The Healthcare Bill: What to expect in next few years Part-2

WHAT HAPPENS IN 2011

• Medicare provides 10 percent bonus payments to primary care physicians and general surgeons.

• Medicare beneficiaries will be able to get a free annual wellness visit and personalized prevention plan service. New health plans will be required to cover preventive services with little or no cost to patients.

• A new program under the Medicaid plan for the poor goes into effect in October that allows states to offer home and community based care for the disabled.

• Payments to insurers offering Medicare Advantage services are frozen. These payments are to be gradually reduced to bring them more in line with traditional Medicare.

• Employers are required to disclose the value of health benefits on employees’ W-2 tax forms.

• An annual fee is imposed on pharmaceutical companies. The fee does not apply to companies with sales of $5 million or less.

WHAT HAPPENS IN 2012

• Physician payment reforms are implemented in Medicare to enhance primary care services and encourage doctors to improve quality and efficiency of care.

• An incentive program is established in Medicare for acute care hospitals to improve quality outcomes.

• The Centers for Medicare and Medicaid Services, which oversees the government programs, begin tracking hospital readmission rates and puts in place financial incentives to reduce preventable readmissions.

WHAT HAPPENS IN 2013

• A national pilot program is established for Medicare on payment bundling to encourage doctors, hospitals and other care providers to better coordinate patient care.

• The threshold for claiming medical expenses on itemized tax returns is raised to 10 percent from 7.5 percent of income. The threshold remains at 7.5 percent for the elderly through 2016.

• The Medicare payroll tax is raised to 2.35 percent from 1.45 percent for individuals earning more than $200,000 and married couples with incomes over $250,000. The tax is imposed on some investment income for that income group.

• A 2.9 percent excise tax in imposed on the sale of medical devices. Anything generally purchased at the retail level by the public is excluded from the tax.

WHAT HAPPENS IN 2014

• State health insurance exchanges for small businesses and individuals open.

• Most people will be required to obtain health insurance coverage or pay a fine if they don’t. Healthcare tax credits become available to help people with incomes up to 400 percent of poverty purchase coverage on the exchange.

• Health plans no longer can exclude people from coverage due to pre-existing conditions.

• Employers with 50 or more workers who do not offer coverage face a fine of $2,000 for each employee if any worker receives subsidized insurance on the exchange. The first 30 employees aren’t counted for the fine.

• Health insurance companies begin paying a fee based on their market share.

WHAT HAPPENS IN 2015

• Medicare creates a physician payment program aimed at rewarding quality of care rather than volume of services.

WHAT HAPPENS IN 2018

• An excise tax on high cost employer-provided plans is imposed. The first $27,500 of a family plan and $10,200 for individual coverage is exempt from the tax. Higher levels are set for plans covering retirees and people in high risk professions.

What will the New Health Care Reform Bring to its Stakeholders

Total Cost:

• $940 billion over ten years.

Coverage

• Once reform is fully implemented, over 95% of Americans will have health insurance coverage, including 32 million who are currently uninsured.

Budget deficit

• Reform will cut the federal budget deficit by $138 billion over the next ten years, and a whopping $1.2 trillion in the following ten years.

Health Insurance exchanges

• Health care will be more affordable for families and small businesses thanks to new tax credits, subsidies, and other assistance paid for largely by taxing insurance companies, drug companies, and the very wealthiest Americans.

• The Uninsured and self employed will be able to purchase insurance through state based exchanges with subsidies available to individuals and families with income between 133% and 400% of poverty level.

Subsidies

• Individuals and families who make between 100% – 400% of the Federal Poverty Level (FPL) and want to purchase their own health insurance on an exchange will be eligible for subsidies. They cannot be eligible for Medicare, Medicaid and cannot be covered by an employer.

Paying for plan by Taxes

• The Medicare Payroll Tax will be expanded to include unearned income. That will be a 3.8 % tax on investment income for families making more than $250,000 per year ($200,000 for individuals).

• Beginning in 2018, insurance companies will pay a 40 % excise tax on so-called “Cadillac” high-end insurance plans worth over $27,500 for families ($10,200 for individuals). Dental and vision plans are exempt and will not be counted in the total cost of a family’s plan.

• Tanning Tax will have 10 % excise tax on indoor tanning services.

Medicare

• Seniors on Medicare will pay less for their prescription drugs because the legislation closes the “donut hole” gap in existing coverage.

• Beginning in 2011, seniors in the gap will receive a 50 percent discount on brand name drugs. The bill also includes $500 billion in Medicare cuts over the next decade.

Employer Mandate:

• Technically, there is no employer mandate. Employers with more than 50 employees must provide health insurance or pay a fine of $2000 per worker each year if any worker receives federal subsidies to purchase health insurance.

• By reducing health care costs for employers, reform will create or save more than 2.5 million jobs over the next decade.

Medicaid

• Medicaid will be expanded to offer health insurance coverage to an additional 16 million low-income people.

• Federal Government will pay 100 percent of costs for covering newly eligible individuals through 2016.

• Medicaid will include childless adults starting in 2014.

Insurance reform

• Health insurance companies will no longer be allowed to deny people coverage because of preexisting conditions—or to drop coverage when people become sick.

• Just like members of Congress, individuals and small businesses who can’t afford to purchase insurance on their own will be able to pool together and choose from a variety of competing plans with lower premiums.

• Instead of losing coverage after they leave home or graduate from college, young adults will be able to remain on their families’ insurance plans until age 26.

• Community health centers would receive an additional $11 billion, doubling the number of patients who can be treated regardless of their insurance or ability to pay.

Illegal immigrants

• Illegal immigrants will not be allowed to buy health Insurance in Exchanges, even if they pay completely with their own pockets.

Abortion

• No health care plan would be required to offer abortion coverage. States could pass legislation choosing to opt out of offering abortion coverage through the exchange.

Individual Mandate:

• In 2014, everyone must purchase health insurance or face a $695 annual fine. There are some exceptions for low-income people.