Health Coverage under the Affordable Care Act

1. Health Coverageunder theAffordable Care Act John S. Whitelaw Kristen M. Dama October 23, 2013

2. The Affordable Care Act (ACA) • Three primary prongs of health coverage: • Employment-based coverage • New rules about who must be covered and what benefits must be provided – not covered in this training. • Private coverage through the MARKETPLACE • Medicaid • (Medicare is still an option – no change to coverage)

3. Most Important Information • Federal enrollment web site: www.healthcare.gov • Federal enrollment hotline: 1-800-318-2596 • Local help is available, too: localhelp.healthcare.gov

4. What’s New Under the ACA? • The Affordable Care Act (ACA) creates a new online “shopping center” for health insurance, called the Marketplace. • The Marketplace is where individuals go to buy private health insurance, and to receive financial help to offset costs.

5. What’s New Under the ACA? • Open enrollment runs from October 1, 2013 to March 31, 2014. • People may apply for Medicaid/CHIP at any time of the year. • People may apply for insurance through the Marketplace outside open enrollment if they have a “qualifying life event”: • Birth of a child • Death of household member • Change in employment • Divorce or marriage • Move in or out of state where they had coverage

6. What’s New Under the ACA? • Coverage through the Marketplace is available beginning on January 1, 2014. • Tax credits are available to help people between 100% and 400% of the poverty level pay for insurance premiums through the Marketplace. • Cost-sharing subsidies are available to people between 100% and 250% of the poverty level to pay for copayments and other costs.

7. What’s New Under the ACA? • Medicaid is available for some adults below 100% of the poverty level (more on this later). • Medicaid or CHIP is available for children between 0% and 400% of the poverty level (more on this later). • States can expand Medicaid to cover almost everyone below 100% of the poverty level – Pennsylvania has not yet taken this option.

8. What’s New Under the ACA? • New eligibility rules for financial help through the Marketplace, Medicaid, and CHIP: • Uses Modified Adjusted Gross Income (MAGI) methodology, based on tax rules. • Alters current eligibility rules for many Medicaid applicants and recipients. • NOTE: No Medicaid eligibility changes for individuals with disabilities and seniors (Healthy Horizons, MAWD, Waiver and Nursing Home programs).

9. Three “Buckets” of Coverage • Traditional Medicaid (a.k.a. Medical Assistance or MA) • Medicaid and CHIP under MAGI Rules • Private insurance through the Marketplace

10. Medicaid

11. Traditional Medicaid • The traditional Pennsylvania Medicaid program provides free or very low-cost health insurance to low-income, low-asset Pennsylvanians who meet certain “categorical” requirements for eligibility. • While Medicaid rules will change for most current Medicaid recipients, they will stay the same for individuals with disabilities and seniors. • Programs include Healthy Horizons, MAWD, Waiver, and Nursing Home programs.

12. Healthy Horizons Medicaid • Individuals may receive Healthy Horizonsif they are 65 and older or have disabilities that will last for twelve months or longer. • $2,000 resource limit for single adults; $3,000 for couples and families. * $20 income disregard; $65 plus 50% earned income disregard.

13. Medical Assistance for Workers with Disabilities • Individuals with too much income or resources for Healthy Horizons may receive Medical Assistance for Workers with Disabilities (MAWD) if: • They have disabilities that last for twelve months or longer. • AND they work at least one hour per week. • They will be required to pay a premium based on income (5%) – usually $50 to $100 per month. • $10,000 resource limit for everyone. * $20 income disregard; $65 plus 50% earned income disregard.

14. GA-Related Medical Assistance (Last Resort) • Individuals with very little income may receive state funded Medical Assistance if they: • Have short-term disabilities (lasting longer than 30 days but less than twelve months). • Are domestic violence survivors (9 months in a lifetime). • Are in active drug and alcohol treatment (9 months in a lifetime). • Are caring for unrelated children or individuals with disabilities. • Need health-sustaining medications. * $250 resource limit for single adults; $1,000 for everyone else.

15. Medicaid and CHIP under MAGI • MAGI = Modified Adjusted Gross Income methodology for calculating eligibility. • Applies to Medicaid in non-elderly, non-disabled/GA-related categories: • Children. • Pregnant women. • Parents and related caretakers. • Non-disabled, non-GA-related adults under 65 in Medicaid expansion states will use MAGI rules (not in Pennsylvania).

16. MAGI Analysis for Medicaid and CHIP • Based on tax rules. • Two steps: • Who is in the household? • What income counts toward eligibility?

17. Step One: Household Composition – Person-by-Person Analysis • Analysis is based on expected filing status for the tax year of application or renewal. • Every person is assigned one of three categories – it is a person-by-person analysis. • There is no such thing as group/family status!

18. Household Composition • Three categories of individuals: • Tax Filer: a person who expects to file a tax return. • Tax Dependent: a person who expects to be claimed by another taxpayer. • Non-Filer: aperson who does not expect to file a tax return and does not expect to be claimed by another taxpayer.

19. Household Composition • For Non-Filers, the household is generally parents, step-parents, and children. • Some Tax Dependents are treated as Non-Filers for Medicaid – the rules can get complicated. • Complicated scenarios: • Children living with non-parent relatives. • Children living with unmarried parents. 19

20. Step Two: Income • Household income = the sum of MAGI of all individuals in the household, as defined in Step One. • The income of children and Tax Dependents is not counted unless they are expected to file a tax returns.

21. Income • Income that is counted: • Wages and tips • Pensions and annuities • Unemployment compensation • Self-employment income • Dividends and taxable interest • Alimony received • Rent received • Social Security 21

22. Income • Income that is not counted: • SSI • TANF • Worker’s compensation • Veteran’s benefits • Child support • Gifts 22

23. Income: MAGI vs. Traditional Medicaid • MAGI income counting rules differ significantly: • Some income that is currently counted is no longer counted (e.g., child support, worker’s compensation benefits, veteran’s benefits, many public benefits). • New household rules result in changes in whose income is counted (e.g., step-parents). • Most income disregards and deductions are eliminated. • Current income limits were changed. 23

24. New Income Limits * DPW’s calculation of the 5% disregard is incorrect, and may change in the coming months. 24

25. No Asset Test for MAGI Medicaid • Resources do not matter for individuals who qualify for MAGI Medicaid. • Resource rules still apply for seniors, individuals with disabilities, and individuals who qualify for GA-related MA.

26. Young Adults Aging out of Foster Care • Regardless of income or assets, Medicaid is available for individuals who: • Are under age 26; • AND are not otherwise eligible for or enrolled in Medicaid; • AND were receiving Medicaid in federal or state-funded foster care on or after their 18th birthday.

27. Immigrant Eligibility for Medicaid and CHIP • The rules for immigrant eligibility for Medicaid do not changeunder the ACA. • Lawfully present immigrants who are pregnant or children are eligible for Medicaid without a wait. • Certain other qualified immigrants – refugees, asylees, Cuban-Haitian entrants, and some others – are eligible without a wait. • Most other qualified immigrants must be lawfully present for five years to qualify for federally funded Medicaid. • Immigrants subject to the “five-year bar” may qualify for state funded Medical Assistance if they meet the very low income limits. • Otherwise, lawfully present immigrants who are not eligible for Medicaid because of their immigration status, as well as undocumented immigrants, may qualify for Medicaid only if they have an emergency medical condition.

28. Who Is Left Out? • Adults who are: • Between the ages of 19 and 64; • AND not disabled/GA-related; • AND not pregnant; • AND not parents or related caregivers with very low incomes.

29. What Is “Healthy Pennsylvania”? • Governor Corbett recently issued a plan to expand coverage for some people under 100% of the poverty level who would not otherwise qualify. • Eligible people would be able to buy subsidized private insurance through the Marketplace. • The proposal would restrict coverage in key ways: • Work requirements. • Premiums for people over 50% of the poverty level. • Limits on benefits.

30. Insurance through the Marketplace

31. Insurance through the Marketplace • Income tax credits and subsidies are available for people over 100% of the poverty level who buy insurance through the Marketplace and do not qualify for Medicaid and CHIP. • Advanced premium tax credits are available for peoplewith incomes up to 400% of the poverty level. • Cost sharing subsidies are available for people with incomes to up to 250% of poverty.

32. Insurance through the Marketplace • To qualify for tax credits and subsidies, people must file annual tax returns beginning with the 2014 tax year (due April 15, 2015). • Beware of scams: Tax credits and subsidies are only available through the Marketplace, not through private plans sold elsewhere.

33. Insurance through the Marketplace • Advance premium tax credits: • Refundable tax credit. • Payable in advance as credit toward monthly premium payments. • Similar to Earned Income Tax Credit (EITC). • Cost sharing subsidies: • Help from the federal government to pay for copayments and deductibles. • Supposed to be seamless for patients at sites of medical treatment.

34. Insurance through the Marketplace • Tax credits and subsidies are based on expected income and reconciled at tax time: • Individuals will have to file taxes in 2015 for the 2014 enrollment year. • They may owe money to the IRS if the subsidy was overpaid.

35. Immigrant Eligibility for Insurance through the Marketplace • All lawfully present immigrants under 400% of the poverty guidelines who are not eligible for Medicaid or CHIP may qualify for tax credits and subsidies: • Unlike in Medicaid, there is no five-year bar. • Lawfully present immigrants under 100%of the poverty guidelines may qualify for tax credits and subsidies if they do not qualify for Medicaid or CHIP. • DACA-eligible individuals (childhood arrivals permitted to work under President Obama’s Executive Order) and undocumented individuals are not eligible for tax credits and subsidies, and they may not buy full-cost insurance through the Marketplace.

36. Insurance through the Marketplace • Premium tax credits and subsidies are calculated based on MAGI methodology: • Households = tax filing units. • All members of a tax filing unit have the same household size – person-by-person analysis is not necessary. • Simpler than Medicaid! • Benefits are renewed once per year.

37. Income Guidelines for Insurance through the Marketplace

38. Insurance through the Marketplace • Bronze, Silver, Gold, and Platinum plans are available with differing levels of coverage: • Bronze: lowest monthly premium/highest out of pocket costs. • Platinum: highest monthly premium/lowest out of pocket costs.

39. Insurance through the Marketplace: The Silver Plan • Premium tax credits are based on the Silver plan, but they can be used to purchase any level plan. • Cost sharing subsidies are only available in a Silver plan.

40. Essential Benefits Package • The ACA requires insurance sold through the Marketplace to provide coverage in ten categories: • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Mental health and substance use disorder services, including behavioral health treatment • Prescription drugs • Rehabilitative and habilitative services and devices • Laboratory services • Preventive and wellness services • Chronic disease management • Pediatric services, including oral and vision care

41. Applying for Health Insurance • If people apply on the Marketplace and are eligible for Medicaid because they have disabilities, their applications will be sent to the Pennsylvania Department of Public Welfare (DPW) and treated just like new applications for Medicaid. • If people apply on the Marketplace and are MAGI Medicaid or CHIP eligible: • If they apply between October 1, 2013 and December 31, 2013, their eligibility information will be sent to DPW or the Pennsylvania Insurance Department (PID), and they will be enrolled automatically (if DPW fixes a systems issue). • If they apply on or after January 1, 2014, their applications will be sent to DPW or PID for final determinations of eligibility. • If people apply at DPW or PID but they are not eligible for Medicaid or CHIP, their applications will be forwarded to the Marketplace.

42. Applying for Health Insurance • To apply via the Marketplace: • Online applications are available via: • www.healthcare.gov • 1-800-318-2596 • Separate paper applications are available for: • Individuals who want financial help • Individuals who do not want financial help • Households (regardless of whether they want financial help) • In person assistance (Navigators and Certified Application Counselors) is available.

43. Applying for Health Insurance • To apply via DPW or PID: • There is a new paper application (PA 600 HC) – separate from applications for SNAP and other benefits. • COMPASS will not reflect the new rules until December 8, 2013.

48. Applying for Health Insurance • Under the ACA, electronic records are a primary source of information: • The Marketplace, DPW, and PID must search federal and state databases for certain kinds of proof of eligibility, like income and citizenship information. • Other kinds of proof, like state residency, can be proved by self attestation. • DPW and PID will not have access to some income information until at least June 2014, so many people will still have to provide paper documentation of income.

49. Eligibility Determinations • Written notice of eligibility decisions will be sent. • Applicants who disagree with eligibility determinations may appeal and request fair hearings: • Appeal deadlines vary, but generally will be: • 30 days for traditional Medicaid. • 90 days for premium tax credits and cost sharing subsidies. • 30 or 90 days for MAGI Medicaid and CHIP (rules are forthcoming). • Because of these variations, it is very important to read notices and pay attention to deadlines!

50. Renewing Health Insurance • For insurance through the Marketplace, MAGI Medicaid, and CHIP, coverage is renewed once per year: • Coverage will be automatically renewed unless there are changes that affect eligibility. • DPW and PID will send pre-populated renewal forms: • If the information is correct, the forms do not have to be sent back. • If the information is not correct, peoplemust report changes. • Medicaid and CHIP recipients still must report substantial changes in circumstances (e.g., changes in income, household composition, or residence) throughout the year. • Seniors and individuals with disabilities still will be subject to six-month Semi-Annual Reports under state law.