HOW THE HEALTHCARE BILL WILL IMPACT YOU, YOUR FAMILY & YOUR BUSINESS

Beyond the hype, snipes and myths, what will the landmark measure really do?

By Miriam Raftery

March 22, 2010 (San Diego’s East County) – How will the landmark healthcare bill passed last night by the House of Representatives impact you, your family and your business?  The answers, detailed extensively below, may surprise you.

President Barack Obama is expected to sign the measure in the next couple of days, though the Senate has yet to vote on whether to accept House changes to a version of the bill that the Senate recently passed. While some changes may yet be made, major elements include provisions to take effect immediately, as well as many others that will be phased in over several years. These include:

FIRST YEAR (2010)

 

Insurance companies will be prohibited from dropping people’s coverage when they become ill.

 

Starting immediately, children can no longer be denied insurance because of pre-existing conditions.

 

Adults with pre-existing conditions will be able to obtain coverage through a temporary program that will expire after new insurance exchanges go into operation in 2014.

 

Parents may keep adult children on their policies until age 26, extending coverage for college students and young people seeking work or without coverage through employers.

 

Insurance companies will be banned from capping lifetime benefits and restricted on limiting annual coverage.

 

Health insurers must report annually on the percentage of premiums spent on healthcare and provide rebates for excessive medical loss ratios.

 

All new healthcare plans must cover preventive services.

 

Some small business can receive a tax credit to help provide coverage for workers.

 

A temporary program will also help companies keep health coverage for early retirees (ages 55-64) through 2014.

 

Medicare drug beneficiaries may receive a $250 rebate. Long-term, the bill will close the Medicare “doughnut hole” gap for prescription drug coverage.

 

Exclude certain Indian tribal health benefits from gross income; the provision is effective for benefits and coverage after the bill’s enactment date.

 

Require the nonprofit Blue Cross/Blue Shield to have a medical loss ratio of 85% or higher to take advantage of certain federal tax benefits. The measure appears aimed at preventing gouging of consumers with soaring premium hikes.

 

Expand low-interest student loan programs, scholarships and loan repayments for health students and healthcare professionals to increase the workforce to meet patients’ healthcare needs.

Extends Medicare payment protections for small rural hospitals, including hospital outpatient services, lab services, and facilities that have a low‐volume of Medicare patients, but play important roles in communities.

 

Provide funds to build or expand community health centers and to fund scholarships and loan repayments to encourage more primary care physicians in under-served regions.

 

Require providers to implement enhanced screenings to crack down on fraud and waste.

 

Establish a website where consumers and small businesses in any state can find information on affordable health insurance coverage options, as well as information on small business tax credits and reinsurance for early retirees.

Expand public health programs and public health policies.

 

Set up a nonprofit institute to compare effectiveness of health treatments and outcomes.

 

Tanning parlors will be taxed 10% starting July 1st.

 

Expand adoption credits and assistance.

 

Encourage investment in new therapies to prevent, diagnose, and treat acute and chronic disease.

 

SECOND YEAR (2011)

Bonus payments of 10% will be paid to Medicare primary care physicians and general surgeons.

Medicare patients will be allowed a free annual wellness visit and personalized prevention plan service.

 

Requires coverage of stop-smoking programs for pregnant women.

 

New health plans will be required to cover preventive services free or at low cost.

 

Pharmaceutical companies with sales over $5 million a year must pay an annual fee based on market share.

 

Expands primary care, nursing and public health workforce through changes in the Medicare Graduate Medical Education program.

 

Creates a simple “cafeteria plan” for small businesses to provide tax-free benefits to employees, easing the administrative burden on small busienses.

 

Provides grants for states to set up systems to respond to consumer complaints about health insurance.

 

Starting in October, a new program for the poor under Medicaid will allow states to offer in-home and community-based care for the disabled who might otherwise need to be institutionalized.

 

Payments to insurers offering premium Medicare Advantage services will be frozen at 2010 levels, then gradually reduced to bring them more in line with traditional Medicare.

Employers must disclose the value of health benefits to employees on their W-2 tax forms.

 

THIRD YEAR (2012)

 

Medicare payments to physicians will be reformed to enhance primary care services and encourage doctors to form “accountable care organizations” designed to improve care.

Acute care hospitals will have incentives to improve quality of outcomes for Medicare patients

 

Hospitals will be provided financial incentives to reduce preventable readmissions.

 

FOURTH YEAR (2013)

A national pilot program for Medicare will encourage doctors, hospitals and other providers to improve coordination of patient care

 

The threshold to claim medical expenses on federal income tax returns will rise from 7.5 to 10 percent of income, but will remain at 7.5 percent for senior citizens through 2016.

 

Medicare payroll tax will rise to 2.35 percent from 1.45 percent for individuals who earn over $200,000 and married couples earning over $250,000.

 

Sale of medical devices will be subject to a 2.9 percent excise tax, however devices sold at retail to the public will be excluded from the tax.

 

FIFTH YEAR (2014)

State health insurance exchanges will open for individuals and small businesses to obtain health coverage. People will be able to comparison shop for standardized health packages. The measure aims to assure that people of all incomes can obtain affordable care.

 

Medicaid eligibility will be expanded to include non-elderly people within 133% of the poverty level. States will receive increased federal funding to cover these individuals.

Most Americans will be required to buy health insurance coverage or pay a fine. However people earning up to 400 percent of the poverty rate ($88,000 at present) can receive healthcare tax credits to assist them. Penalties for not having insurance will be $95 for 2014, $325 for 2015, $695 in 2016 (or up to 2.5% of income in 2016). Families will pay half the amount for children, with a maximum cap of $2,250 per family. Individuals will not be penalized if affordable coverage is not available.

Health insurance plans will be prohibited from excluding people with pre-existing conditions.

Employers with 50 or more workers who do not offer coverage may be fined $2,000 for each employee who receives subsidized insurance on the exchange. The first 30 employees aren't counted for the fine, however.

 

Free choice vouchers may be obtained by workers who qualify for an affordability exemption to the individual responsibility policy, but do not qualify for tax credits. Those workers could then take their employer contribution and join an exchange plan.

 

Health insurance companies with net premiums over $25 million will be required to pay a fee based on their market share.

 

Ban insurers from dropping people who participate in clinical trials for cancer or other life-threatening diseases.

 

Ban health insurers from imposing annual limits on coverage amounts that an individual may receive.

 

Prohibit insurers from excluding coverage for pre-existing conditions.

 

Prohibit insurers from discriminating or charging higher rates based on gender, health status, or most other factors.

 

Insurers could vary premiums ONLY based on tobacco use, geography, family size, or age. Seniors could be charged no more than triple the amount of younger consumers.

 

SIXTH YEAR (2015)

 

Medicare will reward physicians with payments that recognize quality of care instead of volume of services.

NINTH YEAR (2018)

High-cost employer-provided plans will be assessed an excise tax. However the first $27,500 of a family plan and $10,200 of individual coverage will be exempted. Retirees and people in high-risk professions will have higher levels set.

KEY CHANGES IN HOUSE BILL VS. SENATE VERSION

 

The Senate must still vote on whether to accept amendments made in the House (and listed above). The package of amendments now goes to the Senate under special reconciliation rules, meaning it is protected against a Filibuster. However the possibility remains that the Senate could fail to approve some amendments.

 

The House version offered the most generous help to low-income people to purchase health insurance (up to 400% of the federal poverty level). The House bill would also close the “doughnut hole” gap in Medicare prescription drug coverage. Democrats in the House also delayed the Senate’s plan to impose a 40% excise tax on the most comprehensive employer-provided policies from 2013 to 2018, arguing that the tax would hurt middle-class families. The House plan aims to cover additional costs instead by increasing Medicare taxes on high-income individuals and by imposing a 3.8% Medicare tax on investment income for high-income families. The House also increased fines for large employers who fail to provide coverage and would require people who don’t purchase insurance to pay at least $695 a year or up to 2.5% of their income.

 

While critics have argued that the bill would increase federal spending, the nonpartisan U.S. Government Accountability Office (GAO) has concluded that the healthcare reform measures will actually reduce the federal deficit substantially.

 

The Senate and House bills combined would reduce the federal budget deficit by $153 billion over the next decade. The House version alone would lower the deficit by $138 billion.

The measure will not provide coverage for abortion.  President Barack Obama pledged to issue a signing statement clarifying that no federal funds will be used for abortion services as part of a last-minute deal to secure votes for passage from anti-choice Democratic legislators.The final House vote was 219-212, with all Republicans voting "no" and 32 Democrats also opposed. 

Among San Diego County's Congressional delegation, Democrats Bob Filner and Susan Davis voted yes, while Republican Congressmen Duncan Hunter, Brian Bilbray and Darrell Issa voted no. Both California Senators Barbara Boxer and Dianne Feinstein voted in favor of the healthcare reform bill's passage.

This article compiled information published by the House Ways & Means Committee, the Government Accountability Office, Reuters, and the Washington Post.