Key provisions of the
Patient Protection and Affordable Care Act (PPACA)
enacted March 2010 by President Obama
were designed to eliminate "the worst practices of the insurance
companies", preserve private insurance and health care providers and
provide more subsidies to enable the poor to buy insurance. In the first
year: Insurance companies were barred
from dropping people’s coverage when they got sick, ending the practice of rescission; lifetime coverage limits
and restricted annual limits were eliminated; young adults can stay on their
parents' health plans until age 26 (many were previously dropped when they
turned 19 or finished college); uninsured adults with pre-existing conditions are
now allowed to obtain health coverage through a new program for high risk pools
(expires in 2014 when new insurance exchanges begin operating); Insurance
companies can’t deny group or new individual coverage to children
under age 19 due to a pre-existing condition; a temporary reinsurance program
to help companies maintain health coverage for early retirees between the ages
of 55 and 64 (expires in 2014) was created; it provides a $250 rebate to
Medicare drug plan beneficiaries
who fell into the Medicare Part D
coverage gap (old law required the person to pay 100% of their annual medicine
costs when $2,700 was spent and didn’t start again until after $6,154 was
spent); the coverage gap eventually closes completely; provided a tax credit
for some small businesses providing coverage for workers and a 10% tax on
indoor tanning services that use ultraviolet lamps. During 2011 Medicare
provided a 10% bonus payment to primary care physicians and general surgeons;
covered the full cost of annual
wellness visits and personalized
prevention plan services for beneficiaries. New health plans were required to
cover preventive services with little or no direct cost to patients. A new Medicaid
program for the poor went into effect in October that allows states to offer
home and community based care for the disabled that might otherwise require
institutional care. Payments to insurers offering Medicare Advantage services are frozen at 2010 levels and
are to be gradually reduced to bring them more in line with traditional
Medicare. Employers were required to disclose the value of health benefits on
employees' W-2 tax forms. An annual fee was imposed on pharmaceutical companies
according to market share; the fee did not apply to companies with sales of
$5 million or less. Effective 2012 physician payment reforms are
implemented in Medicare to enhance primary care services and encourage doctors
to form "accountable care organizations" to improve quality and
efficiency of care. A Medicare incentive program is established for acute care
hospitals to improve quality outcomes. The Centers for Medicare and Medicaid
Services, which oversees the government programs, begins tracking hospital
readmission rates and puts in place financial incentives to reduce preventable
readmissions. (Amendments made by Section 9006 of the Act in April 2011
repealed a new tax reporting change to prevent tax evasion by corporations and
individuals because the provision was burdensome to small businesses; it was
expected to raise $17 billion over 10 years.)
Effective 2013
a
national pilot program is established for Medicare on payment bundling to
encourage doctors, hospitals and other care providers to better coordinate
patient care. The threshold for claiming medical expenses on itemized tax
returns is raised to 10% from 7.5% of income; the elderly wait until 2017 for
the change. The Federal Insurance
Contributions Act tax (FICA) is raised to 2.35% from 1.45% for individuals
earning more than $200,000 and married couples with incomes over $250,000 and
is imposed on some investment income. A 2.9% excise tax is imposed on the sale
of medical devices; generally doesn’t include purchases at the retail level.
Effective 2014 State health
insurance exchanges for small businesses and individuals open up. Individuals
with income from 133% of the federal
poverty level (FPL) to 400% of the FDL
will be able to purchase insurance on the exchange with a premium cap
for maximum "out-of-pocket", qualify
for Medicaid, get tax credits (Section
1401 of PPACA explains the subsidy will be provided
as an advance-able, refundable
tax credit that provides a government benefit to people even with no tax
liability, example: Child Tax Credit). The Congressional Budget Office shows the
maximum share of income that enrollees would pay for the "silver" healthcare plan would vary depending on their income
relative to the FPL (a Subsidy
Calculator gives a specific amount). People will either be on a government or
private plan or pay a tax if they don't have health insurance; health plans will
no longer be able to exclude people from coverage due to pre-existing
conditions and employers with 50 or more workers who do not offer coverage face
a fine of $2,000 for each employee if any worker receives subsidized insurance
on the exchange (30 employees aren't counted for the fine). Health insurance
companies begin paying a fee based on their market share.
Effective 2015
Medicare
creates a physician payment program aimed at rewarding quality of care rather
than volume of services. Effective 2018 an excise tax on high cost
employer-provided plans is imposed (first $27,500 of a family plan and $10,200
for an individual coverage is exempt); higher levels are set for plans covering
retirees and people in high risk professions. (Unlike today, age and FPL enable those required to buy insurance to
get a reduced rate.) Tomorrow I’ll talk about the Supreme Court’s June 28,
2012 decision and the talk that followed. By the way, 2 cable stations
erroneously reported that the Court struck down the law.
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