By Dr. Randi Nelson
On March 23, 2010, President Obama signed into law comprehensive health reform legislation, the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act. This article is going to take a look into the key provisons of the act.
Overall the legislation is the most significant health legislation since Medicare in 1965 and will expand health insurance to an additional 32 million Americans by 2014.
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Here is a short synopsis of what you can expect.
The act significantly changes the manner in which individuals will be insured. Some key changes are 1. No lifetime benefit limits and no annual limits on coverage. 2. The denial of health care coverage cannot be denied based on health status. 3. Dependent adult children can stay on parents’ health policy until age 26. 4. No insurance coverage exclusions for pre-existing conditions beginning in 2014. 5. Mandates coverage of preventive care. 6. Coverage cannot be cancelled when someone becomes sick. 7. Limits insurers’ ability to set premiums based on health status and other factors. 8. Creates a new marketplace called an insurance exchange to help people find insurance. 9. Provides subsidies to help people buy insurance through the exchanges. 10. Requires all Americans to have health insurance.
The acts builds upon existing employer and government sponsored insurance programs. Most individuals with coverage through their employers should not see substantial changes. And individuals with traditional Medicare coverage should not see substantial changes, but will receive some additional benefits such as free preventive screenings such as colonoscopies and mammograms, a free annual physical or “wellness” visit and discounts for brand-name prescription drugs.
Beginning in 2014, all U.S. citizens and legal residents must have coverage or pay a penalty – “The Mandate”. Again individuals with employee insurance should see no changes, however uninsured individuals will have access to coverage through an insurance exchange which is an organized marketplace for the purchase of health insurance set up as a governmental or quasi-governmental entity to help insurers comply with consumer protections, compete in cost-efficient ways, and to facilitate the expansion of insurance coverage to more people. Exchanges do not bear risk themselves – they are not insurers. These exchanges will be available to both individuals and small businesses (businesses with employees 50 to 100). To assist the uninsured, subsidies and tax credits will be available to help low-income individuals buy private health insurance. For individuals who are qualified the eligibility for Medicaid will be expanded to low-income individuals. Every state in the union must set up an exchange by 2014.
The timeline…what is happening when??
Beginning in 2010 the following goes into effect:
- No lifetime benefit limits on coverage for all new plans.
- Appeals process and patient protections for all new plans.
- Dependent children up to age 26 can remain covered under their parents’ plans.
- Children with pre-existing conditions cannot be denied coverage.
- New plans cannot cancel coverage for individuals if they get sick.
- No discrimination based on salary for all group health plans.
- Insurers will be required to spend at least 80% of all premiums payments on medical services.
- The establishment of a temporary national high-risk insurance pool for individuals with pre-existing conditions and early retirees those 55 or older but not yet eligible for Medicare. Once the exchanges are in place, this provision will expire.
- Establishes a national strategy to improve the delivery of health services and patient health outcomes. With the reduction of health disparities as a major focus.
- Small businesses can receive tax credits to purchase insurance for employees.
- Medicare beneficiaries receive a 50% discount on brand-name drugs.
- Establish the National Prevention, Health Promotion and Public Health Council to develop a national strategy to improve the nation’s health.
- Require chain restaurants and food sold from vending machines to disclose the nutritional content of each item.
- Families with an annual income above $250,000 will be required to: Pay an additional 3.8% tax on investment income and contribute more to the Medicare program in payroll taxes.
- Increase the threshold for the itemized deduction for unreimbursed medical expenses from 7.5% of adjusted gross income to 10% of adjusted gross income for regular tax purposes; waive the increase for individuals age 65 and older for tax years 2013 through 2016.
- Most Americans will be required to have insurance coverage or face a federal penalty.
- Fines begin at $95/person, max $285/family or 1% household income, whichever greater.
- Insurers will be prohibited from refusing to sell policies and there are new limits on their ability to set prices based on health status.
- Businesses with 50 or more employees must provide coverage or pay a penalty.
- Expand Medicaid to all non-Medicare eligible individuals under age 65 (children, pregnant women, parents, and adults without dependent children) with incomes up to 133% FPL based on modified adjusted gross income (MAGI) and provides enhanced federal matching for new eligibles.
Penalties would grow to $695 for each family member, up to $2,085, or 2.5% of taxable income.
According to most polls, Americans are still trying to gain a better understanding of the new law and how it affects them. I would recommend utilizing the internet and your local political representatives. Listed below are great internet resources for additional more information.
We’ve entered a new era in the quest for universal coverage for every American.
Kaiser Family Foundation: www.kff.org
Federal government: www.healthreform.gov
Timeline for Health Care Reform Implementation: System and Delivery Reform Provisions, The Commonwealth Fund, April 2010
Timeline for Health Care Reform Implementation: Health Insurance Provisions, The Commonwealth Fund, April 2010
And special thanks to Dr. Lisa Chamberlain of Stanford University Medical School for providing the template for this article.