by jensholger78

Valhalla Insight | Government-Backed Health Insurance

From the perspectives of both employers and employees, it can be difficult to navigate the increasingly complicated landscape of government-backed health coverage. By comparing the different plans available, stakeholders can narrow these options by way of analyzing cost-effectiveness and eligibility. At Valhalla Business Advisors, we specialize in helping businesses, their employees, and their employees’ families understand these complex issues to make informed decisions.

Valhalla Business Advisors is pleased to leverage our business expertise, education, and network to help our community of clients develop resources and solutions to business issues, including the effective implementation and support of government-backed health coverage in employee benefit related contexts. 

WHY IS THIS RELEVANT?

It is important for business stakeholders to know all options they have in front of them before they can make an informed decision for themselves. It is also useful to have enough information presented on each alternative so a client can match the benefits to their individual needs. The purpose of this discussion is to explore government-backed healthcare insurance options including Medicare, Medicaid, MAWD, and CHIP.

MEDICARE

Medicare is a federal health insurance program in the United States that enrolls over 65 million people. It is administered by the government but also includes private insurers that offer Medicare Advantage and Part D plans. Medicare consists of 4 Parts: Parts A-D. 

  • Part A covers hospital insurance and most people do not pay a premium. 
  • Part B covers medical insurance, meaning outpatient care, doctor visits, and preventative services. There is an income-dependent monthly premium associated with Part B. 
  • Part C covers Medicare Advantage, which includes Medicare-approved private insurers offering a combination of Parts A and B as well as drug coverage. There is a monthly premium associated with Part C. 
  • Part D includes prescription drug coverage and requires enrollees to pay an income-dependent monthly premium. 

To qualify for Medicare coverage, one must be 65 years of age or older. There is an exception for people under 65 with certain disabilities (comprehensive list provided by the Social Security Administration), ESRD, or ALS. 

Medicaid

Medicaid is jointly funded by the federal government and the state governments. Therefore, eligibility requirements differ slightly depending on your state. Medicaid is intended to provide free or low-cost health insurance coverage to people with limited resources. There is coverage available for low-income earners, pregnant women, children, people with disabilities, and seniors. There are over 85 million people enrolled in Medicaid in the United States.

To provide an example, the following are eligibility requirements to receive Medicaid for Children in the state of Pennsylvania:

  • Must be under 19 years of age
  • Must be a Pennsylvania Resident
  • Must be a Citizen of the United States
  • Maximum Incomes by Age:
    • Ages 6-18: Up to 133% Federal Poverty Level
    • Up to Age 1: Up to 215% Federal Poverty Level
    • Ages 1-5: Up to 157% Federal Poverty Level

Medical Assistance for Workers with Disabilities (MAWD)

A program offered under Medicaid designed for people with disabilities is Medical Assistance for Workers with Disabilities (MAWD). MAWD is intended to allow people who suffer with disabilities to work so they can earn an income while still qualifying for Medicaid coverage while paying a small monthly premium. People who enroll with MAWD can earn more income than traditional Medicaid allows. To qualify for MAWD coverage, one must be:

  • 16-64 years of age
  • Have a paying job and show recorded work hours
  • Income Limits:
    • Countable resources < $10,000
    • Countable income < 250% Federal Poverty Income Guidelines

    CHIP

    Lastly, the Children’s Health Insurance Program (CHIP) is another program jointly funded by the federal government and the state governments and is an option for families who earn too much income to qualify for Medicaid but not enough to afford private health insurance. The eligibility requirements for the state of Pennsylvania are as follows:

    • Must be < 19 years of age
    • Family income above Medicaid limits but below or equal to 319% Federal Poverty Level
    • Must be a Pennsylvania Resident
    • Must be a Citizen of the United States
    • No other insurance coverage

    There is a common misconception that there is an income limit where high-earners are ineligible to recognize CHIP benefits. This is not true, as anyone can enroll in this program. A family’s income level just determines what price they must pay for CHIP. There are three cost levels based on household income, family size, and the ages of the children. The graphic below shows the cost breakdown.

    The benefits available with CHIP coverage include:

    • Well visits
    • Immunizations
    • Dental, vision, and hearing services
    • Mental health benefits
    • Emergency care
    • Rehabilitation therapies

    SUMMARY

    The purpose of the analysis above was to outline government-backed health coverage programs including those offered through Medicare and Medicaid. The options above are complicated but can serve clients’ needs well, depending on their individual situations. It is important to consider the information including costs, benefits, and eligibility requirements when selecting the right plan option. At Valhalla Business Advisors, we help clients to understand these implications and to make informed decisions based off of what is best for them. 

    The Valhalla advantage

    Valhalla Business Advisors is proud to bring boutique services to clients; Our team and resources can help you. Feel free to reach out to anyone on Team Valhalla to discuss further.

    *****Thank you to Michael Knapp, Analyst, for the research and drafting of this Valhalla Insights blogpost*****

    Additional Resources

    Sources

    Medicare:

    Medicaid:

    MAWD:

    CHIP:

    Sample Scope of Work

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