3590 and 4872 seem relatively innocuous as far as numbers are concerned, yet when you precede each number by H.R. and combine them they become the bill numbers that created the most controversial and sweeping changes in healthcare in the history of the United States. The main controversy is whether the “Act,” named the “Patient Protection and Affordable Care Act,” actually does either. It seems that the goal of patient protection will be met but whether it’s affordable remains to be seen. For those who are unable to pay for the healthcare they will receive, the Act surely provides affordable healthcare. But for the rest of the population, nobody really knows. Since it would take a mini encyclopedia to explain the entire Act, I have decided to provide an overview and to address certain provisions that I consider to be particularly interesting or important. The effective dates of the various provisions range from July 1, 2010 to the year 2018, the more significant dates being September 23, 2010 and January 1, 2014. The gap in prescription drug coverage (known as the “doughnut hole”) for seniors will be phased out entirely by 2020. The Act is projected to cost $940 billion over a 10 year period and, according to the Congressional Budget Office, this cost will be more than offset by cuts in spending and increased fees and taxes totaling $138 billion over the same 10 year period. These numbers are, of course, projections, not guarantees. Tax credits To make healthcare more affordable there are refundable tax credits providing premium assistance for coverage under qualified health plans (plans, either group or individual, that provide certain essential health benefits and meet established criteria for certification) and reduced cost-sharing for individuals enrolling in such qualified health plans. Additionally, because the cost of healthcare coverage increases as the percentage of insured individuals decreases, to help keep the cost of coverage affordable as many people as possible must be covered. The Act includes a number of provisions in the hope of making this happen. Grants (based on availability of Treasury funds) are to be provided to states to assist in establishing purchasing exchanges that could create more competition and reduce the price of coverage to small businesses and individuals. There are penalties for large employers who do not provide coverage and tax incentives for small employers who do provide coverage. Individuals (with certain exceptions) who are not covered by an employer plan are penalized if they don’t purchase coverage for themselves and their dependants. Those individuals that cannot afford to purchase coverage have subsidies available to them. To avoid penalties, all coverage purchased by individuals or provided by employers (with one exception) must provide “essential health benefits,” as defined in the Act. The exception is for people under the age of 30 who can purchase plans that cover only catastrophic situations and are exempt from the “essential health benefits” requirement. To assure expansive coverage, the Act includes individual and group market reforms. These include the elimination of lifetime and unreasonable annual limits, a prohibition on rescissions, elimination of pre-existing condition exclusions, extension of dependent coverage, prohibition of excessive waiting periods, non-discrimination in healthcare, coverage of preventive health services and guaranteed availability and renewal of coverage. Quality and efficiency Provisions to improve the quality and efficiency of healthcare include transforming the healthcare delivery system by linking payment to quality outcomes under the Medicare program, a national strategy to improve healthcare quality with quality measure development, the establishment of an interagency working group on healthcare quality, development of new patient care models including the establishment of a Center for Medicare and Medicaid Innovation and monitoring of quality through data collection and public reporting. Accessibility to care is essential to treat serious illnesses and injuries and to prevent minor ones from becoming serious. This is especially important for the elderly. To help ensure access to physician care and other services for Medi-care patients, there are provisions for increasing coverage, speeding up payments, permitting physician assistants to order post-hospital extended care services etc. For patients (not specific to Medicare patients) there are provisions for spending for Federally Qualified Health Centers (FQHCs), re-authorization of the Wakefield Emergency Medical Services for Children Program and other accessibility innovations. On the prevention side, there are numerous provisions for modernizing disease prevention and public health systems, increasing access to clinical preventive services, creating healthier communities by providing grants to State and local government agencies and community-based organizations for the implementation, evaluation and dissemination of evidence-based community preventive health activities to reduce chronic disease rates, prevent the development of secondary conditions, address health disparities and develop a stronger evidence-base of effective prevention programming. Shortage of workers Many states are now experiencing a shortage of healthcare workers. Additionally there are numerous healthcare services that could be provided by lower level healthcare professionals if there were more available. It is frequently not necessary to see a doctor for minor illnesses and injuries but it is necessary to have them treated by other healthcare professionals. The Act provides for loans, grants and other subsidies to support the existing healthcare workforce and to train and develop a substantially increased supply of healthcare workers. By now, you must be wondering how all of the innovations and programs included in the Act will be paid for. The answer is that the Act also provides for revenue enhancements. These enhancements include an excise tax on high cost employer-sponsored health coverage, taxation to the recipient of the cost of employer-sponsored health coverage, an increase in additional tax on distributions from Health Savings Accounts, and Medical Savings Accounts not used for qualified medical expenses, a limitation on health flexible spending arrangements under cafeteria plans, imposition of an annual fee on health insurance providers, branded prescription pharmaceutical manufacturers and importers and on medical device manufacturers and importers, a 5% excise tax on cosmetic surgeries a hospital insurance tax on high-income taxpayers, and various other taxes and limitations on deductions. Only time will tell whether all of the revenue enhancements will actually cover the costs of the spending provisions in the Act. Barbara C. Oberman is the founder and President of Barbara C. Oberman Insurance Services, Inc. in Agoura Hills. She can be reached at (818) 706-3337.
