ObamaCare

ObamaCare - “Obama Care” Problems “Obama Care” was...

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Unformatted text preview: “Obama Care” Problems “Obama Care” was designed to cure 0 Coverage of people with pre-existing conditions 0 How healthy are you o How often you get medical care 0 Your medical history 0 Disability 0 Extent of previous injuries 0 Renewal /transportability of coverage 0 End of “rescissions” (denial of coverage or cancellation of coverage for “mistakes” on insurance applications) 0 Caps on charges 0 Charge more if you are older 0 Cannot charge anyone more than 3 times what the lowest cost people in the group can obtain coverage Minimum coverage provisions (2014) o All health insurance plans will have to provide “minimum coverage consisting of o Ambulatory services (doctor’s offices and urgent care centers) Emergency services Hospitalization Maternity and newborn care Mental health, substance abuse and behavioral disorder treatments Prescription drugs Rehabilitative services Preventive and wellness services Chronic disease management Pediatric services including oral and vision care 0 Laboratory services 0 Categories of plans 0 Bronze-level (60%) o Silver-level (70% o Gold-level (80%) o Platinum—level (90%) o Out—of—pocket limits 0 No more than out-of—pocket limits from Health Savings accounts 0 2014 $5,950 for individuals or $1 1,900 for families 0 Those under 30 may choose catastrophic plans 0 Cover nothing except 3 doctor’s visits and preventive care 0 Ceiling set at out—of—pocket limits The “Individual Mandate” 0 Everyone has to be covered or pay a fine 0 Purpose is to increase the pool of covered people so that the healthy can cover the costs of the sick 0 Removed people from signing on only when they needed care. 0 Questions 000000000 Page 1 of 5 o What will people have to pay? Government subsidizes your payments until your income exceeds 4 times the federal poverty line ($43,300 individual, $88,200 family of four) Phased out payments as income goes up No one pays more than 2 percent of their adjusted gross income For those earning less than twice the federal poverty amount the maximum is only 1/3rd of the required amount 0 What is the penalty if one doesn’t sign up? The employer has to inform the IRS about the coverage they are providing you so if the plan is acceptable you don’t have to worry Fee begins a $95 per person in 2014 and rises to $695 for 2016 indexed for inflation. Or if more than the flat fee above, 1% of adjusted gross income in 2014, 2% in 2015, 2.5% in 2019 going forward 0 What must employers do? “Employer mandate” Based on the idea of “shared responsibility” 0 Recognized that mandating coverage might 0 Cause firms to employ fewer people 0 Pay lower wages/fewer benefits 0 Go out of business 0 Move to foreign country If a business chooses not to provide coverage they will pay a “fee” 0 If more than 50 employees the “fee” is $2,000 per worker (first 30 workers don’t count) 0 If less than 50 workers you are exempt from the fine or providing coverage for your employees If an employer offers coverage that is too expensive (covers less than 60 percent of costs or costs more than 9.5% of employee’s income) then the fine is $3,000 per worker Health Care Exchanges “Virtual Market Places” which offer a variety of private health care plans for those not covered by employer plans “Massachusetts Plan” Are to be offered through each state (7 states including WV) have adopted plans Groups plans based on coverage and cost so the consumer will know what they are buying Eligibility is limited to those who can’t get insurance through their employer Not eligible if covered under another program 0 O O O 0 Medicare or Medicaid Federal Employees Health Benefits Program TRICARE Veterans Administration State health care programs (meet minimum requirements) Limited to use by firms with less than 100 employees until 2017 How do they work? Page 2 of 5 State programs under federal “guidelines” If states “op-out” the feds will set up one States have to set up SHOPS (Small Business Health Options Program People apply either on the web or on paper or over the phone Each exchange is to be self—sufficient by 2015 States must have “ombudsman” offices to assist and “navigators” to help people enroll 0 States can ban abortion coverage from the plans in their exchanges and if states do allow that coverage it must be paid “outside the plan” with no federal funding involved 0 Illegal Immigrants are not eligible to participate in the exchanges Changes in Medicare 0 Expanded coverage but higher costs 0 Prescription drug coverage 0 “donut hole” (after your deductible was paid you paid 25% of drug costs up to $2,800 after that you had no drug coverage until your expenses exceeded $4,550) will be closed over 10 years. 0 Drug companies can only charge 50% of price of brand name drugs to those in the donut hole 0 All preventive care is now “free” if an approved procedure 0 “Medicare Advantage” plans will have to reduce payments to providers 0 Payments to provider (now set at 80% of costs) will not be allowed to rise any faster than the CPI no matter how fast care costs rise 0 expectation is that providers should become more efficient and productive to offset lost revenue by ' Bundling of payments where payment is made on each episode of health care I Medical “Homes” I Accountable care organizations where providers take responsibility for patients care and keep any “profits” they make by becoming more efficient I Financial rewards to hospitals for reducing costs and penalties of readmissions 0 Will providers either reject Medicare patients or reduce treatments to them Changes in Medicaid o All adults will be eligible if income is less than 133 percent of federal poverty level 0 State Children’s Health Insurance Programs will expand to cover all children living near or at the poverty level Who decides on the level of care? 0 Comparative Effectiveness Research 0 Determines what treatments works better (less costly) for certain conditions 0 Government is not obligated to accept these results (VA is) 0 Will be conducted by the Center for Medicare and Medicaid Innovation which will issue “guidelines” 0 Independent Payment Advisory Board (Medicare only) 0 15 member board appointed by the president 0 Purpose to reduce the rate of increase in health care spending 000000 Page 3 of 5 o If Medicare spending rises faster than inflation then the Board is to recommend steps to bring down spending (limit provider payments) 0 Its “suggestions” become effective automatically unless Congress passes a bill that achieves the same amount of savings using a different method 0 By law it cannot “ration” health care or make decisions regarding individual patients Medical Lawsuits O 0 Congressional Budget Office estimated tort reform would save $11 billion a year Allows states to experiment with alternatives but prohibits anything which reduces or restricts the “right to sue”. How will it be paid for? O OO 0 00000 Taxes on “Cadillac” Plans (2018) ($35 Billion) 0 Plans worth more than $10,200 a year for individuals and $27,500 for a family 0 Tax is 40% of the amount over the limit (age and gender adjustments) 0 Exemptions for people in “dangerous jobs” ' Law enforcement/firefighters EMTs, paramedics and first responders Longshoremen Construction workers Miners Agricultural, forestry and fishing workers Medical expense deduction raised from 7.5% of gross income to 10% ($15 Billion) Medicare provider cuts ($157 Billion) 0 Payments raise more slowing than the overall costs of health care 0 Applies to doctors, hospitals, hospices nursing facilities and home health care Medicare Advantage Cuts Cuts to “Disproportionate Share Hospitals” ($36 Billion) 0 Provide above average care to low-income people (mostly urban) 0 Receive subsidies from the feds which will be slowly reduced Higher Medicare Premiums o Premiums increase for those earning $85,000 a year($170,000 for households) 0 Average $40 a month more Higher Medicare Payroll Tax 0 For incomes above $250,000 the tax goes from 1.45% to 2.35 percent of wages 0 New 3.8% tax on unearned income (interest, rents, dividends etc.) Cannot use Health Savings Accounts for “over the counter” medications ($5 Billion) without being taxed at 20% Flexible Spending Accounts limited to $2,500 a year ($13 Billion) Health Insurance Providers Fee ($60 Billion)—depends on share of the market Medical Devices Excise Tax of 2.3% of retail price ($20 billion) Branded Drugs Fees ($27 Billion) on medicines sold for federally supported programs Taxes on Retiree Drug Coverage ($4.5 Billion) o Employers who provide drug coverage to their former workers get a 28% rebate on expenses 0 Rebate will go away 0 Savings estimate based on assumption that employers will not drop the coverage Page 4 of 5 ...
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ObamaCare - “Obama Care” Problems “Obama Care” was...

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