REGIONAL CONFERENCE ON ENDING HOMELESSNESS MARCH 2014 JILL HANKEN, STAFF ATTORNEY VIRGINIA POVERTY LAW CENTER THE AFFORDABLE CARE ACT & HEALTH CARE FOR LOW INCOME VIRGINIANS 700 E Main St. Suite 1410, Richmond, VA T: F:

PATIENT PROTECTION & AFFORDABLE CARE ACT “ACA” – “Obamacare” More Insurance Coverage o Available to all legally in U.S. o Affordable Private Insurance Reform o Good care and customer service o Not by denials of care Better Health Delivery Systems o Effective health care, not just volume o Leads to lower health care costs

Impact in Virginia One Million Uninsured Virginians o 60% have incomes ≤ 200% FPL. o 70% are from families where someone works full or part-time. o Virginia’s network of health clinics can’t meet the need Coverage changes on January 1, 2014  State Option for Medicaid Adult Coverage  New Insurance Marketplace – Affordable Private Coverage  People/Businesses Required to Have/Provide Insurance Many new improvements & protections have been in place.

Private Health Insurance “Patient’s Bill of Rights” Allows children to stay on parent’s plan until 26 th birthday (even if married).* Ends lifetime dollar caps & phases out annual limits Ends denial of coverage people with pre-existing conditions.* Ends co-pays or other out-of-pocket expenses for Preventive Care* *Some exceptions apply

ENSURING REASONABLE PREMIUMS Premiums can be based on age, geography, smoking – not sex or health status Annual Rate Review  Federal and state governments insurance premium increases ≥ 10% Medical Loss Ratio (MLR)  Insurers must pay out 80¢ - 85¢ of each $1 premium for medical benefits -- or pay rebates to consumers. o Virginia’s 2012 rebates = $43 million to over 685,000 residents

MEDICARE REFORMS Closing the Rx “Doughnut Hole” o $250 Rebate (2010) o 50% discount brand-name drugs (2011) o Doughnut hole ends by 2020 o Virginians have already saved $84+ million New preventive benefits o Adds comprehensive annual check-up, other prevention benefits o No out-of-pocket costs.

MORE EARLY REFORMS Small employer tax credits  Up to 35% of premium cost (up to 50% in )  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

Will Virginia Adopt the Medicaid Expansion? Current Medicaid coverage is very limited  46 th in per capita Medicaid spending  44 th in parent eligibility ( ↓ $10,000/yr family of 4)  No coverage for childless adults New Income Limits cover more people <65  138% Federal Poverty Line (FPL)  $16,105 individual; $32,913 for family of 4 ≈ 400,000 Low Income Adults could be covered.

Medicaid Expansion in Virginia Who would qualify?  Patients receiving state mental health services  Uninsured Adults aged  Disabled waiting for Medicare  Low-income working parents  Kids aging out of Medicaid Federal Funding supports health, jobs, economy  100% Federal Funding  Reduces to 90% by 2020 and after  DMAS 10 yr. estimate: ≈$20 billion federal  30,000 jobs & increased tax revenues  Offsets costs of state-funded programs (≈$1 billion state savings!)

No Expansion = Coverage Gap

What Did 2013 General Assembly Do? Virginia legislature approved expansion only IF many Medicaid reform conditions are met.  Dual-eligible project  Fraud Prevention  Services more like commercial insurance  Stricter preapproval for behavioral health / transportation  Expanded care coordination / managed care “Medicaid Innovation & Reform Commission” to oversee reforms and decide when/if conditions are met.  10 Legislators  4 Meetings & Public Hearing

What Did 2014 General Assembly Do? Governor McAuliffe supports Medicaid expansion Major opposition in House of Delegates Virginia Senate included compromise in its budget:  “Marketplace Virginia”  For those with income under 138% FPL to purchase private health insurance  New requirements for personal responsibility (cost-sharing, work-search, prevention/wellness) Gridlock in budget negotiations – Adjourned 3/8 without a budget  Governor has announced Special Session for March 24

New Insurance Marketplace New Federal Marketplace  Open Enrollment 10/01/2013 – 03/31/2014  Coverage began January 1, 2014  “Special Enrollments” possible after 03/31 To compare / purchase private health insurance Very poor initial roll-out, but major problems now resolved

Insurance Marketplace How Does It Work? Eligibility for Tax Credits to help pay insurance premiums  Not receiving or eligible for “minimum essential coverage” (Medicaid, FAMIS, Medicare)  No “affordable ” job-based coverage  Not affordable if employee-only plan costs ↑ 9.5% family income; covers ↓ 60% costs  Income is between 100% and 400% of federal poverty line  “Household” is Tax Filing Unit  “Income” is IRS Adjusted Gross Income (+ Social Security + tax exempt interest and foreign income) “SHOP” Marketplace also available to small employers  Fewer than 50 “full time equivalent” employees

Insurance Marketplace How Does It Work? Multiple “doors” for applications  Online –  Phone (federal and state call centers)  Virginia Departments of Social Services Data bases for verification of information  Paper documents last resort Standardized coverage  “Essential Health Benefits” - hospital, ER, mental health/substance abuse, maternity, Rx, preventive care, chronic disease management, pediatric (oral/vision) and more.

Insurance Marketplace How Does It Work? Types of Standard Plans:  4 Tiers of Coverage Bronze – lower premiums, higher out-of- pocket costs Silver Gold Platinum – best coverage, highest premium  Catastrophic coverage for people under age 30 & people exempt from requirement to have insurance  Very high deductible

Insurance Marketplace How Does It Work? Premium assistance (tax credits) based on family’s income. E.g:  100% FPL income pay 2% of income on premiums  400% FPL income pay 9.5% of income on premiums Individual’s Income$15, 280/year (133% fpl) Maximum Contribution 2% Income = $306/ yr Cost of Silver Plan$5,000 Subtract Contribution – $306 Annual Federal Tax Credit $4,694

Insurance Marketplace How Does It Work? Using the tax credits  Can use same tax credit for other tier plans  Can receive credit in advance to help pay monthly premiums  report changes in income / family size to adjust during year  “Reconciliation” at tax time Limits on out-of-pocket costs  Special protections for those with income under 250% FPL  Only applies if Silver Plan is purchased

Enrollment Assistance Official Gov’t Website – Federal Call Center – State – State Call Center – Navigators www.enroll-virginia.com Subsidy Calculator -

Minimum Coverage Requirements Affordability requires spreading risk over large pool that includes healthy people Mandates Apply to Individuals & Large Employers (over 50 full-time employees) Who Is Exempt from Individual Mandate? o Lowest-price Exchange plan costs > 8% of family income o Income below tax filing threshold (e.g. $9,750 single/$19,500 couple in 2012) o Excused for other financial hardship o Religious objectors o Native Americans o Undocumented immigrants o Incarcerated persons o Those uninsured for less than 3 months.

Minimum Coverage Requirements Tax Penalties Individual / Family penalty is much less than cost of insurance.  2014 – higher of $95 /adult or 1% family income  2015 – higher of $325/adult or 2% family income  2016 – higher of $695/adult; $375/child or 2.5% family income (max. $2085/family) Large Employer Penalty in 2015 if affordable coverage not offered.

Which Virginians will Gain Coverage? Of the over ONE MILLION uninsured Virginians:  400,000 adults could qualify for Medicaid if/when new expansion is adopted.  300,000 (adults and kids) could qualify for a subsidized Exchange plan  71,000 currently eligible but uninsured children are expected to enroll in FAMIS/Medicaid The rest will remain uninsured...

Who Will Still Be Uninsured? U.S. Citizens  Those in the Medicaid Coverage Gap due to expansion delay  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