Healthcare 2014: What you need to know about the Affordable Care Act (ACA)

1. Healthcare 2014: What you need to know about the Affordable Care Act (ACA) AID Gwinnett Community Forum September 17, 2013 Bill Rencher, JD, MPH Director, Health Access Program Georgia Watch www.georgiawatch.org

2. Why do we need health reform? • Healthcare spending is growing faster than the economy and wages • U.S. ranks last in key health outcomes among developed countries • Georgia ranked 36th of the states in 2012 in terms of overall health measures • Lack of broad access to healthcare increases costs and health disparities

3. U.S. Healthcare “System” (pre-ACA) • Employer-sponsored group private insurance • Individual private insurance (not available for those with pre-existing conditions) • Medicare, Medicaid, CHIP • Veteran health benefits • Other programs, such as Ryan White / ADAP • Charity Care • 48 million uninsured Americans • Nearly 2 million in Georgia

4. The basis for the ACA • Builds on the current system of private insurance coverage • Similar to reforms in Massachusetts • Three fundamental characteristics: • Regulation of Health Insurance • Coverage Mandates • Government programs to help make insurance more affordable and accessible

5. Regulation of Health Insurance • Beginning January 1, 2014, insurance companies can no longer deny coverage or raise premiums based on pre-existing conditions • Premiums can only be based on age (3:1 limit), location, family composition, and smoking status • Children can stay on parents’ plan until 26 • No more lifetime or annual limits

6. Coverage Mandates • Requires all U.S. citizens and legal residents to have health insurance or pay a tax penalty • Tax penalty phased in over three years, starting at $95 in 2014 and rising to $695 in 2016, but always capped at 2.5% of household income • Exemptions granted for hardships, poverty, and other reasons • Employers with 50 or more full time employees required to offer coverage

7. Government Programs • Medicaid Expansion • Requires states to expand Medicaid to cover all individuals making $15,000 / year or less • Made optional by Supreme Court decision • Health Insurance Marketplace • Individuals and small businesses can purchase private health insurance and receive cost assistance in the form of tax credits • Run by federal government in Georgia

8. More about the health insurance marketplace

9. The basics • Individuals and small businesses (<100) can purchase private health insurance for themselves, their families, and employees • Terms must be explained clearly • Consumers can compare various plans and costs side by side and choose what is best for their health and financial situation

10. The basics • Georgia’s marketplace, will be run by the federal government • Online access will be provided through www.healthcare.gov • Consumers can also apply by phone, by mail, or in person (1-800-318-2596) • Open enrollment begins October 1, 2013 for coverage beginning January 1, 2014

11. All plans must cover: • Doctors’ visits • Emergency care • Hospitalizations • Maternity / baby • Mental health • Prescriptions • Rehabilitative and habilitative care • Laboratory Services • Preventive care and chronic disease management • Pediatric care, including dental and vision

12. Insurance plans offered • Five companies will offer plans for Georgia in 2014: • Alliant • Blue Cross and Blue Shield • Humana • Kaiser Foundation • Peach State • More may be added in subsequent years

13. Types of plans offered • Various plans must be classified according to the average portion of healthcare expenses covered: • Bronze (60%) – lowest premium; highest out-of-pocket costs • Silver (70%) • Gold (80%) • Platinum (90%) – highest premium; lowest out-of-pocket costs • Standardization of plans will make it easier for consumers to compare benefits and price and choose the best plan for their needs

14. Premium subsidies • To help purchase insurance • Based on sliding scale and available to: • Individuals making $11,500 to $46,000 / year • Families (4) making $23,500 to $94,200 / year • The subsidy is the same regardless of how expensive the plan you choose • Can take the subsidy as lower monthly premium or end of year tax credit

15. Premium subsidy example • Judy makes $22,980 / year • Based on her income she is entitled to a $180 / month subsidy or $2,160 / year • Suppose Judy wants a silver plan that costs $300 / month? It would only cost her $120 • What if she bought a more expensive gold plan at $350 / month? It would cost her $170

16. Premium subsidies • The amount of the subsidy will be calculated by computer at time of enrollment based on an income formula • Because subsidies are actually tax credits, these amounts will have to be reconciled on annual income tax return • If you choose monthly subsidy and income increases, you will have to pay the difference between what you were entitled to and what you actually received

17. Premium subsidies • So in our example, if Judy got a raise and her income ended up being $28,725, she would have gotten too much • Based on the formula, she was only entitled to an annual credit of $1,285. • But she received $2,160 • So she will owe $875 • Contact the marketplace whenever your situation changes

18. Cost-sharing • Out of pocket limits for all plans are based on income and will range between: • $2,000 to $6,000 / year for an individual • $4,000 to $12,000 / year for a family (4) • Additional cost-sharing reductions available to: • Individuals making less than $28,500 / year • Families (4) making less than $58,800 / year • If they purchase a silver plan!

19. Help with enrollment • www.healthcare.gov • 24/7 Call Center: 1-800-318-2596 • Navigators • Certified Application Counselors • Community Organizations, such as: • AID Gwinnett • Georgia Watch • Atlanta Legal Aid Society • Anyone can answer questions

20. No Medicaid expansion for GA • Premium subsidies not available to: • Individuals making less than $11,500 / year or • Families (4) making less than $23,500 / year • Supposed to be covered by Medicaid, but Supreme Court made expansion optional • Georgia has chosen not to participate • These folks will have to continue to rely on charitable care if they are not already eligible for Medicaid or another program

21. Ryan White / ADAP • Ryan White recipients who qualify for subsidized health insurance in the marketplace must enroll to stay in RW program (“vigorously pursue”) • Insurance companies must contract with “Essential Community Providers” which would include Ryan White providers (but not necessarily all RW providers) • ADAP will cover out-of-pocket costs for HIV drugs (co-pays, deductible, etc.)

22. Ryan White / ADAP • For Medicare patients, ADAP spending on HIV drugs counts toward getting through the “donut hole” • Those below threshold for premium subsidies will continue to receive care through Ryan White and ADAP, as long as programs are funded • Shifting some HIV patients to private insurance in marketplace should relieve some of the strain on HIV programs • But the situation in Georgia would have been even better with Medicaid expansion

23. Resources • www.healthcare.gov (will be the exchange portal for Georgia) or 1-800-318-2596 • HIVHealthReform.org • hab.hrsa.gov/affordablecareact • www.familiesusa.org/health-reform-central/ • www.enrollamerica.org • www.kff.org • www.apha.org/advocacy/Health+Reform/ default.htm • Bill Rencher: brencher@georgiawatch.org; 404-525-1085