Over the Top with Healthcare Reform

The Patient Protection and Affordable Care Act (P.L. 111-148), commonly known as the Healthcare Reform bill, passed on March 23 – and then passed again with changes to the student loan portions of the bill. The focus of this legislation is to expand coverage, control healthcare costs, and improve the healthcare delivery system.

With all the commotion and statements that were made by politicians to drive public opinion, this month’s edition of e-Perspectives will provide a summary of what was included in the bill that passed. Many of the provisions do not take effect until 2014 and complete phase-in occurs over 10 years. Once things settle down and implementation kicks in, we can expect that Congress will find holes that were unintended and there will be legislation to clarify and plug the gaps as well as make refinements in the years ahead.

Listed below are some of the less widely publicized healthcare reform provisions* by the year it will go into effect. See www.kff.org for a complete listing of all provisions.

Insurance Reform

    • Require qualified health plans to provide coverage without cost-sharing for preventive services (A or B services by U.S. Preventive Services Task Force), recommended immunizations, preventive care for infants, children and adolescents, and additional preventive care and screenings for women. 2010
    • Establish a process for reviewing increases in health plan premiums and require plans to justify increases. States are required to report on trends in premium increases and recommend that plans be excluded from the Exchange based on unjustified premium increases. 2010
    • Create a temporary reinsurance program for employers providing health insurance coverage to retirees over age 55 who are not eligible for Medicare. 2010
    • Prohibit individual and group health plans from placing lifetime dollar limits on coverage and prohibits insurers from rescinding coverage except in cases of fraud. 2010
    • Require health plans to report the proportion of premium dollars spent on clinical services, quality and other costs and provide rebates to consumers for the amount of the premium spent on clinical services and quality that is less than 85% for large group plans and 80% for small group and individual plans. 2010
    • For consumer protection, establish an internet website to help residents identify health coverage options and develop a standard format for presenting information on coverage options. 2010
    • Develop standards for insurers to use in providing information on benefits and coverage. 2012
    • Simplify health insurance administration by adopting a single set of rules for eligibility verification and claims status (2013), electronic funds transfers and health care payment and remittance (2014), and health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments and referral certification and authorization rules (2016).
    • Limit any waiting periods for coverage to 90 days. 2014
    • Allow states the option of merging the individual and small group market. 2014
    • Create an essential benefits package that provides a comprehensive set of services, covers at least 60% of the actuarial value of the benefits, limits costsharing to current law HSA limits, and is not more extensive than the typical employer plan. 2014
    • Require guarantee issue and renewability and allow rating variation based only on age, premium rating area, family composition and tobacco use in the individual, small group market and the Exchanges. 2014 Quality Improvement
    • Establish a commissioned Regular Corps and a Ready Reserve Corps for service in time of a national emergency. 2010
    • Reauthorize and amend the Indian Health Care Improvement Act. 2010
    • Support comparative effectiveness research by establishing a non-profit Patient- Centered Outcomes Research Institute. 2010
    • Develop a national quality improvement strategy that includes priorities to improve the delivery of health care services, patient health outcomes and population health. 2011
    • Improve access to care by increasing funding by $11 billion for community health centers and the National Health Service Corps and establish new programs to support school-based health centers and nurse-managed health clinics. 2011
    • Establish a new trauma center program to strengthen emergency department and trauma center capacity. 2011

Medicaid

    • States have the option to expand Medicaid eligibility to childless adults beginning April 1, 2010, but will receive their regular federal medical assistance percentage (FMAP) until 2014. 2010
    • Prohibit federal payments to states for Medicaid services related to health care acquired conditions. 2011
    • Create new demonstration projects in Medicaid to:
      • make bundled payments for episodes of care that include hospitalizations 2012,
      • make global capitated payments to safety net hospital systems 2010,
      • allow cost-savings to be shared among pediatric medical providers 2012,
      • provide Medicaid payments to institutions of mental disease for adults who require stabilization of an emergency condition. 2011
    • Increase Medicaid payments for primary care services by primary care doctors with 100% federal funding. 2013
    • Expand Medicaid to all non-Medicare eligible individuals under age 65. 2014

Tax Changes

    • Limit the deductibility of executive and employee compensation to $500,000 per applicable individual for health insurance providers. 2010
    • Impose additional requirements on non-profit hospitals. Failure to meet the requirements results in a tax of $50,000 per year. 2010
    • Exclude the costs for over-the-counter drugs not prescribed by a doctor from being reimbursed through an HRA or health FSA and from being reimbursed ona tax-free basis through an HSA or Archer Medical Savings Account. 2100
    • Eliminate the tax deduction for employers who receive Medicare Part D retiree drug subsidy payments. 2013
    • Impose an annual fee on the health insurance sector. 2014

Workforce

    • Increase workforce supply and support training of health professionals through scholarships and loans. 2010
    • Support the development of training programs that focus on primary care models such as medical homes, team management of chronic disease, and those that integrate physical and mental health services. 2010
    • Support the development of interdisciplinary mental and behavioral health training programs and establish a training program for oral health professionals. 2010
    • Establish Teaching Health Centers to provide Medicare payments for primary care residency programs in federally qualified health centers. 2010
    • Establish a Workforce Advisory Committee to develop a national workforce strategy. 2010

Prevention and Wellness

    • Provide grants for up to five years to small employers that establish wellness programs. 2011
    • Require chain restaurants and food sold from vending machines to disclose the nutritional content of each item. 2011
    • Provide Medicare beneficiaries access to a comprehensive health risk assessment, creation of personalized prevention plan, and incentives to Medicare and Medicaid to complete behavior modification programs. 2011
    • Increase Medicare payments for certain preventive services to 100% of actual charges; eliminate cost-sharing for preventive services in Medicare. 2011
    • Permit employers to offer employees rewards of 30-50% of the cost of coverage for participating in a wellness program and meeting health related standards. 2014

Medicare

  • Ban new physician-owned hospitals in Medicare. 2010
  • Provide a 10% Medicare bonus payment to primary cre physicians and to genereal surgeons practicing in health professional shortage areas. 2011
  • Require pharmaceutical manufacturers to provide a 50% discount on brandname prescriptions filled in the Medicare Part D coverage gap. 2011
  • Prohibit Medicare Advantage plans from imposing higher cost-sharing requirements than is required under the traditional fee-for-service program for some Medicare covered benefits. 2011
  • Reduce Medicare payments that would be made to hospitals by specified percentages to account for excess preventable hospital readmissions. 2012
  • Provide bonus payments to high quality Medicare Advantage plans. 2012

* Adapted from The Kaiser Family Foundation, Health Reform.

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