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HEALTH IN
SURANCE
PREMIUM AND COST-
SHARING ASSISTANCE
PROGRAM
Akash DesaiUrban Health Policy FellowAIDS Activities Coordinating Office
PURPOSE• Define health insurance terms• What is premium and cost-sharing
assistance?• Analysis of cost
DISCLAIMER• This report is based on the current plans and
cost-reducing features offered through the Affordable Care Act Marketplace.
• The future state of the ACA is uncertain and subject to substantial changes by the new administration and Congress.
DEFINITIO
NS
WHAT YOU PAY ENTIRELY ON YOUR OWN
P R E M I U M
“The amount you pay for your health insurance every month.” • Fixed fee that you pay to
maintain your insurance every month
• Like paying a fixed monthly bill to keep Internet service
“The amount you pay for covered health care services before your insurance plan starts to pay.”• Fixed limit for the year • Let’s say it’s $2500. Once
you’ve spent $2500 of your own money on doctor visits, medications, and/or procedures, you’ve met the deductible for the year.
• Does not include premiums
S O U R C E : H E A LT H C A R E . G OV G LO SS A RY
D E D U C T I B L E
WHAT YOUR INSURANCE WILL HELP PAY
C O P A Y M E N T “A fixed amount…you pay for a covered health care service after you’ve paid your deductible.” • Each type of service that
has a copay has a fixed dollar cost. For example, the copay for a PCP visit for any reason could be $30, for any generic drug $10, etc.
• Called a copayment since you’re paying part of the service and insurer is paying part
C O I N S U R A N C E “The percentage of costs of a covered health care service you pay…after you’ve paid your deductible.”• Let’s say you’ve spent up to
that $2500 deductible. • You’ve paid full price on certain
medical services so far. From now on, you will only pay a percentage, like 20%, for those medical services, while the insurer pays the rest.
S O U R C E : H E A LT H C A R E . G OV G LO SS A RY
THE MOST YOU’LL PAY PER YEAR O U T - O F - P O C K E T M A X I M U M / L I M I T “The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance, your health plan pays 100% of the costs of covered benefits.”• Fixed limit for the year• Does not include premiums• Will be greater than or equal to
deductible
S O U R C E : H E A LT H C A R E . G OV G LO SS A RY
WHAT IS THE AFFORDABLE CARE ACT?• The Patient Protection and Affordable Care Act (PPACA), commonly called the
Affordable Care Act (ACA) or Obamacare, is a United States federal statute enacted by President Barack Obama on March 23, 2010. Together with the Health Care and Education Reconciliation Act amendment, it represents the most significant regulatory overhaul of the U.S. healthcare system since the passage of Medicare and Medicaid in 1965.
• The Affordable Care Act was intended to increase health insurance quality and affordability, lower the uninsured rate by expanding insurance coverage and reduce the costs of healthcare. It introduced mechanisms including mandates, subsidies and insurance exchanges
• Some key provisions:• Coverage of several preventive services without charging patient extra• Insurers can’t deny applicants based on pre-existing conditions• Small businesses and individuals can purchase coverage through Marketplace• Penalty for not enrolling in a health plan if it is available and affordable• Premium tax credit and cost-sharing reduction available
S O U R C E : U . S . D E PA RT M E N T O F H E A LT H A N D H U M A N S E R V I C E S , 2 0 1 5
WHAT ARE THE FEDERAL SUBSIDIES?P R E M I U M T A X C R E D I T
• Lowers cost of monthly premium• Eligibility:• 100% to 400% of Federal Poverty
Level• Cannot have catastrophic health
plan• Three options:• Take it in advance (APTC), so that
you pay less on the premium each month
• Pay the whole premium cost every month and get the tax credit at once when filing taxes
• Combination of the above• Amount can vary based on income
C O S T - S H A R I N G R E D U C T I O N
• Lowers out-of-pocket maximum• Eligibility: • 100% to 250% of FPL• Must have Silver plan
• Subsidy will be “automatically applied” to Silver plans when enrolling
• Amount can vary based on income
S O U R C E : K A I S E R FA M I LY F O U N D AT I O N , 2 0 1 6
WHAT IS PR
EMIUM AND
COST-SHARING
ASSISTANCE?
HRSA HAB PCN #16-02“Health Insurance Premium and Cost-Sharing Assistance provides financial assistance for eligible clients living with HIV to maintain continuity of health insurance or to receive medical and pharmacy benefits under a health care coverage program.”Requirements:• Coverage has to have “at least one drug in each class of core
antiretroviral therapeutics…”• Paying insurance has to be more cost-effective than paying full price
on drugs and HIV medical servicesService Provisions:• Can pay health insurance premiums, and/or cost-sharing, and/or
“standalone dental premiums” for the clientS O U R C E : H E A LT H R E S O U R C E S A N D S E R V I C E S
A D M I N I S T R AT I O N , 2 0 1 6
HRSA HAB PCN #13-05• “RWHAP funds may be used to cover the cost
of private health insurance premiums, deductibles, and co-payments…”
• “In states with a Federally-Facilitated Marketplace, grantees and subgrantees will need to work directly with health insurance issuers to facilitate premium payments by the RWHAP for individual clients.”
S O U R C E : H E A LT H R E S O U R C E S A N D S E R V I C E S A D M I N I S T R AT I O N , 2 0 1 4
HRSA HAB PCN #14-01• If you’re getting a premium tax credit, you need to file taxes.• The amount of the APTC is determined during enrollment. If the client’s
income changes between then and tax filing time, it’s possible the APTC will be more or less than the actual premium tax credit a client should receive for that year.
• If APTC ends up being too little: • They could receive the additional money through a “refund from the IRS”
or a “reduction in overall tax liability.”• The grantee has to “vigorously pursue” that excess credit and has to put it
back into this service category.• If APTC ends up being too much:• Grantees “may use RWHAP funds to pay the IRS any additional tax liability
a client may owe to the IRS solely based on reconciliation of the premium tax credit.”
S O U R C E : H E A LT H R E S O U R C E S A N D S E R V I C E S A D M I N I S T R AT I O N , 2 0 1 5
RYAN WHITE CAP ON CHARGES• According to RWHAP legislation, there is a cap on what clients can
be charged for HIV services yearly. Included in these services are health insurance costs, such as out-of-pocket expenses and premiums.
• The cap is a certain percentage of the client’s annual gross income.• The table below shows the maximum amount clients can be
charged for HIV services by income range.% FPL Maximum Cumulative Charges as % of Income
≤ 100% FPL 0%101 to 200% FPL 5%201 to 300% FPL 7%
> 300% FPL 10%S O U R C E : H E A LT H R E S O U R C E S A N D S E R V I C E S
A D M I N I S T R AT I O N , 2 0 1 3
CLIENT SCENARIO• Client has individual income of $29,000, which is 244% FPL• Based on RWHAP cap, cumulative charges cannot exceed 7% of yearly
income, or $2030• Therefore, the most this program would pay for client is $2030• Client should qualify for premium tax credit and cost-sharing reduction• Chooses Keystone HMO Silver Proactive plan• Estimated monthly premium: $158.74• Primary physician visit: $30• 12 months of premiums adds up to $1904.88, so already close to reaching
$2030 cap• This assumes that premiums count toward the cap
• Leaves $125.12 to spend on doctor visits, medications, etc.
S O U R C E : H E A LT H C A R E . G OV P L A N S & P R I C E S
ANALYSIS OF C
OST
HOW MANY CLIENTS ARE ELIGIBLE?• Criteria:
• Between 138 and 500% FPL• Individual, private coverage • Uninsured
• Based on CY 2015 RWHAP data for HIV+ clients in Philadelphia EMA: • 209 clients with incomes between 138 and 500% FPL on individual,
private insurance • 421 clients with incomes between 138 and 500% FPL with no
insurance • A total of 630 eligible clients• This assumes these are incomes for a single-person household. Since
family size is not recorded in CAREWare, it is possible incomes used above are for multiple-person households.
S O U R C E : C Y 2 0 1 5 R W H A P D ATA F O R P H I L A D E L P H I A E M A
WHAT IS MAX. COST FOR THIS PROGRAM?• Multiplied each of the 630 incomes by 0.05, 0.07, or 0.10,
depending on which income range it fell in, to get each RWHAP cap. • The cap is the most that client can be charged for RWHAP services,
including health insurance costs, for the year.• Added these capped amounts together to get the most this program
would need to pay for premiums plus out-of-pocket expenses• Maximum cost for 630 clients is $1,227,847.
• Does not include administration costs• This assumes that the only RWHAP service a client is charged for is
health insurance. It also assumes premiums count toward the cap.
# OF CLIENTS IF AWARDED LEVEL FUNDING• $160,000 is allocated for this service category at level funding• If paying up to cap for the lowest-income clients, program can cover
173 clients• If paying up to cap for the highest-income clients, program can
cover 30 clients• This assumes none of the $160,000 is used for administrative costs.
NEW JERSEY HIPP• NJ Dept. of Health runs Health Insurance Premium Program
(HIPP)• Funded through prescription drug rebates• Took 2 years for full implementation• Anticipated $11 million to be allocated for program• Currently $3 million allocated• Have 450 clients with average cost of $350 per client per
month ($1,890,000)• Program is administered by the State – 2 FTEs and 3
temporary workers
CONSIDERATIONS• All eligible clients between 138 and 250% FPL should be enrolled in a
Silver plan to utilize the premium tax credit and cost-sharing reduction• Clients between 138 and 400% who are eligible for a premium tax
credit should choose to take it in advance. This reduces the likelihood that clients would need to return money to the program.
• Should try to enroll clients in Medical Assistance for Workers with Disabilities, if eligible• PA program• HIV diagnosis• Countable income less than 250% FPL• ≤ $10,000 in countable resources• Doing paid work of some kind
CONSIDERATIONS cont’d• If paying out-of-pocket expenses:• Need mechanism to track charges client incurs from providers
and insurer • Need to make sure client doesn’t get charged more than their
RWHAP cap• If paying premiums:• Too little APTC? Need procedure to get $ money back from client• Too much APTC? Need procedure to pay $ back to IRS
REFERENCES"2017 Health Insurance Plans & Prices." HealthCare.gov. U.S. Centers for Medicare & Medicaid Services. Web.
<https://www.healthcare.gov/see-plans/#/plan/results>."Explaining Health Care Reform: Questions About Health Insurance Subsidies." Kaiser Family Foundation. Kaiser Family
Foundation, 01 Nov. 2016. Web. <http://kff.org/health-reform/issue-brief/explaining-health-care-reform-questions-about-health/>.
"Glossary." HealthCare.gov. U.S. Centers for Medicare & Medicaid Services. Web. <https://www.healthcare.gov/glossary/>.Health Resources and Services Administration. HIV/AIDS Bureau. Clarifications Regarding the Ryan White HIV/AIDS
Program and Reconciliation of Premium Tax Credits under the Affordable Care Act. 3 April 2015. Web. <http://hab.hrsa.gov/sites/default/files/hab/Global/1401policyclarification.pdf>.
Health Resources and Services Administration. HIV/AIDS Bureau. Clarifications Regarding Use of Ryan White HIV/AIDS Program Funds for Premium and Cost-Sharing Assistance for Private Health Insurance. 6 June 2014. Web. <http://hab.hrsa.gov/sites/default/files/hab/Global/pcn1305premiumcostsharing.pdf>.
Health Resources and Services Administration. HIV/AIDS Bureau. Ryan White HIV/AIDS Program Services: Eligible Individuals & Allowable Uses of Funds. U.S. Department of Health and Human Services, 2016. Web. <http://hab.hrsa.gov/sites/default/files/hab/program-grants-management/ServiceCategoryPCN_16-02Final.pdf>.
Health Resources and Services Administration. HIV/AIDS Bureau. Ryan White HIV/AIDS Program Part A Manual. U.S. Department of Health and Human Services, 2013. Web. <http://hab.hrsa.gov/sites/default/files/hab/Global/happartamanual2013.pdf>.
Secretary, HHS Office of the. "Key Features of the Affordable Care Act By Year." HHS.gov. U.S. Department of Health and Human Services, 13 Aug. 2015. Web. <http://www.hhs.gov/healthcare/facts-and-features/key-features-of-aca-by-year/index.html>.
