In March 2010, President Obama signed a comprehensive health reform, the Patient Protection and Affordable Care Act (ACA), into law. Together with the Health Care and Education Reconciliation Act, it represents the most significant regulatory overhaul of the country’s healthcare system since the passage of Medicare and Medicaid in 1965. The law makes preventive care, including family planning and related services, more accessible and affordable for many Americans. While some provisions of the law have already taken effect, many more provisions will be implemented through 2017.
The ACA aims to increase the quality and affordability of health insurance, lower the uninsured rate by expanding public and private insurance coverage and reduce the costs of health care for individuals and the government. It provides a number of mechanisms including: mandates, subsidies, and insurance exchanges to increase coverage and affordability. The law also requires insurance companies to cover all applicants within new minimum standards and offer the same rates regardless of pre-existing conditions or gender. Additional reforms aim to reduce costs and improve healthcare outcomes by shifting the system towards quality over quantity through increased competition, regulation, and incentives to streamline the delivery of health care.
The most significant reforms include the following:
- Guaranteed policy issue prohibits insurers from denying coverage to individuals with pre-existing conditions, and a partial community rating requires insurers to offer the same premium to all applicants of the same age and geographical location without regard to gender or most pre-existing conditions (excluding tobacco use).
- Minimum standards for health insurance policies are established.
- An individual mandate requires all individuals not covered by an employer sponsored health plan, Medicaid, Medicare or other public insurance programs (such as Tricare) to secure an approved private-insurance policy or pay a penalty unless the applicable individual is a member of a recognized religious sect exempted by the Internal Revenue Service or has a financial hardship.
- Health insurance exchanges will commence operation in every state. Each exchange will serve as an online marketplace where individuals and small businesses can compare policies and buy insurance (with a government subsidy if eligible).
- Low-income individuals and families :
- Whose income is above 100% and up to 400% of the federal poverty level will receive federal subsidies on a sliding scale if they purchase insurance via an exchange.
- Those from 133% to 150% of the poverty level will be subsidized such that their premium costs will be 3% to 4% of income.
- In 2013, the subsidy would apply for incomes up to $45,960 for an individual or $94,200 for a family of four; consumers can choose to receive their tax credits in advance, and the exchange will send the money directly to the insurer every month.
- Small businesses will also be eligible for subsidies.
- Medicaid eligibility is expanded to include individuals and families with incomes up to 133% of the poverty level, and the CHIP enrollment process is simplified. However, in the case of the National Federation of Independent Business v. Sebelius, the Supreme Court effectively ruled that states may opt-out of the Medicaid expansion, and several have done so.
- Reforms to the Medicare payment system are meant to promote greater efficiency in the health care delivery system by restructuring Medicare reimbursements from fee-for-service to bundled payments. Under the new payment system, a single payment is paid to a hospital and a physician group for a defined episode of care (such as a hip replacement) rather than individual payments to individual service-providers. This is designed to extend the solvency of the Medicare trust fund and therefore reduce the deficit.
- Firms employing 50 or more people but not offering health insurance will also pay a shared responsibility requirement if the government has had to subsidize an employee’s health care, usually through tax deductions. This is commonly known as the employer mandate.
US Dept. of Health and Human Services-http://www.hhs.gov/healthcare/facts/timeline/timeline-text.html
Fetal Alcohol Spectrum Disorders Center for Excellence- http://fasdcenter.samhsa.gov/publications/AffordableCareAct.aspx