The Affordable Care Act is the current law and the status quo on healthcare, and since healthcare is our current focus here at LAG, we decided to post a summary of the A.C.A. here on our website. The following is from Kaiser Family Foundation.
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Overall Approach to Coverage Expansion: Require most U.S. citizens and legal
residents to have health insurance. Create state-based American Health Benefit
Exchanges through which individuals can purchase coverage, with premium and
cost-sharing credits available to individuals/families with income between 133-
400% of the federal poverty level (the poverty level is $19,530 for a family of
three in 2013) and create separate Exchanges through which small businesses
can purchase coverage. Require employers to pay penalties for employees who
receive tax credits for health insurance through an Exchange, with exceptions
for small employers. Impose new regulations on health plans in the Exchanges
and in the individual and small group markets. Expand Medicaid to 133% of the
federal poverty level.
Personal Mandate: Require U.S. citizens and legal residents to have qualifying
health coverage. Those without coverage pay a tax penalty of the greater of $695
per year up to a maximum of three times that amount ($2,085) per family or
2.5% of household income. The penalty will be phased-in according to the
following schedule: $95 in 2014, $325 in 2015, and $695 in 2016 for the flat fee
or 1.0% of taxable income in 2014, 2.0% of taxable income in 2015, and 2.5%
of taxable income in 2016. Beginning after 2016, the penalty will be increased
annually by the cost-of-living adjustment. Exemptions will be granted for
financial hardship, religious objections, American Indians, those without
coverage for less than three months, undocumented immigrants, incarcerated
individuals, those for whom the lowest cost plan option exceeds 8% of an
individual’s income, and those with incomes below the tax filing threshold (in
2009 the threshold for taxpayers under age 65 was $9,350 for singles and
$18,700 for couples).
Requirement to Offer Coverage: Assess employers with 50 or more full-time
employees that do not offer coverage and have at least one full-time employee
who receives a premium tax credit a fee of $2,000 per full-time employee,
excluding the first 30 employees from the assessment. Employers with 50 or
more full-time employees that offer coverage but have at least one full-time
employee receiving a premium tax credit, will pay the lesser of $3,000 for each
employee receiving a premium credit or $2,000 for each full-time employee,
excluding the first 30 employees from the assessment. Exempt employers with
up to 50 full-time employees from any of the above penalties.
Employer Requirement: Require employers with more than 200 employees to
automatically enroll employees into health insurance plans offered by the
employer. Employees may opt out of coverage.
Medicaid Expansion: Expand Medicaid to all non-Medicare eligible individuals
under age 65 (children, pregnant women, parents, and adults without dependent
children) with incomes up to 133% FPL based on modified adjusted gross
income (as under current law undocumented immigrants are not eligible for
Medicaid). All newly eligible adults will be guaranteed a benchmark benefit
package that meets the essential health benefits available through the
Exchanges. The Supreme Court ruling on the constitutionality of the ACA
upheld the Medicaid expansion, but limited the ability of HHS to enforce it,
thereby making the decision to expand Medicaid optional for states. To finance
the coverage for the newly eligible (those who were not previously eligible for
at least benchmark equivalent coverage, those who were eligible for a capped
program but were not enrolled, or those who were enrolled in state-funded
programs), states will receive 100% federal funding for 2014 through 2016, 95%
federal financing in 2017, 94% federal financing in 2018, 93% federal financing
in 2019, and 90% federal financing for 2020 and subsequent years. States that
have already expanded eligibility to adults with incomes up to 100% FPL will
receive a phased-in increase in the federal medical assistance percentage
(FMAP) for non-pregnant childless adults so that by 2019 they receive the same
federal financing as other states (93% in 2019 and 90% in 2020 and later). States
have the option to expand Medicaid eligibility to childless adults beginning on
April 1, 2010, but will receive their regular FMAP until 2014. In addition,
increase Medicaid payments in fee-for-service and managed care for primary
care services provided by primary care doctors (family medicine, general
internal medicine or pediatric medicine) to 100% of the Medicare payment rates
for 2013 and 2014. States will receive 100% federal financing for the increased
payment rates.
CHIP Requirements: Require states to maintain current income eligibility levels
for children in Medicaid and the Children’s Health Insurance Program (CHIP)
until 2019 and extend funding for CHIP through 2015. CHIP benefit package
and cost-sharing rules will continue as under current law. Provide states with the
option to provide CHIP coverage to children of state employees who are eligible
for health benefits if certain conditions are met. Beginning in 2015, states will
receive a 23 percentage point increase in the CHIP match rate up to a cap of
100%. CHIP-eligible children who are unable to enroll in the program due to
enrollment caps will be eligible for tax credits in the state Exchanges.
Eligibility: Limit availability of premium credits and cost-sharing subsidies
through the Exchanges to U.S. citizens and legal immigrants who meet income
limits. Employees who are offered coverage by an employer are not eligible for
premium credits unless the employer plan does not have an actuarial value of at
least 60% or if the employee share of the premium exceeds 9.5% of income.
Legal immigrants who are barred from enrolling in Medicaid during their first
five years in the U.S. will be eligible for premium credits.
Premium Credits: Provide refundable and advanceable premium credits to
eligible individuals and families with incomes between 100-400% FPL to
purchase insurance through the Exchanges. The premium credits will be tied to
the second lowest cost silver plan in the area and will be set on a sliding scale
such that the premium contributions are limited to the following percentages of
income for specified income levels:
Up to 133% FPL: 2% of income
133-150% FPL: 3 – 4% of income
150-200% FPL: 4 – 6.3% of income
200-250% FPL: 6.3 – 8.05% of income
250-300% FPL: 8.05 – 9.5% of income
300-400% FPL: 9.5% of income.
Increase the premium contributions for those receiving subsidies annually to
reflect the excess of the premium growth over the rate of income growth for
2014-2018. Beginning in 2019, further adjust the premium contributions to
reflect the excess of premium growth over CPI if aggregate premiums and cost
sharing subsidies exceed .504% of GDP.
Provisions related to the premium and cost-sharing subsidies are effective
January 1, 2014.
Cost Sharing: Provide cost-sharing subsidies to eligible individuals and families.
The cost-sharing credits reduce the cost-sharing amounts and annual costsharing
limits and have the effect of increasing the actuarial value of the basic
benefit plan to the following percentages of the full value of the plan for the
specified income level:
100-150% FPL: 94%
150-200% FPL: 87%
200-250% FPL: 73%
250-400% FPL: 70%
Verification: Require verification of both income and citizenship status in
determining eligibility for the federal premium credits.
Abortion Coverage: Ensure that federal premium or cost-sharing subsidies are
not used to purchase coverage for abortion if coverage extends beyond saving
the life of the woman or cases of rape or incest (Hyde amendment). If an
individual who receives federal assistance purchases coverage in a plan that
chooses to cover abortion services beyond those for which federal funds are
permitted, those federal subsidy funds (for premiums or cost-sharing) must not
be used for the purchase of the abortion coverage and must be segregated from
private premium payments or state funds.
Small Business Tax Credit: Provide small employers with no more than 25
employees and average annual wages of less than $50,000 that purchase health
insurance for employees with a tax credit.
Phase I: For tax years 2010 through 2013, provide a tax credit of up to 35% of
the employer’s contribution toward the employee’s health insurance premium if
the employer contributes at least 50% of the total premium cost or 50% of a
benchmark premium. The full credit will be available to employers with 10 or
fewer employees and average annual wages of less than $25,000. The credit
phases-out as firm size and average wage increases. Tax-exempt small
businesses meeting these requirements are eligible for tax credits of up to 25%
of the employer’s contribution toward the employee’s health insurance
premium.
Phase II: For tax years 2014 and later, for eligible small businesses that purchase
coverage through the state Exchange, provide a tax credit of up to 50% of the
employer’s contribution toward the employee’s health insurance premium if the
employer contributes at least 50% of the total premium cost. The credit will be
available for two years. The full credit will be available to employers with 10 or
fewer employees and average annual wages of less than $25,000. The credit
phases-out as firm size and average wage increases. Tax-exempt small
businesses meeting these requirements are eligible for tax credits of up to 35%
of the employer’s contribution toward the employee’s health insurance
premium.
Reinsurance: Create a temporary reinsurance program for employers providing
health insurance coverage to retirees over age 55 who are not eligible for
Medicare. Program will reimburse employers or insurers for 80% of retiree
claims between $15,000 and $90,000. Payments from the reinsurance program
will be used to lower the costs for enrollees in the employer plan. Appropriate
$5 billion to finance the program.
Tax Changes – Health Insurance: Impose a tax on individuals without qualifying
coverage of the greater of $695 per year up to a maximum of three times that
amount or 2.5% of household income to be phased-in beginning in 2014.
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 on
a tax-free basis through an HSA or Archer Medical Savings Account.
Increase the tax on distributions from a health savings account or an Archer
MSA that are not used for qualified medical expenses to 20% (from 10% for
HSAs and from 15% for Archer MSAs) of the disbursed amount.
Limit the amount of contributions to a flexible spending account for medical
expenses to $2,500 per year increased annually by the cost of living adjustment.
Increase the threshold for the itemized deduction for unreimbursed medical
expenses from 7.5% of adjusted gross income to 10% of adjusted gross income
for regular tax purposes; waive the increase for individuals age 65 and older for
tax years 2013 through 2016.
Increase the Medicare Part A (hospital insurance) tax rate on wages by 0.9%
(from 1.45% to 2.35%) on earnings over $200,000 for individual taxpayers and
$250,000 for married couples filing jointly and impose a 3.8% tax on unearned
income for higher-income taxpayers (thresholds are not indexed).
Impose an excise tax on insurers of employer-sponsored health plans with
aggregate values that exceed $10,200 for individual coverage and $27,500 for
family coverage (these threshold values will be indexed to the consumer price
index for urban consumers (CPI-U) for years beginning in 2020). The threshold
amounts will be increased for retired individuals age 55 and older who are not
eligible for Medicare and for employees engaged in high-risk professions by
$1,650 for individual coverage and $3,450 for family coverage. The threshold
amounts may be adjusted upwards if health care costs rise more than expected
prior to implementation of the tax in 2018. The threshold amounts will be
increased for firms that may have higher health care costs because of the age or
gender of their workers. The tax is equal to 40% of the value of the plan that
exceeds the threshold amounts and is imposed on the issuer of the health
insurance policy, which in the case of a self-insured plan is the plan
administrator or, in some cases, the employer. The aggregate value of the health
insurance plan includes reimbursements under a flexible spending account for
medical expenses (health FSA) or health reimbursement arrangement (HRA),
employer contributions to a health savings account (HSA), and coverage for
supplementary health insurance coverage, excluding dental and vision coverage.
Eliminate the tax deduction for employers who receive Medicare Part D retiree
drug subsidy payments.
Tax Changes – Financing Reform: Impose new annual fees on the
pharmaceutical manufacturing sector, according to the following schedule:
$2.8 billion in 2012-2013;$3.0 billion in 2014-2016;
$4.0 billion in 2017;
$4.1 billion in 2018; and
2.8 billion in 2019 and later.
Impose an annual fee on the health insurance sector, according to the following
schedule:
$8 billion in 2014;
$11.3 billion in 2015-2016;
$13.9 billion in 2017;
$14.3 billion in 2018
For subsequent years, the fee shall be the amount from the previous year
increased by the rate of premium growth.
For non-profit insurers, only 50% of net premiums are taken into account in
calculating the fee. Exemptions granted for non-profit plans that receive more
than 80% of their income from government programs targeting low-income or
elderly populations, or people with disabilities, and voluntary employees’
beneficiary associations (VEBAs) not established by an employer.
Impose an excise tax of 2.3% on the sale of any taxable medical device.
Limit the deductibility of executive and employee compensation to $500,000 per
applicable individual for health insurance providers.
Impose a tax of 10% on the amount paid for indoor tanning services.
Exclude unprocessed fuels from the definition of cellulosic biofuel for purposes
of applying the cellulosic biofuel producer credit.
Clarify application of the economic substance doctrine and increase penalties for
underpayments attributable to a transaction lacking economic substance.
Health Insurance Exchanges: Create state-based American Health Benefit
Exchanges and Small Business Health Options Program (SHOP) Exchanges,
administered by a governmental agency or non-profit organization, through
which individuals and small businesses with up to 100 employees can purchase
qualified coverage. Permit states to allow businesses with more than 100
employees to purchase coverage in the SHOP Exchange beginning in 2017.
States may form regional Exchanges or allow more than one Exchange to
operate in a state as long as each Exchange serves a distinct geographic area.
Purchase Eligibility: Restrict access to coverage through the Exchanges to U.S.
citizens and legal immigrants who are not incarcerated.
Multi-State Plans: Require the Office of Personnel Management to contract with
insurers to offer at least two multi-state plans in each Exchange. At least one
plan must be offered by a non-profit entity and at least one plan must not
provide coverage for abortions beyond those permitted by federal law. Each
multi-state plan must be licensed in each state and must meet the qualifications
of a qualified health plan. If a state has lower age rating requirements than 3:1,
the state may require multi-state plans to meet the more protective age rating
rules. These multi-state plans will be offered separately from the Federal
Employees Health Benefit Program and will have a separate risk pool.
CO-OP: Create the Consumer Operated and Oriented Plan (CO-OP) program to
foster the creation of non-profit, member-run health insurance companies in all
50 states and District of Columbia to offer qualified health plans. To be eligible
to receive funds, an organization must not be an existing health insurer or
sponsored by a state or local government, substantially all of its activities must
consist of the issuance of qualified health benefit plans in each state in which it
is licensed, governance of the organization must be subject to a majority vote of
its members, must operate with a strong consumer focus, and any profits must
be used to lower premiums, improve benefits, or improve the quality of health
care delivered to its members. (Appropriate $4.8 billion to finance the program
and award loans and grants to establish CO-OPs by July 1, 2013)
Benefit Tiers: Create four benefit categories of plans plus a separate catastrophic
plan to be offered through the Exchange, and in the individual and small group
markets:
Bronze plan represents minimum creditable coverage and provides the essential
health benefits, cover 60% of the benefit costs of the plan, with an out-of-pocket
limit equal to the Health Savings Account (HSA) current law limit ($5,950 for
individuals and $11,900 for families in 2010);
Silver plan provides the essential health benefits, covers 70% of the benefit costs
of the plan, with the HSA out-of-pocket limits;
Gold plan provides the essential health benefits, covers 80% of the benefit costs
of the plan, with the HSA out-of-pocket limits;
Platinum plan provides the essential health benefits, covers 90% of the benefit
costs of the plan, with the HSA out-of-pocket limits;
Catastrophic plan available to those up to age 30 or to those who are exempt
from the mandate to purchase coverage and provides catastrophic coverage only
with the coverage level set at the HSA current law levels except that prevention
benefits and coverage for three primary care visits would be exempt from the
deductible. This plan is only available in the individual market.
Reduce the out-of-pocket limits for those with incomes up to 400% FPL to the
following levels:
100-200% FPL: one-third of the HSA limits ($1,983/individual and
$3,967/family);
200-300% FPL: one-half of the HSA limits ($2,975/individual and
$5,950/family);
300-400% FPL: two-thirds of the HSA limits ($3,987/individual and
$7,973/family).
These out-of-pocket reductions are applied within the actuarial limits of the plan
and will not increase the actuarial value of the plan.
Market Rules: Require guarantee issue and renewability and allow rating
variation based only on age (limited to 3 to 1 ratio), premium rating area, family
composition, and tobacco use (limited to 1.5. to 1 ratio) in the individual and the
small group market and the Exchange.
Require risk adjustment in the individual and small group markets and in the
Exchange.
Heath Plan Qualification: Require qualified health plans participating in the
Exchange to meet marketing requirements, have adequate provider networks,
contract with essential community providers, contract with navigators to conduct
outreach and enrollment assistance, be accredited with respect to performance
on quality measures, use a uniform enrollment form and standard format to
present plan information.
Require qualified health plans to report information on claims payment policies,
enrollment, disenrollment, number of claims denied, cost-sharing requirements,
out-of-network policies, and enrollee rights in plain language.
Exchange Requirements: Require the Exchanges to maintain a call center for
customer service, and establish procedures for enrolling individuals and
businesses and for determining eligibility for tax credits. Require states to
develop a single form for applying for state health subsidy programs that can be
filed online, in person, by mail or by phone. Permit Exchanges to contract with
state Medicaid agencies to determine eligibility for tax credits in the Exchanges.
Require Exchanges to submit financial reports to the Secretary and comply with
oversight investigations including a GAO study on the operation and
administration of Exchanges.
Abortion Coverage: Permit states to prohibit plans participating in the Exchange
from providing coverage for abortions.
Require plans that choose to offer coverage for abortions beyond those for
which federal funds are permitted (to save the life of the woman and in cases of
rape or incest) in states that allow such coverage to create allocation accounts
for segregating premium payments for coverage of abortion services from
premium payments for coverage for all other services to ensure that no federal
premium or cost-sharing subsidies are used to pay for the abortion coverage.
Plans must also estimate the actuarial value of covering abortions by taking into
account the cost of the abortion benefit (valued at no less than $1 per enrollee
per month) and cannot take into account any savings that might be reaped as a
result of the abortions. Prohibit plans participating in the Exchanges from
discriminating against any provider because of an unwillingness to provide, pay
for, provide coverage of, or refer for abortions.
Essential Coverage: Create an essential health benefits package that provides a
comprehensive set of services, covers at least 60% of the actuarial value of the
covered benefits, limits annual cost-sharing to the current law HSA limits
($5,950/individual and $11,900/family in 2010), and is not more extensive than
the typical employer plan. Require the Secretary to define and annually update
the benefit package through a transparent and public process.
Require all qualified health benefits plans, including those offered through the
Exchanges and those offered in the individual and small group markets outside
the Exchanges, except grandfathered individual and employer-sponsored plans,
to offer at least the essential health benefits package.
Prohibit abortion coverage from being required as part of the essential health
benefits package.
Temporary High-Risk Pool: Establish a temporary national high-risk pool to
provide health coverage to individuals with pre-existing medical conditions.
U.S. citizens and legal immigrants who have a pre-existing medical condition
and who have been uninsured for at least six months will be eligible to enroll in
the high-risk pool and receive subsidized premiums. Premiums for the pool will
be established for a standard population and may vary by no more than 4 to 1
due to age; maximum cost-sharing will be limited to the current law HSA limit
($5,950/individual and $11,900/family in 2010). Appropriate $5 billion to
finance the program.
Medicaid Loss Ratio and Premium Rate Review: 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 plans in the large group
market and 80% for plans in the individual and small group markets.
Establish a process for reviewing increases in health plan premiums and require
plans to justify increases. Require states to report on trends in premium
increases and recommend whether certain plan should be excluded from the
Exchange based on unjustified premium increases. Provide grants to states to
support efforts to review and approve premium increases.
Administrative Simplification: Adopt standards for financial and administrative
transactions to promote administrative simplification.
Dependent Coverage: Provide dependent coverage for children up to age 26 for
all individual and group policies. (
Insurance Market Rules: Prohibit individual and group health plans from placing
lifetime limits on the dollar value of coverage and prohibit insurers from
rescinding coverage except in cases of fraud. Prohibit pre-existing condition
exclusions for children. Beginning in January 2014, prohibit individual and
group health plans from placing annual limits on the dollar value of coverage.
Prior to January 2014, plans may only impose annual limits on coverage as
determined by the Secretary.
Grandfather existing individual and group plans with respect to new benefit
standards, but require these grandfathered plans to extend dependent coverage to
adult children up to age 26 and prohibit rescissions of coverage. Require
grandfathered group plans to eliminate lifetime limits on coverage and
beginning in 2014, eliminate annual limits on coverage. Prior to 2014,
grandfathered group plans may only impose annual limits as determined by the
Secretary. Require grandfathered group plans to eliminate pre-existing condition
exclusions for children within six months of enactment and by 2014 for adults,
and eliminate waiting periods for coverage of greater than 90 days by 2014.
Impose the same insurance market regulations relating to guarantee issue,
premium rating, and prohibitions on pre-existing condition exclusions in the
individual market, in the Exchange, and in the small group market. (See new
rating and market rules in Creation of insurance pooling mechanism.)
Require all new policies (except stand-alone dental, vision, and long-term care
insurance plans), including those offered through the Exchanges and those
offered outside of the Exchanges, to comply with one of the four benefit
categories. Existing individual and employer-sponsored plans do not have to
meet the new benefit standards. (See description of benefit categories in
Creation of insurance pooling mechanism.)
Limit deductibles for health plans in the small group market to $2,000 for
individuals and $4,000 for families unless contributions are offered that offset
deductible amounts above these limits. This deductible limit will not affect the
actuarial value of any plans.
Limit any waiting periods for coverage to 90 days.
Create a temporary reinsurance program to collect payments from health
insurers in the individual and group markets to provide payments to plans in the
individual market that cover high-risk individuals. Finance the reinsurance
program through mandatory contributions by health insurers totaling $25 billion
over three years.
Allow states the option of merging the individual and small group markets.
Consumer Protection: Establish an internet website to help residents identify
health coverage options and develop a standard format for presenting
information on coverage options.
Develop standards for insurers to use in providing information on benefits and
coverage. (Standards developed within 12 months following enactment; insurer
must comply with standards within 24 months following enactment)
Choice Compacts and National Plans: Permit states to form health care choice
compacts and allow insurers to sell policies in any state participating in the
compact. Insurers selling policies through a compact would only be subject
to the laws and regulations of the state where the policy is written or issued,
except for rules pertaining to market conduct, unfair trade practices, network
adequacy, and consumer protections. Compacts may only be approved if it is
determined that the compact will provide coverage that is at least as
comprehensive and affordable as coverage provided through the state
Exchanges. (Regulations issued by July 1, 2013, compacts may not take effect
before January 1, 2016)
Health Insurance Administration: Establish the Health Insurance Reform
Implementation Fund within the Department of Health and Human Services and
allocate $1 billion to implement health reform policies.
State Role: Create an American Health Benefit Exchange and a Small Business
Health Options Program (SHOP) Exchange for individuals and small businesses
and provide oversight of health plans with regard to the new insurance market
regulations, consumer protections, rate reviews, solvency, reserve fund
requirements, premium taxes, and to define rating areas.
Enroll newly eligible Medicaid beneficiaries into the Medicaid program no later
than January 2014 (states have the option to expand enrollment beginning in
2011), coordinate enrollment with the new Exchanges, and implement other
specified changes to the Medicaid program. Maintain current Medicaid and
CHIP eligibility levels for children until 2019 and maintain current Medicaid
eligibility levels for adults until the Exchange is fully operational. A state will be
exempt from the maintenance of effort requirement for non-disabled adults with
incomes above 133% FPL for any year from January 2011 through December
31, 2013 if the state certifies that it is experiencing a budget deficit or will
experience a deficit in the following year.
Establish an office of health insurance consumer assistance or an ombudsman
program to serve as an advocate for people with private coverage in the
individual and small group markets. (Federal grants available beginning fiscal
year 2010)
Permit states to create a Basic Health Plan for uninsured individuals with
incomes between 133% and 200% FPL in lieu of these individuals receiving
premium subsidies to purchase coverage in the Exchanges. Permit states to
obtain a five-year waiver of certain new health insurance requirements if the
state can demonstrate that it provides health coverage to all residents that is at
least as comprehensive as the coverage required under an Exchange plan and
that the state plan does not increase the federal budget deficit.
Administrative Simplification: Simplify health insurance administration by
adopting a single set of operating rules for eligibility verification and claims
status, electronic funds transfers and health care payment and remittance, and
health claims or equivalent encounter information, enrollment and disenrollment
in a health plan, health plan premium payments, and referral certification and
authorization. Health plans must document compliance with these standards or
face a penalty of no more than $1 per covered life.
Medicare: Restructure payments to Medicare Advantage (MA) plans by setting
payments to different percentages of Medicare fee-for-service (FFS) rates, with
higher payments for areas with low FFS rates and lower payments (95% of FFS)
for areas with high FFS rates. Phase-in revised payments over 3 years beginning
in 2011, for plans in most areas, with payments phased-in over longer periods (4
years and 6 years) for plans in other areas. Provide bonuses to plans receiving 4
or more stars, based on the current 5-star quality rating system for Medicare
Advantage plans, beginning in 2012; qualifying plans in qualifying areas receive
double bonuses. Modify rebate system with rebates allocated based on a plan’s
quality rating. Phase-in adjustments to plan payments for coding practices
related to the health status of enrollees, with adjustments equaling 5.7% by
2019. Cap total payments, including bonuses, at current payment levels.
Require Medicare Advantage plans to remit partial payments to the Secretary if
the plan has a medical loss ratio of less than 85%, beginning 2014. Require the
Secretary to suspend plan enrollment for 3 years if the medical loss ratio is less
than 85% for 2 consecutive years and to terminate the plan contract if the
medical loss ratio is less than 85% for 5 consecutive years.
Reduce annual market basket updates for inpatient hospital, home health, skilled
nursing facility, hospice, and other Medicare providers, and adjust for
productivity.
Freeze the threshold for income-related Medicare Part B premiums for 2011
through 2019, and reduce the Medicare Part D premium subsidy for those with
incomes above $85,000/individual and $170,000/ couple.
Establish an Independent Payment Advisory Board comprised of 15 members to
submit legislative proposals containing recommendations to reduce the per
capita rate of growth in Medicare spending if spending exceeds a target growth
rate. Beginning April 2013, require the Chief Actuary of CMS to project
whether Medicare per capita spending exceeds the average of CPI-U and CPIM,
based on a five year period ending that year. If so, beginning January 15,
2014, the Board will submit recommendations to achieve reductions in Medicare
spending. Beginning January 2018, the target is modified such that the board
submits recommendations if Medicare per capita spending exceeds GDP per
capita plus one percent. The Board will submit proposals to the President and
Congress for immediate consideration. The Board is prohibited from submitting
proposals that would ration care, increase revenues or change benefits, eligibility
or Medicare beneficiary cost sharing (including Parts A and B premiums), or
would result in a change in the beneficiary premium percentage or low-income
subsidies under Part D. Hospitals and hospices (through 2019) and clinical labs
(for one year) will not be subject to cost reductions proposed by the Board. The
Board must also submit recommendations every other year to slow the growth in
national health expenditures while preserving quality of care by January 1, 2015.
Reduce Medicare Disproportionate Share Hospital (DSH) payments initially by
75% and subsequently increase payments based on the percent of the population
uninsured and the amount of uncompensated care provided.
Eliminate the Medicare Improvement Fund.
Allow providers organized as accountable care organizations (ACOs) that
voluntarily meet quality thresholds to share in the cost savings they achieve for
the Medicare program. To qualify as an ACO, organizations must agree to be
accountable for the overall care of their Medicare beneficiaries, have adequate
participation of primary care physicians, define processes to promote evidencebased
medicine, report on quality and costs, and coordinate care.
Create an Innovation Center within the Centers for Medicare and Medicaid
Services to test, evaluate, and expand in Medicare, Medicaid, and CHIP
different payment structures and methodologies to reduce program expenditures
while maintaining or improving quality of care. Payment reform models that
improve quality and reduce the rate of cost growth could be expanded
throughout the Medicare, Medicaid, and CHIP programs.
Reduce Medicare payments that would otherwise be made to hospitals by
specified percentages to account for excess (preventable) hospital readmissions.
Reduce Medicare payments to certain hospitals for hospital-acquired conditions
by 1%.
Medicaid: Increase the Medicaid drug rebate percentage for brand name drugs to
23.1 (except the rebate for clotting factors and drugs approved exclusively for
pediatric use increases to 17.1%); increase the Medicaid rebate for noninnovator,
multiple source drugs to 13% of average manufacturer price. Extend
the drug rebate to Medicaid managed care plans.
Reduce aggregate Medicaid DSH allotments by $.5 billion in 2014, $.6 billion in
2015, $.6 billion in 2016, $1.8 billion in 2017, $5 billion in 2018, $5.6 billion in
2019, and $4 billion in 2020. Require the Secretary to develop a methodology to
distribute the DSH reductions in a manner that imposes the largest reduction in
DSH allotments for states with the lowest percentage of uninsured or those that
do not target DSH payments, imposes smaller reductions for low-DSH states,
and accounts for DSH allotments used for 1115 waivers.
Prohibit federal payments to states for Medicaid services related to health care
acquired conditions.
Prescription Drugs: Authorize the Food and Drug Administration to approve
generic versions of biologic drugs and grant biologics manufacturers 12 years of
exclusive use before generics can be developed.
Waste, Fraud and Abuse: Reduce waste, fraud, and abuse in public programs by
allowing provider screening, enhanced oversight periods for new providers and
suppliers, including a 90-day period of enhanced oversight for initial claims of
DME suppliers, and enrollment moratoria in areas identified as being at elevated
risk of fraud in all public programs, and by requiring Medicare and Medicaid
program providers and suppliers to establish compliance programs. Develop a
database to capture and share data across federal and state programs, increase
penalties for submitting false claims, strengthen standards for community mental
health centers and increase funding for anti-fraud activities. (
Comparative Effectiveness Research: Support comparative effectiveness
research by establishing a non-profit Patient-Centered Outcomes Research
Institute to identify research priorities and conduct research that compares the
clinical effectiveness of medical treatments. The Institute will be overseen by an
appointed multi-stakeholder Board of Governors and will be assisted by expert
advisory panels. Findings from comparative effectiveness research may not be
construed as mandates, guidelines, or recommendations for payment, coverage,
or treatment or used to deny coverage. (Funding available beginning fiscal year
2010) Terminate the Federal Coordinating Council for Comparative
Effectiveness Research that was founded under the American Recovery and
Reinvestment Act.
Medical Malpractice: Award five-year demonstration grants to states to develop,
implement, and evaluate alternatives to current tort litigations. Preference will
be given to states that have developed alternatives in consultation with relevant
stakeholders and that have proposals that are likely to enhance patient safety by
reducing medical errors and adverse events and are likely to improve access to
liability insurance.
Medicare Improvement: Establish a national Medicare pilot program to develop
and evaluate paying a bundled payment for acute, inpatient hospital services,
physician services, outpatient hospital services, and post-acute care services for
an episode of care that begins three days prior to a hospitalization and spans 30
days following discharge. If the pilot program achieves stated goals of
improving or not reducing quality and reducing spending, develop a plan for
expanding the pilot program. (Establish pilot program by January 1, 2013;
expand program, if appropriate, by January 1, 2016)
Create the Independence at Home demonstration program to provide high-need
Medicare beneficiaries with primary care services in their home and allow
participating teams of health professionals to share in any savings if they reduce
preventable hospitalizations, prevent hospital readmissions, improve health
outcomes, improve the efficiency of care, reduce the cost of health care services,
and achieve patient satisfaction.
Establish a hospital value-based purchasing program in Medicare to pay
hospitals based on performance on quality measures and extend the Medicare
physician quality reporting initiative beyond 2010. Develop plans to implement
value-based purchasing programs for skilled nursing facilities, home health
agencies, and ambulatory surgical centers.
Dual Eligibles: Improve care coordination for dual eligibles by creating a new
office within the Centers for Medicare and Medicaid services, the Federal
Coordinated Health Care Office, to more effectively integrate Medicare and
Medicaid benefits and improve coordination between the federal government
and states in order to improve access to and quality of care and services for dual
eligibles.
Medicaid Improvement: Create a new Medicaid state plan option to permit
Medicaid enrollees with at least two chronic conditions, one condition and risk
of developing another, or at least one serious and persistent mental health
condition to designate a provider as a health home. Provide states taking up the
option with 90% FMAP for two years for home health-related services,
including care management, care coordination, and health promotion.
Create new demonstration projects in Medicaid to pay bundled payments for
episodes of care that include hospitalizations; to make global capitated payments
to safety net hospital systems; to allow pediatric medical providers organized as
accountable care organizations to share in cost-savings; and to provide Medicaid
payments to institutions of mental disease for adult enrollees who require
stabilization of an emergency condition.
Expand the role of the Medicaid and CHIP Payment and Access Commission to
include assessments of adult services (including those dually eligible for
Medicare and Medicaid).
Primary Care: Increase Medicaid payments in fee-for-service and managed care
for primary care services provided by primary care doctors (family medicine,
general internal medicine or pediatric medicine) to 100% of the Medicare
payment rates for 2013 and 2014. States will receive 100% federal financing for
the increased payment rates.
Provide a 10% bonus payment to primary care physicians in Medicare from
2011 through 2015.
National Quality Improvement: Develop a national quality improvement
strategy that includes priorities to improve the delivery of health care services,
patient health outcomes, and population health. Create processes for the
development of quality measures involving input from multiple stakeholders and
for selecting quality measures to be used in reporting to and payment under
federal health programs.
Establish the Community-based Collaborative Care Network Program to support
consortiums of health care providers to coordinate and integrate health care
services, for low-income uninsured and underinsured populations.
Financial Disclosure: Require disclosure of financial relationships between
health entities, including physicians, hospitals, pharmacists, other providers, and
manufacturers and distributors of covered drugs, devices, biologicals, and
medical supplies.
Disparities: Require enhanced collection and reporting of data on race, ethnicity,
sex, primary language, disability status, and for underserved rural and frontier
populations. Also require collection of access and treatment data for people with
disabilities. Require the Secretary to analyze the data to monitor trends in
disparities.
Establish the National Prevention, Health Promotion and Public Health Council
to coordinate federal prevention, wellness, and public health activities. Develop
a national strategy to improve the nation’s health. (Strategy due one year
following enactment) Create a Prevention and Public Health Fund to expand and
sustain funding for prevention and public health programs. Create task forces on
Preventive Services and Community Preventive Services to develop, update, and
disseminate evidenced-based recommendations on the use of clinical and
community prevention services.
National Prevention Strategy: Establish a Prevention and Public Health Fund for
prevention, wellness, and public health activities including prevention research
and health screenings, the Education and Outreach Campaign for preventive
benefits, and immunization programs. Appropriate $7 billion in funding for
fiscal years 2010 through 2015 and $2 billion for each fiscal year after 2015.
Establish a grant program to support the delivery of evidence-based and
community-based prevention and wellness services aimed at strengthening
prevention activities, reducing chronic disease rates and addressing health
disparities, especially in rural and frontier areas.
Preventive Service Coverage: Eliminate cost-sharing for Medicare covered
preventive services that are recommended (rated A or B) by the U.S. Preventive
Services Task Force and waive the Medicare deductible for colorectal cancer
screening tests. Authorize the Secretary to modify or eliminate Medicare
coverage of preventive services, based on recommendations of the U.S.
Preventive Services Task Force.
Provide states that offer Medicaid coverage of and remove cost-sharing for
preventive services recommended (rated A or B) by the U.S. Preventive
Services Task Force and recommended immunizations with a one percentage
point increase in the federal medical assistance percentage (FMAP) for these
services.
Authorize Medicare coverage of personalized prevention plan services,
including a comprehensive health risk assessment, annually. Require the
Secretary to publish guidelines for the health risk assessment no later than
March 23, 2011, and a health risk assessment model by no later than September
29, 2011. Reimburse providers 100% of the physician fee schedule amount with
no adjustment for deductible or coinsurance for personalized prevention plan
services when these services are provided in an outpatient setting.
Provide incentives to Medicare and Medicaid beneficiaries to complete behavior
modification programs. Require Medicaid coverage for tobacco cessation
services for pregnant women.
Require qualified health plans to provide at a minimum coverage without costsharing
for preventive services rated A or B by the U.S. Preventive Services
Task Force, recommended immunizations, preventive care for infants, children,
and adolescents, and additional preventive care and screenings for women.
Wellness Programs: Provide grants for up to five years to small employers that
establish wellness programs.
Provide technical assistance and other resources to evaluate employer-based
wellness programs. Conduct a national worksite health policies and programs
survey to assess employer-based health policies and programs.
Permit employers to offer employees rewards—in the form of premium
discounts, waivers of cost-sharing requirements, or benefits that would
otherwise not be provided—of up to 30% of the cost of coverage for
participating in a wellness program and meeting certain health-related standards.
Employers must offer an alternative standard for individuals for whom it is
unreasonably difficult or inadvisable to meet the standard. The reward limit may
be increased to 50% of the cost of coverage if deemed appropriate. Establish 10-
state pilot programs by July 2014 to permit participating states to apply similar
rewards for participating in wellness programs in the individual market and
expand demonstrations in 2017 if effective. Require a report on the effectiveness
and impact of wellness programs.
Nutritional Information: Require chain restaurants and food sold from vending
machines to disclose the nutritional content of each item.
CLASS Act: Establish a national, voluntary insurance program for purchasing
community living assistance services and supports (CLASS program).
Following a five-year vesting period, the program will provide individuals with
functional limitations a cash benefit of not less than an average of $50 per day to
purchase non-medical services and supports necessary to maintain community
residence. The program is financed through voluntary payroll deductions: all
working adults will be automatically enrolled in the program, unless they choose
to opt-out. This provision was repealed by the American Taxpayer Relief Act of
2012.
Medicaid – Long Term: Extend the Medicaid Money Follows the Person
Rebalancing Demonstration program through September 2016 and allocate $10
million per year for five years to continue the Aging and Disability Resource
Center initiatives.
Provide states with new options for offering home and community-based
services through a Medicaid state plan rather than through a waiver for
individuals with incomes up to 300% of the maximum SSI payment and who
have a higher level of need and permit states to extend full Medicaid benefits to
individual receiving home and community-based services under a state plan.
Establish the Community First Choice Option in Medicaid to provide
community-based attendant supports and services to individuals with disabilities
who require an institutional level of care. Provide states with an enhanced
federal matching rate of an additional six percentage points for reimbursable
expenses in the program.
Create the State Balancing Incentive Program to provide enhanced federal
matching payments to eligible states to increase the proportion of noninstitutionally-
based long-term care services. Selected states will be eligible for
FMAP increases for medical assistance expenditures for noninstitutionally-
based long-term services and supports.
Skilled nursing Requirements: Require skilled nursing facilities under Medicare
and nursing facilities under Medicaid to disclose information regarding
ownership, accountability requirements, and expenditures. Publish standardized
information on nursing facilities to a website so Medicare enrollees can compare
the facilities.
Medicare Investments: Make improvements to the Medicare program:
Provide a $250 rebate to Medicare beneficiaries who reach the Part D coverage
gap in 2010;
Phase down gradually the beneficiary coinsurance rate in the Medicare Part D
coverage gap from 100% to 25% by 2020:
For brand-name drugs, require pharmaceutical manufacturers to provide a 50%
discount on prescriptions filled in the Medicare Part D coverage gap beginning
in 2011, in addition to federal subsidies of 25% of the brand-name drug cost by
2020.
For generic drugs, provide federal subsidies of 75% of the generic drug cost by
2020 for prescriptions filled in the Medicare Part D coverage gap (phased in
beginning in 2011);
Between 2014 and 2019, reduce the out-of-pocket amount that qualifies an
enrollee for catastrophic coverage;
Make Part D cost-sharing for full-benefit dual eligible beneficiaries receiving
home and community-based care services equal to the cost-sharing for those
who receive institutional care;
Expand Medicare coverage to individuals who have been exposed to
environmental health hazards from living in an area subject to an emergency
declaration made as of June 17, 2009 and have developed certain health
conditions as a result;
Provide a 10% bonus payment to primary care physicians and to general
surgeons practicing in health professional shortage areas, from 2011 through
2015; and
Provide payments totaling $400 million in fiscal years 2011 and 2012 to
qualifying hospitals in counties with the lowest quartile Medicare spending; and
Prohibit Medicare Advantage plans from imposing higher cost-sharing
requirements for some Medicare covered benefits than is required under the
traditional fee-for-service program.
Workforce Investments: Improve workforce training and development:
Establish a multi-stakeholder Workforce Advisory Committee to develop a
national workforce strategy.
Increase the number of Graduate Medical Education (GME) training positions
by redistributing currently unused slots, with priorities given to primary care and
general surgery and to states with the lowest resident physician-to-population
ratios; increase flexibility in laws and regulations that govern GME funding to
promote training in outpatient settings; and ensure the availability of residency
programs in rural and underserved areas. Establish Teaching Health Centers,
defined as community-based, ambulatory patient care centers, including
federally qualified health centers and other federally-funded health centers that
are eligible for payments for the expenses associated with operating primary
care residency programs.
Increase workforce supply and support training of health professionals through
scholarships and loans; support primary care training and capacity building;
provide state grants to providers in medically underserved areas; train and
recruit providers to serve in rural areas; establish a public health workforce loan
repayment program; provide medical residents with training in preventive
medicine and public health; promote training of a diverse workforce; and
promote cultural competence training of health care professionals. Support the
development of interdisciplinary mental and behavioral health training programs
and establish a training program for oral health professionals.
Address the projected shortage of nurses and retention of nurses by increasing
the capacity for education, supporting training programs, providing loan
repayment and retention grants, and creating a career ladder to nursing. Provide
grants for up to three years to employ and provide training to family nurse
practitioners who provide primary care in federally qualified health centers and
nurse-managed health clinics.
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.
Community and School Health Centers: Improve access to care by increasing
funding by $11 billion for community health centers and by $1.5 billion for
National Health Service Corps over five years; establishing new programs to
support school-based health centers and nurse-managed health clinics
Trauma Care: Establish a new trauma center program to strengthen emergency
department and trauma center capacity. Fund research on emergency medicine,
including pediatric emergency medical research, and develop demonstration
programs to design, implement, and evaluate innovative models for emergency
care systems.
Public Health and Disaster Preparedness: Establish a commissioned Regular
Corps and a Ready Reserve Corps for service in time of a national emergency.
Non-Profit Hospital Requirements: Impose additional requirements on nonprofit
hospitals to conduct a community needs assessment every three years and
adopt an implementation strategy to meet the identified needs, adopt and widely
publicize a financial assistance policy that indicates whether free or discounted
care is available and how to apply for the assistance, limit charges to patients
who qualify for financial assistance to the amount generally billed to insured
patients, and make reasonable attempts to determine eligibility for financial
assistance before undertaking extraordinary collection actions. Impose a tax of
$50,000 per year for failure to meet these requirements.
American Indians: Reauthorize and amend the Indian Health Care Improvement
Act.
” Kaiser Family Foundation.
The KFF has also summarized the current plans that are moving through Congress. The summaries and comparisons can be found here.
Logikos Advocacy Group 