The patients who frequent Volunteers in Medicine, a donation-based clinic in Bend, often have no way to pay for the services they receive. For many, there’s no way they’ll be able to afford health insurance, either.

For those people — the homeless, the very poor, the bankrupt — the Affordable Care Act includes more than 20 exemptions to the insurance mandate. Many Americans who don’t have insurance by the end of March will have to pay a fine next year of $95 per person or 1 percent of their income.

That is, unless they qualify for an exemption.

But VIM’s leaders have found that getting approved under those exemptions is not easy. Executive Director Katherine Mastrangelo and her team are struggling to get a handle on how to apply for them. Oregon, like most states, is letting the U.S. Department of Health and Human Services handle the process of approving or denying exemption applications in the program’s first year.

The clinic’s calls to federal officials were routed back to Cover Oregon, the state’s health insurance exchange. Officials at Cover Oregon didn’t have much insight, either. In some cases, the state exchange workers weren’t even aware of which exemption forms were available, said Beth Larsen, VIM’s director of grants.

“If you call (the federal officials), they shake their head and say, ‘Your state should know about this,’” she said, “but we kind of don’t.”

Exemptions will be granted to members of federally recognized tribes, members of a religious sect that objects to insurance, the incarcerated and those who find that the cheapest insurance plan available would cost more than 8 percent of their household income, among others.

A list of 14 exemptions under a hardship category include things like being homeless, having been evicted, having been the victim of domestic violence, the death of a close family member and unpaid medical bills.

That’s going to cover a whole lot of people. In fact, the Congressional Budget Office estimates that about 80 percent of those who will remain uninsured in 2016 will not be subject to a penalty because they will qualify for one or more exemptions. Another 6 million uninsured who won’t qualify for exemptions will pay $7 billion in penalties in 2016.

Apply now or wait ‘til later

VIM’s patients run the gamut, but the clinic’s leaders guess that the biggest proportion will qualify for an exemption because they can’t afford insurance.

To be a VIM patient, your income must be less than 200 percent of the federal poverty level, or $22,980 per year for a single adult in 2013, and you must be uninsured (that includes public plans like Medicaid and Medicare).

Oregon’s Medicaid expansion opened the program to everyone up to 138 percent of the federal poverty level, so while many VIM patients now qualify for coverage, not all do. Some patients are bankrupt, homeless, have been evicted or have received shut-off notices from their utility companies, all exemptions under the law.

“I could see our patients being able to check six or seven of these boxes,” Mastrangelo said. “They’re not mutually exclusive, for sure.”

VIM’s providers aren’t accustomed to asking patients about whether they’ve been evicted or whether a close family member died recently, but those questions will now need to be a part of the conversation, Larsen said.

Nationally, most people will fall under the affordability exemption because they couldn’t find health insurance policy that cost less than 8 percent of their household income, said Karen Pollitz, a senior fellow with the Kaiser Family Foundation, a nonpartisan organization that researches health policy.

The tax subsidies to reduce people’s health insurance premiums on policies purchased on the exchanges stop at four times the federal poverty level, or an annual income of $45,960 for a single adult in 2013. Even before that point, though, at 2.5 times poverty level, the subsidies are set so that people would need to pay more than 8 percent of their income for a benchmark plan, Pollitz said.

“They’re just not as big, I think, as some folks might have wanted them to be,” she said of the subsidies.

To apply for exemptions, people can either mail an application to the Kentucky company the federal government has contracted to process them or claim the exemption on their 2014 federal tax returns, which are filed in April 2015. Not all of the exemptions can be claimed on the tax returns, however. In those cases, people must mail the application forms. Each exemption has its own specific form, and each form can be found at www.healthcare.gov/exemptions.

If someone has the slightest doubt that they may not qualify for an exemption, they should send in their application as soon as possible. This way, if they are deemed ineligible, they still have time to buy insurance before the March 31 enrollment deadline, said Stephanie Magill, a spokesperson for the Centers for Medicare & Medicaid Services, which is overseeing the exemptions process.

“We want to make sure they have enough time to kind of absorb all that information and figure out what they want to do if they don’t get the exemption,” she said.

Whether a person applies before March 31 or waits until they file their 2014 tax returns depends on how confident they are in their eligibility for an exemption, Magill said. If they are waiting, they should be very sure they will get the exemption, she said.

“At some point, they’re going to have to file some kind of exemption, so if it gives them peace of mind to file it now so they get the notice or notification of where they stand, and then they can be confident that when they fill out their taxes they’ve got the exemption,” she said.

For some, no docs required

Most of the exemptions require some form of paperwork as proof, such as a copy of the eviction notice, shut-off notice, death certificate or notice from the newspaper.

Homelessness and having been the recent victim of domestic violence do not require proof.

Keri Moran-Kuhn, director of programs for the Oregon Coalition Against Domestic & Sexual Violence, said it makes sense for the domestic violence exemption to not require documentation, as there are a number of reasons why a domestic abuse victim would not go to law enforcement, especially if they are still with their abusive partner.

Domestic violence can be an all-encompassing situation. When victims try to leave abusive relationships, they’re struggling to stay safe and keep their children safe, Moran-Kuhn said. Often, abusers won’t let their victims work or, if they do, they stalk them at their jobs, she said. With that in mind, it’s understandable if victims aren’t focused on signing up for health insurance, she said.

While the Affordable Care Act will result in many more people getting insurance, the law was never expected to cover all Americans, Pollitz said. To do so would have required far more generous tax subsidies. Congress approved a price tag on the law of about $1 trillion over the course of a decade, the same cost as the Clinton-era health reform proposal back in 1993, she said.

Considering the large number of state governors who decided not to expand Medicaid, the exclusion of illegal immigrants from the law and the religious exemption, many people will be left uninsured even after the law is fully implemented, Pollitz said.

“The law was only ever rigged to cover half of the uninsured,” she said. “This has actually never been a law that will get us to universal coverage, not the way it’s written.”

— Reporter: 541-383-0304, tbannow@bendbulletin.com