Healthcare Reform Key Provisions
Insurance companies are prohibited from denying coverage based on a pre-existing condition. There are caps on deductibles and annual out of pocket spending is capped at $5,000.
As amended, it prohibits federal funds from covering abortions. Women would need to purchase riders to insurance purchased on the exchange if they wanted that coverage.
The reform reduces overpayments to doctors who treat Medicare Advantage patients. It is estimated they are paid 14 percent more than other doctors.
The bill taxes individuals making more than $500,000 and $1 million for couples. This new tax is 5.4 percent.
The bill includes mandates for individuals to purchase and businesses to provide health insurance or pay a fine. The individual penalty is 2.5 percent of gross income unless they get a waiver. Businesses that dont offer insurance pay a fine equal to 8 percent of their payroll. Businesses with a payroll of less than $500,000 are exempt from the mandate.
The bill provides tax subsidies for individuals between 150 and 400 percent (on a sliding scale) of the Federal Poverty Level. There are also tax subsidies for small businesses.
It creates a public health insurance option and a national exchange for the uninsured and for small businesses to purchase health insurance. The Secretary of Health and Human Services would negotiate rates with doctors and hospitals on reimbursement rates.
A 10-Year Timeline of Health Care Reform
In 2010, there will be three major changes to health care:
- Insurance companies will no longer be allowed to deny coverage to children with pre-existing illnesses.
- Children would be able to stay on their parents insurance policies until they turn 26 years old.
- Medicare recipients who fall into a specific coverage gap will get a $250 rebate.
Other changes in 2010 include:
- Excise tax on indoor tanning, which will increase the cost of the service.
- Individuals that have not had health insurance for six months will receive a subsidy to enroll in high-risk insurance pools. All new insurance plans sold must exempt preventative care and screenings from deductibles.
- Small businesses with fewer than 25 employees will receive up to a 35 percent tax credit for providing health insurance to their employees.
In 2011, the new health care bill will make changes focused mostly on preparing for later updates. The senior citizens that fall into the Medicare doughnut hole, a coverage gap, will get a 50 percent discount on some drugs.
In 2011, a new fee on drug makers will also be implemented to help pay for the upcoming changes. The fine on withdrawing funds from a Health Savings Account for non-medical expenses will increase by 5 to 10 percent. Employers will also need to start including the cost of health care on employees W-2 forms.
No major changes will occur in health care in the year 2012 under the new health care bill.
In 2013, many of the new taxes and fees that will pay for the new health care bill will go into effect. These taxes will include new Medicare taxes on individuals who earn more than $200,000 a year. The wage tax, dividends and interest tax, and a small tax on medical devices will also be implemented.
In 2013, the new health care bill will also implement a test system in Medicare in which payments are made based on the quality, rather than quantity of health care services. Health insurers will also be barred from charging different premiums to customers based on gender.
In 2014, the majority of Americans will gain benefits from the new health care bill.
Exchanges will be created so individuals without employer- provided health care or small business can shop for health care coverage- and insurance companies will be barred from denying coverage on the basis of pre-existing conditions.
Medicare will also expand to cover all Americans with income up to 133 percent of the federal poverty level (about $27,000 per year for a family of 4).
Small businesses will also receive a tax credit to help them provide coverage to their employees. The insurance industry will also be required to pay an annual fee to help pay for the exchanges that will cover all citizens that cannot otherwise receive insurance.
In addition to providing subsidies and guaranteeing coverage for most citizens, the new health care bill will also require that most people have health insurance. There will be a fine for not carrying health insurance of some kind. An independent Medicare board will also be created to help curb Medicare costs if the costs rise more quickly than inflation.
In 2015, the new health care bill will simply continue the new coverage, taxes and fees that were created during the previous years.
In 2016, the penalty for individuals who do not purchase health insurance will rise to a $695 minimum.
In 2017, businesses that have more than 100 employees will be allowed to participate in state insurance exchanges if the state government allows it.
In 2018, an excise tax will be imposed on so-called Cadillac plans that generally provide more than $27,000.