Monthly Archives: July 2012

Another two cents…

OK, so it’s been a while since I’ve posted anything here….I’ve been a little busy!  Three grandbabies to love and play with, an English wedding to prepare for and enjoy, and a President to get re-elected….nothing too important, but time consumiing, nonetheless!  Hahahaha!

Anyway, I’m back at the computer some more lately, and before I get going any further on the political stuff, I figured it might be a good idea to start with a pretty easy-to-read and understand overview I found yesterday that puts the “Obamacare” or “Affordable Care Act” or “Health Care Law” into a pretty straightforward timeline and explanation of what each provision means so that we all have at least a basic understanding of what is being discussed.  I have to admit, the whole thing has been pretty confusing and dry for me, and this (although it does take up some page space!) is a pretty good encapsulation of what it contains in words I can decipher. Of course, I offer a few tidbits of the political back-and-forth that has happenend before and since its passage preceeding the provisions part, hahaha.  More later, but, until then, here’s your homework: 🙂

THE AFFORDABLE HEALTH CARE ACT

 The House passed the bill with a vote of 219 to 212 on March 21, 2010, with 34 Democrats and all 178 Republicans voting against it. The following day, Republicans introduced legislation to repeal the bill. Obama signed the original bill into law on March 23, 2010

The 2011 comprehensive CBO estimate projected a net deficit reduction of more than $200 billion during the period 2012–2021. CBO estimated in March 2011 that for the 2012–2021 period, the law would result in net receipts of $813 billion, offset by $604 billion in outlays, resulting in a $210 billion reduction in the deficit

(As of the bill’s passage into law in 2010, CBO estimated the legislation would reduce the deficit by $143 billion over the first decade, but half of that was due to expected premiums for the C.L.A.S.S. Act, which has since been abandoned). Although the CBO generally does not provide cost estimates beyond the 10-year budget projection period (because of the great degree of uncertainty involved in the data) it decided to do so in this case at the request of lawmakers, and estimated a second decade deficit reduction of $1.2 trillion. CBO predicted deficit reduction around a broad range of one-half percent of GDP over the 2020s while cautioning that “a wide range of changes could occur”.

In March 2010, pollsters probed the reasons for opposition. In a CNN poll, 62% of respondents said the Act would “increase the amount of money they personally spend on health care,” (which is false in nearly EVERY case!) 56% said the bill “gives the government too much involvement in health care,”(which is also FALSE, as the ACA doesn’t even have as much involvement as it does in Medicare, which is the nation’s MOST POPULAR Federal program) and only 19% said they and their families would be better off with the legislation. (Which holds true until they are actually informed of what is contained in the bill…at which point, the percentage rises to the 70’s!). In The Wall Street Journal, pollsters Scott Rasmussen and Doug Schoen wrote, “One of the more amazing aspects of the health-care debate is how steady public opinion has remained… 81% of voters say it’s likely the plan will end up costing more than projected [and 59%] say that the biggest problem with the health-care system is the cost: They want reform that will bring down the cost of care. For these voters, the notion that you need to spend an additional trillion dollars doesn’t make sense.”

USA Today found opinions were starkly divided by age, with a solid majority of seniors opposing the bill (due to fear that it will affect their Medicare eligibility, which it does not) and a solid majority of those younger than 40 in favor.

A June 2012 Reuters-Ipsos poll indicated that much of the opposition to the law was because Americans wanted more reform, not less. About one-third of Republicans and independents who oppose the law did so because it did not go far enough to fix healthcare. 71% of Republican opponents reject it overall, while 29% believed it did not go far enough, while independent opponents are divided 67% to 33%. Among Democratic opponents, 67% reject it overall, and 51% wanted the measure to go further.

 

The Affordable Care Act (Timeline)

Provisions

The Act is divided into 10 titles and contains provisions that became effective immediately, 90 days after enactment, and six months after enactment, as well as provisions phased in through to 2020. Below are some of the key provisions of the Act. For simplicity, the amendments in the Health Care and Education Reconciliation Act of 2010 are integrated into this timeline.

Effective at Enactment

  • The Food and Drug Administration is now authorized to approve generic versions of biologic drugs and grant biologics manufacturers 12 years of exclusive use before generics can be developed.
  • The Medicaid drug rebate for brand name drugs is increased to 23.1% (except the rebate for clotting factors and drugs approved exclusively for pediatric use increases to 17.1%), and the rebate is extended to Medicaid managed care plans; the Medicaid rebate for non-innovator, multiple source drugs is increased to 13% of average manufacturer price.
  • A non-profit Patient-Centered Outcomes Research Institute is established, independent from government, to undertake comparative effectiveness research. This is charged with examining the “relative health outcomes, clinical effectiveness, and appropriateness” of different medical treatments by evaluating existing studies and conducting its own. Its 19-member board is to include patients, doctors, hospitals, drug makers, device manufacturers, insurers, payers, government officials and health experts. It will not have the power to mandate or even endorse coverage rules or reimbursement for any particular treatment. Medicare may take the Institute’s research into account when deciding what procedures it will cover, so long as the new research is not the sole justification and the agency allows for public input. The bill forbids the Institute to develop or employ “a dollars per quality adjusted life year” (or similar measure that discounts the value of a life because of an individual’s disability) as a threshold to establish what type of health care is cost effective or recommended. This makes it different from the UK’s National Institute for Health and Clinical Excellence.
  • Creation of task forces on Preventive Services and Community Preventive Services to develop, update, and disseminate evidenced-based recommendations on the use of clinical and community prevention services.
  • The Indian Health Care Improvement Act is reauthorized and amended.
  • Chain restaurants and food vendors with 20 or more locations are required to display the caloric content of their foods on menus, drive-through menus, and vending machines. Additional information, such as saturated fat, carbohydrate, and sodium content, must also be made available upon request. But first, the Food and Drug Administration has to come up with regulations, and as a result, calories disclosures may not appear until 2013 or 2014.

Effective June 21, 2010

  • Adults with existing conditions became eligible to join a temporary high-risk pool, which will be superseded by the health care exchange in 2014. To qualify for coverage, applicants must have a pre-existing health condition and have been uninsured for at least the past six months. There is no age requirement. The new program sets premiums as if for a standard population and not for a population with a higher health risk. Allows premiums to vary by age (4:1), geographic area, and family composition. Limit out-of-pocket spending to $5,950 for individuals and $11,900 for families, excluding premiums.

Effective July 1, 2010

  • The President established, within the Department of Health and Human Services (HHS), a council to be known as the National Prevention, Health Promotion and Public Health Council to help begin to develop a National Prevention and Health Promotion Strategy. The Surgeon General shall serve as the Chairperson of the new Council.
  • A 10% sales tax on indoor tanning took effect.

Effective September 23, 2010

  • Insurers are prohibited from imposing lifetime dollar limits on essential benefits, like hospital stays, in new policies issued.
  • Dependents (children) will be permitted to remain on their parents’ insurance plan until their 26th birthday, and regulations implemented under the Act include dependents that no longer live with their parents, are not a dependent on a parent’s tax return, are no longer a student, or are married.
  • Insurers are prohibited from excluding pre-existing medical conditions (except in grandfathered individual health insurance plans) for children under the age of 19.
  • Insurers are prohibited from charging co-payments, co-insurance, or deductibles for Level A or Level B preventive care and medical screenings on all new insurance plans.
  • Individuals affected by the Medicare Part D coverage gap will receive a $250 rebate, and 50% of the gap will be eliminated in 2011. The gap will be eliminated by 2020.
  • Insurers’ abilities to enforce annual spending caps will be restricted, and completely prohibited by 2014.
  • Insurers are prohibited from dropping policyholders when they get sick.
  • Insurers are required to reveal details about administrative and executive expenditures.
  • Insurers are required to implement an appeals process for coverage determination and claims on all new plans.
  • Enhanced methods of fraud detection are implemented.
  • Medicare is expanded to small, rural hospitals and facilities.
  • Medicare patients with chronic illnesses must be monitored/evaluated on a 3-month basis for coverage of the medications for treatment of such illnesses.
  • Companies that provide early retiree benefits for individuals aged 55–64 are eligible to participate in a temporary program, which reduces premium costs.
  • A new website installed by the Secretary of Health and Human Services will provide consumer insurance information for individuals and small businesses in all states.
  • A temporary credit program is established to encourage private investment in new therapies for disease treatment and prevention.

Effective January 1, 2011

  • Insurers must spend a certain percent of premium dollars on eligible expenses, subject to various waivers and exemptions; if an insurer fails to meet this requirement, there is no penalty, but a rebate must be issued to the policyholder.
  • The Centers for Medicare and Medicaid Services is responsible for developing the Center for Medicare and Medicaid Innovation and overseeing the testing of innovative payment and delivery models.
  • Flexible spending accounts, Health reimbursement accounts and health savings accounts cannot be used to pay for over-the-counter drugs, purchased without a prescription, except insulin.

Effective January 1, 2012

  • Employers must disclose the value of the benefits they provided beginning in 2012 for each employee’s health insurance coverage on the employees’ annual Form W-2’s. This requirement was originally to be effective January 1, 2011, but was postponed by IRS Notice 2010–69 on October 23, 2010.
  • New tax reporting changes were to come in effect to prevent tax evasion by corporations. However, in April 2011, Congress passed and President Obama signed the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 repealing this provision, because it was burdensome to small businesses. Before PPACA, businesses were required to notify the IRS on form 1099 of certain payments to individuals for certain services or property over a reporting threshold of $600. Under the repealed law, reporting of payments to corporations would also be required. Originally, it was expected to raise $17 billion over 10 years. The amendments made by Section 9006 of the Act were designed to apply to payments made by businesses after December 31, 2011, but will no longer apply because of the repeal of the section.

Effective by August 1, 2012

  • All new plans must cover certain preventive services such as mammograms and colonoscopies without charging a deductible, co-pay or coinsurance. Women’s Preventive Services – including well-woman visits, support for breastfeeding equipment, contraception and domestic violence screening – will be covered without cost sharing.

Effective by January 1, 2013

  • Income from self-employment and wages of single individuals in excess of $200,000 annually will be subject to an additional tax of 0.9%. The threshold amount is $250,000 for a married couple filing jointly (threshold applies to joint compensation of the two spouses), or $125,000 for a married person filing separately. In addition, an additional Medicare tax of 3.8% will apply to unearned income, specifically the lesser of net investment income or the amount by which adjusted gross income exceeds $200,000 ($250,000 for a married couple filing jointly; $125,000 for a married person filing separately. Effective by January 1, 2014
  • Maximum Out-of-Pocket Premium Payments under PPACA by Family Size and federal poverty level: (Source: CRS)Insurers are prohibited from discriminating against or charging higher rates for any individuals based on pre-existing medical conditions.
  • Impose an annual penalty of $95, or up to 1% of income, whichever is greater, on individuals who are not covered by an acceptable insurance policy; this will rise to a minimum of $695 ($2,085 for families), or 2.5% of income, by 2016. Exemptions to the mandatory coverage provision and penalty are permitted for religious reasons or for those for whom the least expensive policy would exceed 8% of their income. On June 28, 2012, the Supreme Court ruled that this penalty “must be construed as imposing a tax on those who do not have health insurance.” According to the Supreme Court, Congress does not have the power under the Commerce Clause to mandate insurance coverage, but it does have the power to levy the penalty as a tax.
  • Insurers are prohibited from establishing annual spending caps.
  • Expand Medicaid eligibility; all individuals with income up to 133% of the poverty line qualify for coverage, including adults without dependent children.
  • Two years of tax credits will be offered to qualified small businesses. In order to receive the full benefit of a 50% premium subsidy, the small business must have an average payroll per full-time equivalent (“FTE”) employee, excluding the owner of the business, of less than $25,000 and have fewer than 11 FTEs. The subsidy is reduced by 6.7% per additional employee and 4% per additional $1,000 of average compensation. As an example, a 16 FTE firm with a $35,000 average salary would be entitled to a 10% premium subsidy.
  • Impose a $2,000 per employee tax penalty on employers with more than 50 employees who do not offer health insurance to their full-time workers (as amended by the reconciliation bill).
  • For employer sponsored plans, set a maximum of $2,000 annual deductible for a plan covering a single individual or $4,000 annual deductible for any other plan (see 111HR3590ENR, section 1302). These limits can be increased under rules set in section 1302.
  • ·The CLASS Act provision would have created a voluntary long-term care insurance program, but in October 2011, the Department of Health and Human Services announced that the provision was unworkable and would be dropped, although an Obama administration official later said the President does not support repealing this provision.
    • Pay for new spending, in part, through spending and coverage cuts in Medicare Advantage, slowing the growth of Medicare provider payments (in part through the creation of a new Independent Payment Advisory Board), reducing Medicare and Medicaid drug reimbursement rate, cutting other Medicare and Medicaid spending.
    • Revenue increases from a new $2,500 limit on tax-free contributions to flexible spending accounts (FSAs), which allow for payment of health costs.
    • Establish health insurance exchanges, and subsidization of insurance premiums for individuals in households with income up to 400% of the poverty line. To qualify for the subsidy, the beneficiaries cannot be eligible for other acceptable coverage. Section 1401(36B) of PPACA explains that the subsidy will be provided as an advanceable, refundable tax credit and gives a formula for its calculation. Refundable tax credit is a way to provide government benefit to people even with no tax liability (example: Earned Income Credit). The formula was changed in the amendments (HR 4872) passed March 23, 2010, in section 1001.

a.^ Note: In 2016, the FPL is projected to equal about $11,800 for a single person and about $24,000 for family of four..

b. ^ DHHS and CBO estimate the average annual premium cost in 2014 to be $11,328 for family of 4 without the reform.

  • The U.S. Department of Health and Human Services (DHHS) and Internal Revenue Service (IRS) on May 23, 2012, issued joint final rules regarding implementation of new state-based health insurance exchanges to cover how the exchanges will determine eligibility for uninsured individuals and employees of small businesses seeking to buy insurance on the exchanges, as well as how the exchanges will handle eligibility determinations for low-income individuals applying for newly expanded Medicaid benefits.
  • Members of Congress and their staff will only be offered health care plans through the exchange or plans otherwise established by the bill (instead of the Federal Employees Health Benefits Program that they currently use).
  • A new excise tax goes into effect that is applicable to pharmaceutical companies and is based on the market share of the company; it is expected to create $2.5 billion in annual revenue.
  • Most medical devices become subject to a 2.3% excise tax collected at the time of purchase. (Reduced by the reconciliation act to 2.3% from 2.6%)
  • Health insurance companies become subject to a new excise tax based on their market share; the rate gradually rises between 2014 and 2018 and thereafter increases at the rate of inflation. The tax is expected to yield up to $14.3 billion in annual revenue.
  • The qualifying medical expenses deduction for Schedule A tax filings increases from 7.5% to 10% of earned income.

Effective by January 1, 2015

  • Physicians’ payments from federally funded programs such as Medicare will be modified to be based on the quality of care, not the volume
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