Washington Health Policy Week in Review
What's in Effect, What's Ahead Under Health Care Overhaul

By CQ Staff

July 9, 2014 -- The Supreme Court's decision to largely uphold the health care overhaul (PL 111-148, PL 111-152) protects provisions already in effect and clears the way, barring changes to the law, for full implementation. Although some aspects of the overhaul have been in place since the law was enacted in 2010, many central elements will not take effect until later this decade, such as the state health insurance exchanges and the mandate to obtain coverage or pay a penalty. Some of the major changes made by the law are listed below.

ALREADY IN EFFECT

Expanded Coverage

A temporary national high-risk pool provides coverage to adults with pre-existing conditions.

A temporary reinsurance program assists employers in providing coverage to retirees over age 55 who aren't eligible for Medicare.

Covered dependents must be allowed to stay on health policies until age 26.

Insurance Regulation

Health care plans are barred from placing lifetime limits on coverage; from rescinding coverage, except in cases of fraud; and from excluding coverage for children who have pre-existing conditions.

Health care plans must report annually how much premium income goes for clinical services, quality improvements and non-claim costs.

Wellness

Chain restaurants and vending machines are required to report the nutritional value of their food.

A Prevention and Public Health Fund supports preventive care and other public health priorities.

Medical Malpractice

The Health and Human Services secretary is authorized to spend $50 million over five years on grants to states to design alternative methods of resolving medical malpractice claims and to encourage more detailed reporting of medical errors.

Prescription Drugs

Manufacturers are required to provide a 50 percent discount on brand-name prescriptions filled while a patient is in the Medicare Part D coverage gap; federal subsidies for generic prescriptions begin to be phased in.

The rebate percentage for drugs provided under Medicaid is increased.

The Food and Drug Administration is authorized to approve generic versions of biologic drugs.

Taxes

Nonprofit hospitals are subject to a tax of $50,000 per year if they fail to meet certain requirements.

An excise tax of 10 percent is imposed on indoor tanning services.

An annual fee is imposed on pharmaceutical manufacturers based on annual sales of brand-name drugs.

Over-the-counter drugs that aren't prescribed by a physician may no longer be purchased using tax-advantaged set-asides such as Flexible Spending Accounts, Health Savings Accounts or Archer Medical Savings Accounts.

Medicare

New physician-owned hospitals are barred from participating in Medicare.

Medicare Part B physician premiums and Part D drug premiums increase for some people, based on incomes.

Annual increases in hospital payments are limited to account for productivity gains.

Providers that qualify as accountable care organizations share in cost savings they achieve for Medicare.

Medicaid

The new Federal Coordinated Health Care Office within the Centers for Medicare and Medicaid Services (CMS) is designed to improve care coordination for seniors eligible for both programs.

Federal payments to states for Medicaid services related to hospital-acquired conditions are prohibited.

FUTURE PROVISIONS

Sept. 23, 2012

Private individual and group health care plans must provide a uniform summary of benefits and coverage to all applicants and enrollees.

Oct. 1, 2012

Hospitals that meet certain performance standards become eligible for value-based incentive payments.

Medicare payments to hospitals are reduced to account for preventable hospital readmissions.

Jan. 1, 2013

Taxpayers with earned incomes over $200,000 for individuals and $250,000 for couples must pay higher Medicare hospital insurance taxes on their income, including non-wage earnings.

The tax deduction for employers who receive Medicare Part D subsidy payments is eliminated.

Federal subsidies begin for brand-name drugs purchased through Medicare Part D while a patient is caught in the coverage gap.

An excise tax of 2.3 percent is levied on manufacturers and importers of certain medical devices.

Jan. 1, 2014

All states must have established a state health insurance exchange to aid in the purchase of health insurance for individuals and small businesses.

All new policies are required to conform with benefits standards determined by the Department of Health and Human Services.

Individuals are required to have qualifying health insurance or face a tax penalty.

Employers with 50 or more workers are subject to fees if they don't offer health coverage or if any employee receives subsidized coverage through an exchange.

Medicaid is expanded to cover all individuals under 65 with incomes up to 133 percent of the federal poverty level. (Under the court ruling, states may opt out of the expansion.)

Individuals and families with incomes between 133 percent and 400 percent of the federal poverty level begin receiving premium credits and cost-sharing subsidies to purchase insurance through the exchanges.

Jan. 15, 2014

A new Independent Payment Advisory Board may begin submitting advisory reports to Congress regarding Medicare spending.

Oct. 1, 2014

Federal payments to so-called Disproportionate Share Hospitals, which treat large numbers of indigent patients, are to be reduced and subsequently allowed to rise based on the percentage of the population that is uninsured in each state.

Jan. 1, 2015

CMS begins using the Medicare fee schedule to give larger payments to physicians who provide high-quality care compared with cost.

Oct. 1, 2015

States are allowed to shift children eligible for care under the Children's Health Insurance Program to health care plans sold on their exchanges, as long as HHS approves.

Jan. 1, 2016

Health care compacts that enable insurance plans to be sold across state lines are allowed to take effect.

Jan. 1, 2018

An excise tax equal to 40 percent of the excess benefit is imposed on high-cost health insurance plans.


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