Obamacare—Past, Present, and Future, Part 1 November 19, 2012 Health Care Reform, Politics and Medicine, San Francisco Medicine, SFMS Member individual mandate, Obamacare, PPACA, Andrew Calman, Patient Protection and Affordable Care Act of 2010 0 By Andy Calman, MD, PhD Note: This article was originally published in the October 2012 issue of San Francisco Medicine. Due to members' request for more information on health care reform and its impact on medicine, SFMS will be publishing a four-part series in the SFMS blog section. Obamacare/PPACA—Beyond the Politics Few people think it’s perfect, or anywhere near perfect. Many Americans believe Obamacare went too far. Others wish it had gone farther and had offered Medicare for all. But love it or hate it, the Patient Protection and Affordable Care Act of 2010—now referred to by both parties as Obamacare—is no longer a bill. It’s the law, and it's already being implemented. It’s time to get past the politics and familiarize ourselves with the many changes that have already taken place, the flood of newly insured patients arriving in little more than a year, and the long-term changes that will alter—for better or worse—nearly every aspect of how we practice our profession. Only a handful of Capitol Hill staffers and CMS bureaucrats know everything packed into the 907 pages of the PPACA, and the thousands of pages of its enabling regulations. But because every doctor needs to be aware of the key provisions, it is worthwhile to review a succinct implementation timeline. What Has Already Changed A number of the provisions of Obamacare have already taken effect. Small businesses employing fewer than twenty-five employees—whose average wages are less than $50,000 per year—can currently receive subsidies of up to 35% for insuring their employees during tax years 2010 through 2013. The Medicare doughnut hole has been reduced by 50% and will be eliminated in 2020, with phased-in discounts for drugs in the doughnut hole. Insurers can no longer discriminate against children with preexisting conditions. For adults with preexisting conditions, temporary high-risk pools (Pre-Existing Condition Insurance Plans, www.pcip.gov) have been created to bridge the gap until the state insurance exchanges begin enrollment in 2014. These plans are priced at the same community rates as those for healthy patients, with a maximum annual out-of-pocket of $5,950 and guaranteed issue—an excellent value for cancer patients and others who cannot otherwise obtain insurance. There is a ban on lifetime coverage caps, and on rescission of coverage for Americans who get sick. All new individual plans must offer preventive care including mammograms and colonoscopies, as well as contraception (with exemptions for certain religious organizations), with no co-pays or deductibles. Young adults can now stay on their parents’ policies until age 26, even if they reside elsewhere. States who provide Medicaid up to 133% of FPL (federal poverty level) receive federal matching funds. And last month, thousands of astonished Americans received rebate checks from their health insurance companies due to a provision requiring that 80% of premium revenue (85% for large groups) be spent on actual health care. 2014: Individual Mandate, Medicaid Expansion, and Health Insurance Exchanges Although many of the provisions implemented so far are popular, some of the provisions that will transform health care beginning in 2014—just over a year away—are more controversial. Americans who are not already covered by public or private health insurance will be required to purchase an individual plan or pay a penalty. CBO estimates that about 1.2% of the population will pay the penalty in 2016. The penalty—1% of income, rising to 2.5% in 2016, with a minimum of $695 per year for individuals and $2,095 for families—is rather small compared to the cost of health insurance, and many Americans will elect to pay the penalty/tax instead of purchasing expensive coverage. Persons with religious exemptions, such as Christian Scientists, are exempt from the penalty. Additionally, there is an exemption if the least expensive available plan exceeds 8% of family income. These people, as well as individuals under 30, will have the option to purchase cheaper “catastrophic” high-deductible plans instead. Beginning in 2014, the ban on discrimination against people with preexisting conditions will apply to adults as well as children. Annual spending caps will be banned. Consumers and small businesses will be able to shop for plans in “health insurance exchanges” set up by each state, comparing the cost and features of standardized Bronze, Silver, Gold, and Platinum benefits packages. These benefits packages must provide specified “minimum essential benefits” and will be actuarially standardized so that, for example, a Bronze Plan would cover 60% and a Platinum Plan 90% of services for an average population, with the remainder paid by co-payments and deductibles. However, the annual out-of-pocket maximum would be capped at $5,950 per individual ($11,900 per family) for individual plans and at $2,000 ($4,000 per family) for small group plans. Policies offered by the exchanges must offer “guaranteed issue” and “community rating,” where premiums are adjusted only by geographic region, age, and tobacco use, without regard to gender or preexisting conditions. Some states have declined to set up their own exchanges. The department of HHS is empowered to set up exchanges for these states, but funding for these federal exchanges is uncertain and depends on the will of the next Congress. Dr. Andrew Calman practices ophthalmology at CPMC-St. Luke’s and teaches at CPMC and UCSF. He is past president of the California Academy of Eye Physicians and Surgeons, chair of the SFMS’s Political Action Committee, and served for many years on California’s Medicare Carrier Advisory Committee as well as the National Health Policy Committee of the American Academy of Ophthalmology. Comments are closed.
