PRESENTATION TO OBICI HEALTHCARE FOUNDATION

BYJILL HANKEN, STAFF ATTORNEYVIRGINIA POVERTY LAW CENTER

MAY 2012

THE AFFORDABLE CARE ACT

700 E Main St. Suite 1410, Richmond, VA 23219

T: 804-782-9430 F: 804-649-0974

Virginia Poverty Law Center

The statewide support center for legal aid in Virginia providing support in

ADVOCACY

TRAININGLITIGATION

on the civil justice issues faced by low-income Virginians

THE AFFORDABLE CARE ACT

PurposeKey ProvisionsImplementation in VirginiaU.S. Supreme CourtThe Future

PATIENT PROTECTION & AFFORDABLE CARE ACT (ACA)

• Comprehensive care

o Available to all legally in U.S.

o Affordable

• Health Insurers Compete

o On good care and customer service

o Not by denying care.

• Foundation for Better Medical Care

o Effective health care, not just volume

o Leads to lower health care costs

ACA’S MAJOR CHANGES

Big changes on January 1, 2014 Medicaid expansion(+16 million enrolled) State health exchanges created (+24 million insured) Employer and individual mandates

But there are many new improvements & protections in place today.

Private Health Insurance “Patient’s Bill of Rights”

Allows children to stay on parent’s plan until 26th birthday (even if married).*

Ends lifetime dollar caps & phases out annual limits

Ends arbitrary rescissions of coverageEnds denial of coverage for kids with pre-

existing conditions.*

*Some exceptions apply

“PATIENT’S BILL OF RIGHTS”, cont’d

Ends co-pays or other out-of-pocket expenses for Preventive Care*

Gives choices of primary physician and direct access to OB/GYN*

Ends prior authorization for Emergency Care*

Gives new rights to Insurance Appeals

* Some exceptions apply

ENSURING REASONABLE PREMIUMS

Rate Review Federal and state governmentsbegin annual review of healthinsurance premium increases.

Medical Loss Ratio (MLR) Insurers must pay out 80¢ - 85¢of each $1 premium for medicalbenefits -- or pay rebates to consumers.

PRE-EXISTING CONDITION INSURANCE PLAN (PCIP)

“Bridge” to 2014 Uninsured for at least past six months Must have Pre-existing condition(s)

Premiums range from: ≈$100 per month (for children 0-18) ≈$400 per month (adults over age 55)

Deductibles for covered benefits (except for preventive services), & co-pays

Apply on-line www.pcip.gov; www.healthcare.gov

MEDICARE REFORMS

Closing the Rx “Doughnut Hole” o $250 Rebate (2010)o 50% discount brand-name drugs (2011)o Doughnut hole ends by 2020

New preventive benefitso adds comprehensive annual check-up, other

prevention benefitso no out-of-pocket costs.

Improves solvency of Medicare Trust Fund

MORE EARLY REFORMS

Small employer tax credits Up to 35% of premium cost (up to 50% in 2014-2016) Small firms with ≤25 full-time equivalent employees Average annual wages under $50,000

Grants to states Over $182 million to Virginia! Planning Research Workforce Community Health Centers

ACTIVITY IN VIRGINIA

Virginia Health Reform Initiative (VHRI) Reforming Health Care in Virginia

Report Winter 2010 Planning for Health Benefits Exchange

Report Fall 2011 VHRI meetings scheduled Spring 2012 http://www.hhr.virginia.gov/Initiatives/HealthReform/

2011 General Assembly adopted Patient Bill of Rights

2012 General Assembly rejected Exchange Legislation

LITIGATION

Numerous constitutional challenges to individual mandate (and Medicaid expansion) 2 Cases in Virginia

U.S. Supreme Court heard cases in March and will decide by June.

JANUARY 1, 2014 is 20 MONTHS AWAY!

What Happens Then?

MEDICAID EXPANSION

Income limits go up to cover more people <65 133% Federal Poverty Line (FPL)

$14,857 individual; $30,657 for family of 4

Income calculation similar to “adjusted gross income” for income taxes

No Asset Limit for newly eligible people Unless they are over age 65 or receiving long

term care services

“Benchmark” benefits for newly eligible

OTHER MEDICAID

Expansion Funded 100% FFP 2014-2016 95% FFP 2017 90% FFP 2020 and after

Higher RX rebatesIncrease in primary care rates (=

Medicare) in 2013Increase CHIP MatchNew Community Based Long-Term Care

OptionsBut Hospital DSH payments go down

HEALTH BENEFIT EXCHANGE

New Marketplace To compare / purchase private health insurance For people without affordable job-based coverage and

small employers Not affordable if it costs ↑9.5% family income; covers ↓60%

costs

Standardized coverage “Essential Benefits” - hospital, ER, mental health,

maternity, Rx, preventive care, chronic disease management, pediatric (oral/vision) and more.

Premium assistance based on incomeLimits on out-of-pocket costs based on

income

COVERAGE LEVEL OPTIONS IN THE EXCHANGE

4 standard levels:Platinum – 90/10Gold – 80/20Silver – 70/30Bronze – 60/40

Options vary by how much should be covered by the plan and how much is paid by enrollee cost sharingPlus catastrophic plans for people under age 30 or if no other coverage is affordable

40%

30%

20%

90%

80%

70%

60%

10%

0% 20% 40% 60% 80% 100%

MINIMUM COVERAGE REQUIREMENT

Affordability requires spreading risk over large pool that includes healthy people

Who Is Exempt from mandate? o Lowest-price Exchange plan costs > 8% of family income o Income below tax filing threshold (e.g. $9,500 single/$19,000

couple in 2011)o Excused for other financial hardship o Religious objectors o Native Americans o Undocumented immigrantso Incarcerated persons o Those uninsured for less than 3 months.

TAX PENALTIES FOR NON-EXEMPT WITHOUT INSURANCE

• Individual / family penalty is much less than cost of insurance.

2014 - $95 /person or 1% family income 2015 - $325/person or 2% family income 2016 - $695/adult; $375/child or 2.5% family income

(max. $2085/family) • Also penalties on large employers (more than 50

full-time workers) who don’t offer coverage

>$92,200 for a family of four;

>400% of federal poverty line (FPL)

(2012)

Job-based coverage, or Full-cost coverage in the exchange

$69,150-$92,200; 300-400% of FPL

Job-based coverage, or Subsidized exchange coverage: premiums capped

at 9.5% of income

$46,100-$69,150;200-300% of FPL

Job-based coverage, or Subsidized exchange coverage: premiums capped

at 6.3 – 9.5% of income

$30,657-$46,100;133-200% of FPL CHIP

• Job-based coverage, or• Subsidized exchange coverage:

premiums capped at 3% - 6.3% of income

<$30,657 for a family of four; < 133% FPL

Medicaid Medicaid

Children Adults (non-disabled adults,

not eligible for Medicare)

Fam

ily

Inco

me

HEALTH REFORM COVERAGE OPTIONS BY INCOME

WHICH VIRGINIANS WILL GAIN COVERAGE?

Of the over ONE MILLION uninsured Virginians: 420,000 adults are expected to newly qualify for Medicaid 106,000 (adults and kids) are expected to get a

subsidized Exchange plan 100,000 currently eligible but uninsured children are expected to enroll in FAMIS/Medicaid

The rest will remain uninsured . . .

*Urban Institute Estimates, 2011

WHO WILL STILL BE UNINSURED?

U.S. Citizens Exempt from the mandate (no penalty) People who choose not to be covered (penalty may

apply)

Low Income Legal Immigrants Many are ineligible for Virginia’s Medicaid program Can’t afford Exchange products

Undocumented Not covered by Medicaid (except for emergencies),

FAMIS or the Exchange

WEBSITES FOR MORE INFORMATION

Official Gov’t Website – www.healthcare.govFamilies USA – www.familiesusa.orgKaiser Family Foundation – www.kff.org

Thank You!

The Virginia Poverty Law Center is a non-profit committed to serving the needs of low-income Virginians. The work of the center is

supported by individual and corporate donors and through lawyer’s IOLTA accounts. If you would like to find out how to give to our general or specific efforts, please contact us at donate@vplc.org