Taking the Post-Election Health-Care Temperature

Now that President Obama has won a second term, the Affordable Care Act (ACA, commonly called “Obamacare”) has gained renewed attention and urgency.

As Kaiser Health News reminds, “[T]he law will have sweeping ramifications for consumers, state officials, employers and health care providers, including hospitals and doctors.” Courtesy of KHN, here’s a refresher about the ACA’s key features and the timetable for implementing the remaining provisions of the law.

It’s uncertain whether you will pay more or less for the new coverage. It includes incentives to control costs via, for example, more coordinated care. Such measures take time to register bottom-line results, and some provisions remain under Congressional scrutiny.

But new taxes and fees should offset some costs. Next year individuals earnings more than $200,000 and married couples earning more than $250,000 will pay a higher Medicare payroll tax, and higher-income earners pay more on unearned income, such as dividends and interest.

New taxes and fees will be levied on several major health industries. Next year, medical device manufacturers and importers must pay more sales tax. Fees will rise on health insurers and brand name drugs. The higher cost of doing business probably will be passed onto consumers via more expensive premiums.

Some aspects of the ACA already are in force:

  • Parents may keep children as old as 26 on their health plan.
  • Health plans no longer may impose lifetime coverage limits.
  • Many preventive services are covered with no out-of-pocket costs. (See our blog post, “Health Care Reform: New Coverage for Women”.)
  • Medicare now covers many preventive services without cost to beneficiaries.
  • Insurance coverage may not be canceled after you get sick unless you committed fraud on your original application.
  • Children with pre-existing conditions may not be denied coverage.

Some key features of the new law won’t be in force until 2014, when most people must have health insurance or pay a fine. Some states have passed laws barring the requirement to be insured, but they don’t override federal law.

Some existing health plans that haven’t changed significantly since passage of the law are excused from certain parts of the law. Called “grandfathered” plans, they are allowed to charge beneficiaries part of the cost of otherwise fully subsidized preventive services.

If your plan is one of these but your employer changes it substantially-for example, by raising co-pays-it’s no longer protected by grandfather status.

As of 2014:

  • Adults with pre-existing conditions may not be denied coverage.
  • Individual penalties for not having health insurance start at $95 a year or as much as 1 percent of income, whichever is greater. The penalty increases to $695 or 2.5 percent of income by 2016. Penalties for uninsured families would be the greater of $2,085 or 2.5 percent of household income.

    The requirement can be waived for reasons including financial hardship or religious belief.

  • Millions more people will qualify for federal subsidies to purchase insurance. Millions more will qualify for Medicaid.

    Individuals who earn as much as four times the federal poverty level (as much as $44,680) may qualify for help paying for their premiums. A family of four earning as much as $92,200 may qualify. Medicaid eligibility includes anyone whose income is lower than 133 percent of the federal poverty level ($14,856 for an individual and $30,656 for a family of four).

    The Supreme Court ruled in June that states, which administer Medicaid programs, may not be forced to accept this expansion, but the election results may influence governors who have said they will resist.

  • Insurance exchanges, state-based programs to market insurance plans for people shopping for health coverage (primarily individuals and small businesses) will become operational. In addition to offering plan comparisons, they will assist consumers who may be eligible for federal subsidies.
  • People who have insurance through their employer may retain that coverage if their employers keep those plans. They are not required to do so. They may change premiums, deductibles, co-pays and network coverage.
  • Businesses with at least 50 employees that don’t provide health-care coverage but have at least one full-time worker who receives subsidized coverage in the health insurance exchange must pay a fee of $2,000 per full-time employee. The first 30 workers would be excluded from the fee. Companies with 50 or fewer employees are not assessed penalties.

    Tax credits will be available to small business owners to help cover insurance costs.

  • Medicare beneficiaries will see a gradual narrowing of the gap in prescription drug plans (the so-called “doughnut hole”). Seniors still will pay 25 percent of their prescription drug costs, but since the ACA was passed, according to the Department of Health and Human Services, 5.6 million seniors have saved $4.8 billion on prescription drugs.
  • There is less subsidy for Medicare Advantage plans, which are private plans offered as an alternative to traditional Medicare. They’re more expensive, but often include extras such as free eyeglasses and hearing aids.

Some elements of the ACA remain in flux or have died on the vine. As KHN notes, the high-risk insurance pools established in 2010 for uninsured people who couldn’t find coverage, or a plan they could afford, had fewer enrollees because the cost and requirements were too much for some people to meet. Measures have been taken to address problems, and the program is showing improvement. A long-term care provision for people to buy federally guaranteed insurance is not happening because it was financially unviable.

Aspects of the reform could be curtailed if Congress chooses to reduce some subsidies, KHN says, to address the budget deficit. Taxes on device manufacturers could be rolled back as part of a budget deal.

Whether President Obama’s re-election was a resounding vote for the ACA or only an invitation to keep diddling with its provisions will become apparent soon. But there is no doubt that it has already had an impact on how we think about providing medical care for people who need it now, and will need it later. That’s pretty much everyone.

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