Affordable Care Act has limited impact in Virgin Islands
Published: October 1, 2013
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ST. THOMAS - As the Affordable Care Act's first phase goes into effect today, Virgin Islanders will not be shopping around for policies using newly created insurance exchanges, as in many other parts of the country.
The territories had to choose between creating such an exchange, which pools users to create cost-effective rates outside of traditional employer-issued plans, or boosting Medicaid dollars. The Health Reform Task Force put together by Gov. John deJongh Jr. weighed the feasibility of creating an exchange in the islands and found that it could not be done.
The task force estimated it would cost the Virgin Islands $251 million during the next five years to provide necessary subsidies, while the territory is receiving only $24.9 million in one-time federal funding.
By contrast, an infusion of nearly $40 million yearly to expand Medicaid during the next seven years, with a federal-local match of 55-45 percent, will mean a greater number of pregnant women, senior citizens, single adults without children and disabled people who would not otherwise be insured will be eligible.
If local funding sources come through for the 45 percent match, a total of $419 million in federal funds will allow the V.I. Human Services Department to start enrolling Virgin Islanders whose incomes are between $6,500 and $8,500 yearly, up $1,000 from previous limits, in phases stretched over one year.
With nearly 30 percent of the population currently living at or below poverty, the total expansion by 2019 could mean as many as 30,000 people will be covered under Medicaid, according to Human Services Commissioner Christopher Finch.
Some of the significant consumer protections of the Affordable Care Act, such as those limiting insurance companies from imposing lifetime dollar limits and from dropping law-abiding subscribers, still will apply in the territory when they take effect in January. So too will provisions that prohibit carriers from imposing exorbitant and discriminatory rates or boosting rates to cover unnecessary overhead, according to a fact sheet from the U.S. Department of Health and Human Services.
However, some residents say the Virgin Islands has been left out from key features of the act, such as those providing for self-employed people and those preventing companies from rejecting people with pre-existing conditions, and that more reform needs to be done at the local level to achieve fairness and full coverage.
Without an insurance exchange, individuals who are self-employed are left without the option to buy their own policies as long as they work alone. This is because carriers have never found it cost-effective to offer such policies to such a small population, according to Steven Baker, an insurance buyer for businesses in the Virgin Islands.
"An insurance company is not your friend; it's not your buddy," Baker said. "They are here to make money. They have never found that the population, being so small, could support the writing of individual policies."
Rita De Ferrary, self-employed as a consultant, said the lack of parity between the states and the territories in the legislation defies the spirit of fairness intended by the Affordable Care Act.
Unlike many other states, the territory defines small groups as starting at two people. Artists, landscapers, consultants and other professionals who do not have employees simply have to pay out-of-pocket and hope that nothing catastrophic happens to them, she said.
"The territory was really between a rock and a hard place. We were given this ultimatum by the federal government to either expand the Medicaid or to create an exchange," De Ferrary said. "I think many of the issues of parity could be addressed at the local level by amending the Virgin Islands Code. For instance, they could simply change the definition of small groups from 2 to 50 to 1 to 50 people. Many other states have done this."
- Contact Amanda Norris at 714-9104 or email firstname.lastname@example.org.