAN Foundation.

Please send comments or ideas for future topics for the Insuring Your Health column to [email protected].

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

Copyright 2014 MedCity News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

By Michelle Andrews

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