Portions of the Affordable Care Act (ACA) have already been implemented in Virginia and throughout much of the country. These include the requirement that there should be no discrimination in insurance coverage based on pre-existing conditions and that parents can retain their children on their health insurance coverage until they reach the age of twenty-six. Both of these reforms are substantial and will likely assist in the provision of better healthcare options for all Americans. But more change is coming. Some citizens will find these confusing and it will require some effort to ensure that those benefits can be fully realized.
Recently, most of the press coverage has focused on Medicaid expansion. As most of you know, I have supported Medicaid expansion for the following reasons:
- Medicaid expansion in Virginia will expand health insurance to as many as 400,000 low income Virginians who are not presently covered.
- Expansion will bring about $2 billion each year in federal funding to Virginia as the federal commitment is to provide for 100 percent of the reimbursement for coverage to these new enrollees from 2014-2016, and reducing to no less than 90 percent in later years (under the present Medicaid cost-sharing arrangement, the state pays 50 percent of the cost and the federal government pays the other 50 percent).
- Expansion will remove part of the coverage gap in Virginia’s healthcare system. Beginning January 1, 2014, adults between ages of 19 and 64 with incomes between 100 percent and 400 percent of the federal poverty line will qualify for subsidized private insurance through healthcare exchanges (Market Place), but poorer adults will qualify for nothing without Medicaid expansion.
- According to the Virginia Hospital and Healthcare Association, expansion will create over 30,000 new jobs to the Commonwealth.
- Expansion will likely mean that fewer indigent patients will utilize emergency rooms for routine services at higher cost because they can obtain the same service at lesser cost at a physician’s office. This will lower costs for hospitals like UVA and Martha Jefferson.
- If we do not expand Medicaid, we will be sending our tax dollars to other states who embrace it. Few Virginia taxpayers support sending their tax dollars to states like New York, California, Connecticut or others which embrace expansion.
While a number of Republican governors have embraced the concept of expanding Medicaid for their citizens, most notably Gov. Kasich of Ohio and Gov. Scott of Florida, our Governor has opposed expansion, as has Attorney General and gubernatorial candidate Ken Cuccinelli.
Opponents of Medicaid expansion claim that it is a broken system where costs are out of control. While it is true that Medicaid costs for the states have risen substantially over the last decade, its costs have risen at a rate lower than private medical insurance.
The administrative costs of Medicaid are less than 7 percent, or half the rate that is typically seen in the private sector. Between 2000 and 2009, the growth in per person costs was much lower in Medicaid (4.6 percent) than in the private insurance market (7.2 percent). The Senate Finance Committee created a great presentation on how Medicaid works or the costs associated with it. The Commonwealth Institute also has compiled the numbers detailing how Medicaid expansion pays for itself through cost savings.
In our last budget, the General Assembly created a Commission drawn from members of the Senate and the House to consider whether and under what conditions we should expand Medicaid. Significantly, the legislature passed language that permits Virginia to remove itself from Medicaid expansion in the event that the federal government does not deliver on its promise to provide the monies at the stated reimbursement rate. Most observers believe that the decision on expansion will depend on who is elected Governor. Terry McAuliffe supports it; Ken Cuccinelli does not.
The adopted budget also provides that any savings realized in the first several years of any expansion because of greater federal subsidies will be reserved to pay future costs that might accrue in later years.
The Commonwealth has about 872,000 uninsured residents so even if we expanded Medicaid, many would still be without health insurance. That is why the ACA created the “health care exchanges” (the “Marketplace”). The Marketplace is a vehicle by which individuals will be able to compare and contrast health insurance plans, and buy them in the new Health Insurance Marketplace from private companies. Under the law, Virginians who earn between 100 percent and 400 percent of the poverty level (between roughly $11,500.00 and $46,000.00 for an individual, and between $23,550.00 and $94,200.00 for a family of four) are eligible to receive a tax credit to defray the costs of buying policies on the Marketplace.
There has been considerable confusion about this portion of the Affordable Care Act, and it is likely that it will be take some time for people to adjust to the options. I supported the idea of having Virginia create its own Marketplace so we could have control over the process, but Republicans in the General Assembly, who were reluctant to embrace any portion of the federal health care act, rejected this idea. Consequently, the Virginian Marketplace is operated by the federal government. Different companies will compete in different parts of the state. In our area, the companies likely to be involved are Coventry Health Care (a division of Aetna), Healthkeepers (Blue Cross), and Optima Health Plan. It is projected that offering these various plans in the Marketplace will allow consumers to compare and contrast both the coverage and the costs, which will hopefully result in coverage at lower costs. You can purchase four different levels of coverage for different amounts. For example, the option with the most extensive benefit will be called the “Platinum option”; and will cost more than the other three options. The “Bronze option” is the least expensive and offers less coverage. The costs for these and other options in Virginia’s Marketplace will be available on October 1 , the first day citizens can enroll for coverage that begins January 1, 2014.
More information on the exchanges can be found at HealthCare.gov, the Virginia Association of Health Plans, or www.timeforaffordability.org. You can also call 1-800-318-2596 for assistance. There will also be “navigators” that will assist people in negotiating the Marketplace. In this area, Navigators are provided through the Legal Aid Justice Center in Charlottesville, which won a competitive grant from the federal government to assist consumers on negotiating the Marketplace. The Virginia Poverty Law Center will have about twenty Navigators working statewide to help identify and help uninsured Virginians. There will be a toll-free number to help connect consumers with navigators in their areas.
We have seen some indication that the Marketplace is increasing competition and giving consumers a better deal. States like California, Maryland, and Vermont recently announced rates for some plans offered through the Marketplace that will be 20 percent less expensive than previously estimated. New York recently announced that the premiums for individuals enrolling in that state’s Marketplace could be 50 percent less costly than they are today.
In addition, the U.S. Department of Health and Human Services is launching a call center specifically designed to help small businesses. You can access it at HealthCare.gov and look for the “SHOP Marketplace”. This Marketplace will help businesses with fewer than 50 employees with questions they have about purchasing health care in the Marketplace. Employers who employ fewer than 50 persons are not required to provide coverage or pay a penalty.
There are other websites besides HealthCare.gov that have very good information about the health insurance marketplace. Virginia Poverty Law Center has a YouTube video that walks through the basics on the health insurance marketplace for Virginians, WebMD has a wonderful FAQ page on its website, as does the Kaiser Foundation, and Virginia Consumer Voices for Healthcare also has compiled some great information to help individuals prepare for and stay informed about the health insurance marketplace. To enroll, you may do so online through HealthCare.gov, or you may call the federal hotline, 1-800-318-2596. There is also help available to small business employers available through Kaiser Foundation, or the IRS, or simply calling the Small Business Health Insurance Options (SHOP) call center at 1-800-706-7893.
P.S. DON’T FORGET TO VOTE ON NOVEMBER 5!
Remember, just 40 days until the election. This year we elect our top elected officials in Virginia – Governor, Lieutenant Governor and Attorney General. In addition, all 100 House of Delegates seats are up for election, and there are many local elections on the ballots. The State Board of Elections of Virginia website has some useful tools for Virginia voters. You can register online (deadline to register to vote in this year’s election is October 15), verify your registration status, or change your registration information by using their online voter registration tool. You can use their interactive tool, Where Do I Vote, to locate your polling location. Finally, their Virginia Easy Voter Guide provides an overview of voter registration, what to expect and bring to the polls when you vote, specific instructions for military, overseas and college voters, and important contact information to find answers to your questions.