The Affordable Care Act was signed into law on March 23, 2010 by President Obama. It is primarily health insurance reform legislation. The passage of this legislation was highly controversial. Most Democrats supported the legislation and most Republicans opposed it. Politicians, countless media spin doctors, healthcare industry participants and lobbyists shouted their opinions about the legislation both before it was passed and continue to do so afterward.
In reality, while the healthcare law is not perfect, it does address many issues that have needed to be addressed for decades. There are some aspects of the law that can and should be improved on and there also are many healthcare issues that still need to be addressed, especially dealing further with the quality and cost of healthcare.
Most people have an opinion about the new healthcare law and many strongly support or oppose it, yet few people have any idea about what the law includes and why they really should be in favor of or against the law. It is time for Americans to stop listening to the talking points of the politicians and self-appointed media pundits and the spin and misinformation they are spewing.
Healthcare now represents over 17% of the American GNP and it is increasing every year. Hundreds of thousands of people work in insurance companies dealing with healthcare, yet not one of them actually provides healthcare. Countless others in hospitals and doctors’ offices are handling paperwork using paper processes that have barely changed in the last fifty years. We have the best healthcare in the world for those that can afford it, yet millions of Americans get little or no healthcare. Americans spend billions of dollars every year on diet plans, yet the average weight of Americans increases every year, resulting in epidemic levels of diabetes, coronary and other diseases and medical conditions, resulting in escalating healthcare costs. Medication developed and manufactured by American pharmaceutical companies is priced significantly higher in the U.S. than in other countries.
Medical errors made by doctors, nurses and other medical professionals are one of the leading causes of death and injury in the U.S. every year. In many cases, best practices are established but not followed. Malpractice insurance costs are too high, yet if your family member suffers injury or death due to medical errors, are you ready to have a law capping your ability to take legal action? Americans can buy almost anything across state lines, but not health insurance. Millions of unmarried heterosexual couples cannot include their partner in their health insurance plan. Countless families have been wiped out financially due to serious illnesses either not covered or insufficiently covered by medical insurance, or because they could not get health insurance.
The Affordable Healthcare Act addresses some of these and other problems, yet there is much the law does not address, or that is inadequately addresses. Congress still has much to do regarding healthcare. Are they up to the challenge?
In employee satisfaction surveys and employee opinion surveys employees are asked their opinions about and satisfaction with employee benefits they receive from their employer. Most employees across many industries are saying their health insurance costs are escalating much too quickly while their coverage is being cut back. For many employers and their employees, annual increases in health insurance costs have averaged 15% – 25% and more over the last few years due to actual increases in medical costs as well as insurance companies increasing premiums in anticipation of the healthcare legislation.
The non-partisan Congressional Budget Office says the new law will actually lower healthcare costs over time. Many people agree with them and many others disagree. The majority of people have formed their opinions with little or no knowledge of the healthcare legislation.
Following are the key provisions of the Affordable Healthcare Act. This is information Americans should know about so that they can make their own, informed decisions about the healthcare legislation and what needs to be done going forward.
Effective as of January 1, 2011
– 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 dropping policyholders when they get sick.
– Insurance companies are prohibited from imposing lifetime dollar limits on essential benefits, like hospital stays in new policies issued.
– 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.
– 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 charging co-payments 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.
– Adults with pre-existing conditions will be 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. Premiums are allowed to vary by age, geographic area, and family composition. Out-of-pocket spending is limited to $5,950 for individuals and $11,900 for families, excluding premiums.
– 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.
– 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 FDA is authorized to approve generic versions of biologic drugs and grant biologics manufacturers 12 years of exclusive use before generics can be developed.
– The Indian Health Care Improvement Act is reauthorized and amended.
– The President will establish within the Department of Health and Human Services 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.
– Indoor tanning services are subjected to a 10% service tax.
– 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.
– Non-profit Blue Cross insurers are required to maintain a loss ratio (money spent on procedures over money incoming) of 85% or higher to take advantage of IRS tax benefits.
– Companies which 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.
– Insurers will be required to spend 85% of large-group and 80% of small-group and individual plan premiums (with certain adjustments) on health care or to improve health-care quality, or return the difference to the customer as a rebate.
– 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, healthcare reimbursement arrangements and health savings accounts cannot be used to pay for over the counter drugs, purchased without a prescription, except for insulin.
Effective by 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.
– New tax reporting changes come into effect which aims to prevent tax evasion by corporations and individuals.
Effective by January 1, 2013
– Self-employment and wages of individuals above $200,000 annually (or of families above $250,000 annually) will be subject to an additional tax of 0.5%.
Effective by January 1, 2014
– 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 do not secure insurance; this will rise to $695, or 2.5% of income, by 2016. This is an individual limit; families have a limit of $2,085. Exemptions to the fine in cases of financial hardship or religious beliefs are permitted.
– Insurers are prohibited from establishing annual spending caps.
– Expand Medicaid eligibility; 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. A 16 FTE firm with a $35,000 average salary would be entitled to a 10% premium subsidy.
– Impose a $2000 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).
– Set a maximum of $2000 annual deductible for a plan covering a single individual or $4000 annual deductible for any other plan (see 111HR3590ENR, section 1302). These limits can be increased under rules set in section 1302.
– Creation of a new voluntary long-term care insurance program; enrollees who have paid premiums into the program and become eligible (due to disability or chronic illnesses) would receive benefits that help pay for assistance in the home or in a facility.
– Employed individuals who pay more than 9.5% of their income on health insurance premiums will be permitted to purchase insurance policies from a state-controlled health insurance option. If the employer provides an employer sponsored plan but the individual earns less than 400 per cent of the Federal Poverty level and could qualify for a government subsidy, the employee is entitled to obtain a “free choice voucher” from the employer of equivalent value to the employer’s offering which can be spent in the exchange to buy a subsidized policy of his own choosing.
– 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.
– 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.
– Establish health insurance exchanges, and subsidization of insurance premiums for individuals with income up to 400% of the poverty line, as well as single adults. The subsidy will be provided as an advanceable, refundable tax credit. Refundable tax credit is a way to provide government benefit to people even with no tax liability.
Contributing article by: Howard Deutsch
World News US