A Simple Guide to Today's Healthcare Reform Changes

Today the next stage of healthcare reform arrived on the scene, meaning a change in landscape for providers, insurance companies, and patients.

Several changes will begin taking shape this week. Here’s a look at what we will see as the autumn open enrollment period approaches (some changes won’t be felt until January 1st, when many new healthcare plans kick in):

  • Free preventive services.  Preventive care such as immunizations, breast cancer screenings, prostate and cervical exams, blood pressure checks, and cholesterol tests will not be subject to deductibles or co-pays.  This will lead to an increase in the amount of patients seeking these services.
  • Easier OB/GYN and pediatric visits. Prior authorizations for visits to obstetricians and pediatricians will no longer be required.
  • No “Out of Network” charges for some emergency services.
  • No lifetime limits on coverage.  If you sign up for a new plan after Sept. 23, you can keep it for life.
  • Rescission ban. Insurers will no longer be able to cancel individual coverage if a customer gets sick.
  • Adult child coverage extended. Parents can keep their children on family plans until the kids hit 26.
  • Pre-existing condition changes for children and adults. Insurers will no longer be able to bar children with pre-existing conditions as of this fall; the same rule goes into effect for adults in 2014.
  • Small business tax credits. Companies with 25 of fewer employees, who make $50,000 on average, will get a 35 percent tax break on the cost of premiums. The credit is slated to rise to 50 percent in 2014.
  • Subsidized care for low-income families. Families and individuals with income levels of 400 percent of the poverty line will qualify for subsidized coverage.
  • Significant changes trigger new plan status. If employers make significant changes to healthcare plans, i.e. raise employee premiums or cut benefits, the plan is deemed new and falls under the new guidelines.
  • New insurance company decision appeal process.  The law requires insurance companies to set up an outside appeals process for claims that are denied.
  • Medicare wins, Medicare Advantage loses. Basic Medicare benefits are set to grow, but Medicare Advantage plans — privately administered Medicare plans — could see benefits shrink.

For updates on new stages of the Healthcare Reform program, subscribe to our blog on the upper right sidebar.

A New Day in Healthcare

Insider sources in Washington D.C. have confirmed that the vote on healthcare reform will successfully pass the House, the budget for the bill will then be reconciled by the Senate, and then the President will sign into law one of the most significant pieces of legislation in almost a generation.

Today truly is a new day in healthcare. 

Whether you’re for it or against it, there is no doubt that it will make significant changes to almost 1/6 of the US Economy, add millions of regular users to the healthcare industry, and usher in a new era of growth to an industry already poised to experience tremendous growth as the Baby Boomers retire. 

So, you might be wondering how this affects you?  In this posting, we will attempt to provide a basic overview of what will happen.  While it will vary by what part you play in the industry, it is certain to affect everyone:

Patients will:

  1. be required to carry health insurance
  2. get help from the government if they qualify under a certain income threshold
  3. not have lifetime caps on insurance coverage
  4. not be excluded from some option of coverage due to pre-existing conditions
  5. pay a tax on very expensive health insurance plans (The so-called Cadillac Plans) 
  6. see Medicare Advantage plans begin to disappear
  7. see the value of their health benefits reported on their W-2 forms

Clinical Professionals (Doctors, Nurses, Therapists, Leaders, etc.) will:

  1. see the number of potential patients rise as the program begins implementation
  2. see changes in reimbursement methods and amounts
  3. see encouragement of doctors and caregivers to reorganize to provide more efficiency and quality of care
  4. have fewer uninsured patients that need care

As with any new entitlement, someone will have to pay for it.  In this case, it will be paid for by new taxes, State budgets, and some cuts in Medicare budgets.  Also, as was the case with Medicare and Social Security, the costs will probably outgrow the current plans for taxes and cuts, and new taxes or deficits will be needed. 

The impact this bill will have on insurance companies, Medicare, Medicaid, businesses, and taxes is not certain.  The country is sharply divided on the matter, and there will be many legal battles and objections from States.  Periodically, I’ll update our readers here on what we’re seeing on the horizon as things change.  However, history has shown us that these sort of reforms are hard to reverse. 

For your reference, we have provided a helpful timeline below to outline when different phases will begin.  Let me know if we missed anything, and please subscribe to the blog (in the upper righthand corner) if you are interested in getting more updates in the future.  This is important stuff, and we’ll get through it together.

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Within One Year

  • Insurance companies will be barred from dropping people from coverage when they get sick.
  • Lifetime coverage limits will be eliminated and annual limits are to be restricted.
  • Insurers will be barred from excluding children for coverage because of pre-existing conditions.
  • Young adults will be able to stay on their parents’ health plans until the age of 26. Many health plans currently drop dependents from coverage when they turn 19 or finish college.
  • Uninsured adults with a pre-existing conditions will be able to obtain health coverage through a new program that will expire once new insurance exchanges begin operating in 2014.
  • A temporary reinsurance program is created to help companies maintain health coverage for early retirees between the ages of 55 and 64. This also expires in 2014.
  • Medicare drug beneficiaries who fall into the “doughnut hole” coverage gap will get a $250 rebate. The bill eventually closes that gap which currently begins after $2,700 is spent on drugs. Coverage starts again after $6,154 is spent.
  • A tax credit becomes available for some small businesses to help provide coverage for workers.
  • A 10 percent tax on indoor tanning services that use ultraviolet lamps goes into effect on July 1.

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 that might otherwise require institutional care.
  • Payments to insurers offering Medicare Advantage services are frozen at 2010 levels. 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 according to market share. The fee does not apply to companies with sales of $5 million or less.

2012

  • Physician payment reforms are implemented in Medicare to enhance primary care services and encourage doctors to form “accountable care organizations” 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.

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% 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.

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.

2015

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

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.

Some information was gathered from our friends at Reuters.  To view their original report, please visit:  http://www.reuters.com/article/idUSN1914020220100319

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