The Patient Protection and Affordable Care Act passed on March 23, 2010
represents over 2000 pages of legislation and addresses healthcare in both the private
and public markets. Healthcare is a $2.2 trillion industry, and represents 1/6 of the U.S.
Gross Domestic Product. It is important that consumers and business owners familiarize
themselves with the key points of this historic legislation. Below is a highlight summary
of the bill.
2010 Reforms
* Insurers may not arbitrarily cancel your coverage when you get sick, except
in cases of fraud, or intentional misrepresentation.
* Insurers must cover certain preventive and immunization services with no
co-payments or deductibles as determined by the U.S. Preventive Services
Task Force.
* Children who can't get coverage from their employers may stay on their parents
plan until age 26.
* No more lifetime maximums on insurance plans effective 9/23/2010.
* New high-risk pool options (insurance plans) will be available for people
with serious pre-existing conditions and have been uninsured for at least six months.
These pools will limit out-of-pocket costs to $5,950 for individuals and $11,900 for
families.
* A temporary re-insurance program will be created to help employers offset the
cost of expensive retiree health benefit premiums for people over 55.
* Insurers can no longer deny children coverage based on pre-existing
conditions, or exclude a particular condition (effective 9/23/2010).
* Businesses with 25 of fewer full-time employees that pay for at least 50%
of premiums and pay average annual wages of below $50,000 may be
eligible for a tax credit up to 35% of the premiums the business pays.
* The bill authorizes more funding for community health centers as well as
developing programs to expand nurses, doctors, and other healthcare workers.
* People on Medicare Part D who are in the "donut hole" will receive a $250
rebate.
* A new 10% tax on tanning booth operators will take effect.
2011 Reforms
* Medicare reimbursements to doctors will increase 10%.
* There will be a 50% discount on brand name drugs for people in the Medicare
Part D doughnut hole.
* Grants for small business wellness programs will be made available.
* Medicare will introduce free annual wellness visits for its' members.
* Over payments for Medicare Advantage will start to be phased out.
* Minimum loss ratios will require insurance comanies to pay out a
minimum of 80% of all premiums collected in the form of paid claims
(individual and small group markets), and a 85% pay out requirement
in the large group market.
* There will be a fee (tax) assessed on pharmaceutical manufacturers.
* Funding will be made available to the states to evaluate alternatives to
tort litigation.
* Over the counter drugs can no longer be acquired through your FSA or
Health Reimbursement Arrangement accounts unless prescribed by a doctor.
2012 Reforms
* Penalties will be assessed to hospitals under Medicare for excessive
re-admission rates.
* New standards will be required to explain policy definitions and coverage
benefits in health plans.
* Doctors will be encouraged to join accountable care organizations.
* Rebates will be reduced in Medicare Advantage plans.
2013 Reforms
* Increase the Medicare Part A tax from 1.45% to 2.35% for individuals
making over $200,000 and families making over $250,000.
* A special 3.8% tax on unearned (investment) income on high-income
taxpayers.
* Limit FSA accounts to $2500 annually.
* Impose a 2.3% tax on all medical devices.
* Medicare will slowly phase in reimbursements based on deisred medical
outcomes ("payment bundling"), as opposed to the traditional fee for service
reimbursement model.
* Create Consumer Operated and Oriented Plans (health insurance "co-ops")
which are member run non-profit health insurance companies.
* Start phasing in Medicare Part D subsidies that eventually hit 25% in 2020.
* Increase the floor for deductible health expenses from 7.5% of AGI, to 10%.
2014 Reforms
* All insurance applicants must be accepted regardless of pre-existing conditions.
* Annual plan benefit caps must be eliminated.
* Individuals and families that don't have health coverage will pay a penalty
that is phased in starting in 2014, and tops out at 2.5% of income in 2016.
* There will be susbsidies to purchase health insurance for people that
are between 133% - 400% of the Federal Poverty Level (FPL). This
would be incomes of $14,404 (Ind.)/$29,326 (Family) on the low
end, to $43,320 (Ind.)/$88,200 (Family) on the high end.
* Small businesses with 100 or fewer employees can purchase health
insurance on purchasing exchanges ( SHOP - Small Business Health
Options Program).
* Individuals can purchase insurance on the American Health Benefit Exchanges.
* There will be a health insurance provider fee assessed on carriers based
on market share. Additionally, carriers must keep premiums structured so
that the highest premiums charged individuals are no more than a 3:1 ratio
compared to the lowest premiums (i.e. - premiums for the oldest policyholders
can't be more that three times that of premiums for the youngest policyholders).
* The U.S. Office of Personnel and Budget will oversee two different national
health plans offered by carriers who want to participate in the program.
* For businesses with more than 50 employees that have no health coverage
program, a penalty will be assessed of $2000 per employee for each employee
over 30 employees as long as there is at least one employee in the company who receives federal premium tax credits.
* For businesses with more than 50 employees that do offer health coverage,
a penalty o $3000 will be assessed for each employee who receives federal
premium tax credits, or the employer can pay a penalty of $2000 for each
full-time employee, whichever is the lesser.
* Deductibles in the small group health insurance market will be limited to
$2000 for individuals, and $4000 for families.
* There will be four different levels of health insurance plans offered through
the exchanges:
Bronze - Covers 60% of the benefit costs with an out-of-pocket limit
of $5,950 for individuals, and $11,900 for families.
Silver - Covers 70% of the benefit costs with the same out-of-pocket
caps above.
Gold - Covers 80% of the benefit costs, caps as above.
Platinum - Covers 90% of benefit costs, caps as above.
For people with incomes between 133% - 400% of the federal poverty
level, out-of-pocket limits will reduced by a portion 1/3 - 2/3 of $5,950
for individuals and $11,900 for families.
2015 - 2018 Reforms
* States can participate in healthcare choice compacts to allow carriers
to sell their plans in any state (2016).
* The "Cadillac Tax" will take effect in 2018 which is a tax on insurance plans that
are over $10,200 per year in premiums for individuals, and over $27,500
per year in premiums for families. This tax is assessed directly to the insurance
carrier.
* Medicare payments will be reduced to certain hospitals by 1% for patients
that develop hospital acquired medical condition (2015).
