Federal Health Care Law(Passed in 2010)

Congress passed and President Obama signed the health care bill into law. The following is a summary of various aspects of the law with the changes which are planned for each year.

(With much thanks to Regina Curran for her contributions to the content of this text).

2010 Changes

    *  Adult children can remain on their parents health insurance policies until age 26
    *  Health insurance companies cannot drop a person for filing too many claims for coverage
    *  Children (under age 19) cannot be denied coverage due to a "pre-existing condition"
    *  Adults with "pre-existing conditions" who have not been able to qualify for insurance for at least six months will be able to qualify through state-run "high-risk pools" (available July 1). Individual medical expenses capped at $5950/year; family medical expenses capped at $11,900/year.

    * $250 payment for t
hose who reach Medicare Part D “donut hole” (this payment will be reduced for individuals with income over $85,000 and couples with income over $170,000).

    * No cap on lifetime coverage.
    * Tight restrictions on annual coverage limits.
    * Small business (fewer than 25 employees, average „wage under $ 50,000) tax credit of up to 35% of health premiums if the employer pays at least 50 % the premium.
    * Temporary re-insurance program (until exchanges available in 2014) to help offset the cost for employers who provide health insurance for retirees age 55-64
    * New plans must offer free preventive services
    * Medicaid “money follows the person” extended until 2016.

 2011 Changes

    *  Medicare co-payments and deductibles eliminated for preventive services and "annual wellness exam"
    *  Medicare Part D "means testing" for those beneficiaries subject to Part B "means testing" (individual income over $85,000/couple income over $170,000)
    *  Medicare reimbursement for primary care providers increases by 10%
    *  Over-the-counter drugs excluded from payments from "flexible savings accounts"
    *  Medicaid state plan option which would allow Medicaid enrollees with at least two chronic conditions to designate a home health provider. States will receive a 90% FMAP(Federal reimbursement for Medicaid) for two years for home health services including care management.

2012 Changes:

    *  Subsidies for Medicare Advantage reduced (Medicare Advantage plans will need to continue offering basic Medicare benefits) unrecognized text
    * Medicaid coverage for those whose income is up to 133 of the federal poverty level(this change does not apply to “dual eligible”).
    *  “Independence at Home” demonstration project to provide primary care services to high-need Medicare beneficiaries in their home and allow providers to share in savings from reduced hospitalizations and improved outcomes

2013 Changes:

    *  Lower contribution limits for "flexible  savings accounts”. Fewer expenses
qualify for “flexible savings accounts” coverage.
    * Medicare payroll tax increases from 1.45% to 2.35% for incomes over $200,000-individuals/$250,000-married filing jointly.
    * 3.8% tax on income from stocks and investments for incomes over $200,000-individuals/$250,000 ­married filing jointly.
    * Increase threshold for itemizing medical deduction from 7.5% to 10% (those 65 and older exempt 2013-2016).
    * National Medicare pilot program to develop and evaluate bundled payment for hospitalization/physician services/outpatient services/post acute services for a period beginning 3 days prior to a hospitalization and continuing until 30 days after discharge.

2014 Changes:

    * Adults cannot be denied coverage due to a “pre-existing condition”. 
    * Health insurance mandatory fine (1% of income) imposed if no coverage.
    * State run “exchanges” available to provide insurance options (individuals or small businesses can purchase insurance through “exchanges”.) Subsidies will be available to low and middle income families (income limit 309/0 of federal poverty amount) to purchase insurance through these exchanges
    *  Small business tax credit increases (fewer than 25 employees, average wage under $50,000) to up to 50% of the health insurance premium if the employer pays at least 50% of the premium
    *  Annual limits on coverage prohibited.
    *  Age rating limited to 3-1.
    *  Gender rating prohibited.

2016 Changes:

Fine for not having insurance increases to 2.5% of income.

2018 Changes:

    *  Higher Medicare payroll taxes for those earning over $200,000-
      individual/$250,000 married filing jointly. 3.8% of Medicare tax on unearned income
    *  “Cadillac tax”-employer plans with total premiums (employee payment + employer contribution) above a threshold will 40% tax.

2020 Changes:

 Medicare Part D “donut hole” eliminated.

Small Businesses

  •  Fewer than 50 employees--not required to provide insurance for employees
  •  Fewer than 25 employees (average wage under $50,000)--tax credits available to help with cost of insurance if the employer pays at least 50% of the premiums.
  •  More than 50 employees-penalty if health insurance not available and employees receive subsidized coverage.
Health Care Reform and Medicare

    * No change in the guaranteed Medicare benefits.
    * No annual cap on “out of pocket” expenses.
    * Funding rate for Medicare Advantage Plans (114 % of the funding rate for “traditional Medicare”) will be reduced.
    * Annual growth rate will be reduced from 6.7% to 5.7%--extending the solvency period for the Part A trust fund by 9 years.

Health Care Reform and Medicaid- Long Term Services and Supports

    * “Balanced Incentive Payment Program”-
      participating states will receive additional federal financial assistance if they commit to shifting Medicaid funding from nursing homes to home and community based services.
    * Extends “Money Follows the Person” through 2016.
    * Additional funding for ADRCs(Aging and Disability Resource Centers).
    * Spousal impoverishment protection for spouses of individuals receiving services through a Medicaid home and community based waiver (2014-2019)only).
    * Creates “Community Option-First Choice” for those otherwise eligible for Medicaid institutional coverage.

CLASS ACT(Long Term Care Insurance)

    * Effective 2011
    * Voluntary monthly payroll deductions (employee “opt-out” if employer participates) .
    * Five year period for the fund to collect sufficient monies before it can disburse payments.
    * Cash benefit (amount to be determined but could be about $ 50-75 per day) if a person needs assistance with ADLs(Activities of Daily Living) The benefits may be used for home and/or community based care, assisted living, or nursing home care.

Independent Payment Advisory Board

    * 15 members
    * Submit legislative proposals containing recommendations to reduce per capita growth in Medicare spending if spending exceeds target growth rate.
    * Proposals submitted to the President and Congress for immediate consideration
    * Prohibited from submitting recommendations which would ration care or change eligibility.