Healthcare reform timeline

The Patient Protection and Affordable Care Act (PPACA) and other recent amendments impact hospitals and other medical providers in a variety of ways. Over the next four years, PPACA will expand Medicaid significantly, subsidize insurance premiums, and provide incentives for businesses to provide healthcare insurance.

Key provisions of the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation (HCER) bill are as follows:

2010 PPACA key provisions

  • Increased Medicaid drug rebates and expanded rebate opportunities to Medicaid managed care plans
  • Federal funding support for comparative effectiveness research through establishment of
  • a non-profit (Patient-Centered Outcomes Research Institute)
  • Support for public health initiatives through creation of task forces
  • Coverage for adults with pre-existing conditions eligible for state-run high risk insurance pools to be replaced by health insurance purchasing exchanges
  • Dependent children allowed to remain on parents’ insurance plans until their 26th birthday
  • Insurers are prohibited from discriminating against individuals under age 19 due to pre-existing medical conditions
  • Insurers “new" insurance plans cannot change co-pays or deductibles for preventative care and medical screening
  • Insurance practice of annual spending caps restrained and completely eliminated by 2014
  • Insurers cannot drop policy holders when confronted by illness
  • Health insurance companies must provide detailed information about administrative and executive expenditures
  • Increased support for identifying and prosecuting within the industry
  • Companies providing early retiree benefits for individuals age 55 to 64 are eligible to participate in a limited program that reduces premium costs
  • Non-profit Blue Cross Blue Shield insurance plans are eligible for IRS tax benefits
  • if medical loss ratios are > 85%
  • Tax credit incentives for development of new initiatives targeting disease prevention and for treatment

2011 PPACA key provisions

  • Health insurers required to spend 85% of large group and 80% of small group insurance premiums or return dollar difference in form of rebates
  • Federal “stimulus" dollars offered to encourage implementation of electronic medical records and billing
  • Health insurers must annually report on share of premium dollars spent on medical costs
  • Insurers required to create voluntary options for long-term care insurance
  • Employers required to disclose value of health insurance coverage on employees W-2 form
  • New Simple Cafeteria Plan created to enable small businesses to provide tax-free benefits for health coverage to their employees

2012 PPACA key provisions

  • Incentives for creating integrated health systems (i.e., accountable care organizations)

2013 PPACA key provisions

  • Industry-wide adoption of ICD-10 medical coding standard
  • Adoption of payment bundling for select medical conditions and procedures
  • Health insurers required to implement uniform standards for electronic exchange of health information to reduce paperwork and administration costs

2014 PPACA key provisions

  • Insurers are prohibited from discriminating against or charging higher rates for any individuals based on pre-existing medical conditions
  • Insurers are prohibited from establishing annual spending caps
  • Expand Medicaid eligibility; individuals with income up to 133% of the poverty line qualify for coverage, including adults without dependent children
  • Offer tax credits to small businesses who have fewer than 25 employees and provide healthcare benefits for them
  • Impose a $2,000 per employee tax penalty on employers with over 50 employees who do not offer health insurance to their full-time workers (as amended by the reconciliation bill*)

    *In 2008, over 95% of employers with at least 50 employees offered health insurance
  • Impose an annual penalty of $95, or up to 1% of income, whichever is greater, on individuals who do not secure insurance: this will rise to $695, or 2.5% of income by 2016; this is an individual limit, families have a limit of $2,085; exemptions to the fine in cases of financial hardship or religious beliefs are permitted
  • Under CLASS Act provision, creates a new voluntary long-term care insurance program; enrollees who have paid premiums into the program and become eligible (due to disability or chronic illness) would receive benefits that help pay for assistance in the home or in a facility
  • 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 contribution 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 food 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
  • Establish health insurance