Health care reform

Health care reform and people with HIV/AIDS

April 5, 2010

President Obama has signed the Patient Protection and Affordable Care Act (PPACA) and the Health Care Education and Reconciliation Act of 2010 into law. Together they enact an historic health care reform plan, the first major overhaul of the health care system since 1965, when Medicaid and Medicare were put in place. Americans have been debating broad health care reform, of both the public and private sectors, since 1914. The passage of the PPACA is a hard-won victory for the millions of Americans who are uninsured or underinsured, including many living with HIV.

The PPACA is far from perfect and doesn’t include all the provisions we fought for to best serve people living with HIV. However, there are some significant victories contained in this law. It also represents a major step forward in broadly expanding affordable and comprehensive health care. Finally this reform begins to create a more coherent system of health care for Americans that we can continue to build upon and further improve through ongoing advocacy efforts.

Following is an initial outline of some of the important provisions of health care reform for people with HIV and other chronic conditions:

Public Insurance (Medicaid and Medicare) Improvements:

• In 2011, states will have the option to expand their Medicaid programs to all people under a certain income (133% Federal Poverty Level (FPL) – FPL increases every year, in 2010 it is $14,403 for one person and $29,324 for a family of four). In 2014, Medicaid will be expanded by federal mandate and will cover everyone under 133% FPL, ending the requirement that people with HIV must get sick before they can qualify for Medicaid.
• In 2010, people who depend on Medicare Part D for their prescription drugs will receive a $250.00 rebate when they reach the coverage gap (the coverage gap is the time during which people essentially lose coverage and must pay the full cost of their drugs until they have paid several thousand dollars out of their own pocket - most people with HIV reach the gap in the second or third month of the plan year). In 2011, the pharmaceutical industry has to provide a 50% discount on brand name drugs while people are in the coverage gap. By 2020, the coverage gap for Medicare Part D is eliminated.
• In 2011, AIDS Drug Assistance Program (ADAP) payments that are made to Medicare Part D on behalf of HIV positive people who are in the coverage gap will count toward the amount of out-of-pocket spending they must reach to get meaningful prescription coverage under Medicare Part D. This will save money for ADAPs and allow Medicare beneficiaries to gain access to a much more comprehensive formulary of necessary drugs.

Reforms to private health care:

• Within six months, children cannot be denied insurance due to pre-existing conditions. By 2014, adults will no longer be able to be denied for pre-existing conditions. Within six months, adults with pre-existing conditions will be allowed to buy into a temporary national “high-risk” plan that will stay in effect until 2014. Out of pocket costs will be capped under the temporary plan.

• Within six months, young adults can stay on their family plans until age 26.
• In 2010, lifetime caps on benefits will be prohibited.
• In 2010, insurance companies will no longer be able to take away coverage when someone gets sick.
• In 2010, some health plans will be required to cover some preventive services free of cost to their participants.

Improvements to private insurance:

• In 2014, state “exchanges” will be established, allowing individuals and small businesses to purchase coverage; this will effectively end “job-lock”, when people can’t leave their current job to start a business or new venture because they or a family member won’t be able to get insurance.
• In 2014, plans operating in the exchanges will be required to offer several levels of defined benefit packages.

Affordability for individuals and small businesses in the exchanges:

• Individuals who can’t afford insurance will get financial help through government subsidies up to 400% of FPL (currently $43,320 for a single person and $88,200 for a family of four).
• Expenditures on insurance premiums and out-of-pocket expenses will be capped.
• Small businesses will be helped to purchase and offer insurance through tax credits.
• There are exemptions for individuals and small businesses who still can’t afford insurance or who may not qualify.