Obama signs the health care reforms
U.S. President Barack Obama has signed the Patient Protection and Affordable Care Act into law, enacting a set of health care reforms.
Along with the proposed Health Care and Education Reconciliation Act of 2010, the Act is a product of the health care reform agenda of the Democratic 111th Congress and the Obama administration.
The Patient Protection and Affordable Care Act passed the Senate on December 24, 2009, by a vote of 60–39 and passed the House of Representatives on March 21, 2010, by a vote of 219–212, with no Republicans in either house voting for the bill. At the time of the vote, there were four vacancies in the House.
The bill was originally drafted by the Senate as an alternative to the Affordable Health Care for America Act, which was passed by the House two months earlier on November 7. However, after the Democrats lost their supermajority in the Senate on January 19, 2010, the House decided to pass the Senate version and amend it with a third bill. This will allow the Senate to pass the amendments via the simple-majority reconciliation process.
Here are some of the key provisions of the bill:
Effective June 23, 2010
- Adults with pre-existing conditions will be eligible to join a temporary high-risk pool, which will be superseded by the health care exchange in 2014.
Effective September 21, 2010
This list is incomplete
- Children and young adults will be permitted to remain on their parents’ insurance plan until their 26th birthday.
- Insurers are prohibited from charging co-payments or deductibles for preventive care and medical screenings on all new insurance plans.
- Individuals affected by the Medicare Part D coverage gap will receive a $250 rebate, and 50% of the gap will be eliminated in 2011.
- Insurers’ abilities to enforce annual spending caps will be restricted, and completely prohibited by 2014.
- Insurers are prohibited from dropping policy holders when they get sick.
- Insurers are required to reveal details about administrative and executive expenditures.
- Insurers are required to implement an appeals process for coverage determination and claims on all new plans.
- Indoor tanning services are subjected to a 10% service tax (informally known as “the Guido Amendment”).
- Enhanced methods of fraud detection are implemented.
- Medicare is expanded to small, rural hospitals and facilities.
- Non-profit Blue Cross insurers are required to maintain a loss ratio (money spent on procedures over money incoming) of 85% or higher to take advantage of IRS tax benefits.
- Companies which provide early retiree benefits for individuals aged 55-64 are eligible to participate in a temporary program which reduces premium costs.
- A new website installed by the Secretary of Health and Human Services will provide consumer insurance information for individuals and small businesses in all states.
- A temporary credit program is established to encourage private investment in new therapies for disease treatment and prevention.
Effective by January 1, 2011
- Insurers will be required to spend 85% of large group plan premiums (minus certain expenses) on health care or to improve health care quality. The percentage for small group and individual plans is 80% though the Secretary has the ability to adjust that rate for a state if it would destabilize the state market. In both cases states may apply more rigid standards. If insurers spend a lower percent they will be required to rebate back to the customer the difference. Insurers will also be required to report to the U.S. Department of Health and Human Services how they are spending premiums for each plan year including those portions not spent on health care. HHS will then post this information on a web site by July 1, 2010. (Title X, Subtitle A, Sec 10101(f), amending Sec 1001(5), which amends Sec 2718 of the Public Health Service Act)
Effective by January 1, 2014
This list is incomplete.
- All insurers are fully prohibited from discriminating against or charging higher rates for any individuals based on pre-existing medical conditions.
- All insurers are fully prohibited from establishing annual spending caps.
- Expand Medicaid eligibility; individuals with income up to 133% of the poverty line qualify for coverage
- Establish health insurance exchanges, and subsidization of insurance premiums for individuals with income up to 400% of the poverty line, as well as single adults.
- Offer tax credits to small businesses who have fewer than 25 employees and provide health care benefits for them.
- Impose a tax penalty on employers with over 50 employees who do not offer health insurance to their workers. (In 2008, over 95% of employers with at least 50 employees offered health insurance.
- Impose an annual fine on individuals who do not obtain health insurance; exemptions to fine in cases of financial hardship or religious beliefs.
- Creation of a new voluntary long-term care insurance program.
- Creation of tax credits for individuals who purchase private insurance policies
- Employed individuals who pay more than 9.5% of their income on health insurance premiums will be permitted to purchase insurance policies from a state-controlled health insurance option
- Pay for new spending, in part, through spending and coverage cuts in Medicare Advantage, slowing the growth of Medicare provider payments, reducing Medicare and Medicaid drug reimbursement rate, cutting other Medicare and Medicaid spending.
- Revenue increases from a new $2,500 limit on tax-free contributions to flexible spending accounts (FSAs), which allow for payment of health costs.
- Chain restaurants and food vendors with 20 or more locations are required to display the caloric content of their foods on menus, drive-through menus, and vending machines. Additional information, such as saturated fat, carbohydrate, and sodium content, must also be made available upon request.
Effective by 2018
This list is incomplete.
- All existing health insurance plans must cover preventive care and checkups without co-payment.
- A new excise tax on high cost (“Cadillac”) insurance plans is introduced.