After a brief hiatus I have returned to share the manna of a public health degree - to those who consider such knowledge valuable. I would like to continue the discussion of the Affordable Care Act.
I initially presented the PPACA in terms of its titles. However, for the sake of both brevity and clarity I'm going to change my approach for this post. Addressing each title individually is unwieldy; instead, the discussion will be organized into broad categories of reform, all pertinent to our experience as patients and consumers of healthcare.
There are three major themes to the reform: mandates, subsidies, and insurance reform
Mandates:
We have discussed the individual mandate previously and why the mandate is a complement to health insurance reform. The individual mandate requires a person to pay 2.5% of their income or $695 dollars, whichever is greater.
Also in place is an employer mandate in which companies above 50 persons are penalized for not providing insurance or placing too much of the cost on the employee. The penalties range from $2,000 to $3,000 per person and are a considerable source of planned revenue to support the subsides of the ACA.
Both mandates are set to begin in 2014. The individual mandate will initially begin with diminished penalties, the penalties will increase over the following year to the full amount.
Subsidies:
With the mandate in place, how are we going to get health insurance? The government helps out in three ways: Medicaid reform, Insurance Exchanges, and Tax Subsidies.
Medicaid Reform
Recall from a prior post that Medicaid provides coverage for those in poverty. However, Medicaid isn't available to everyone without means; instead there is "categorical eligibility" meaning only certain sub-groups of the impoverished are able to receive coverage: pregnant women, children, the aged, and disabled individuals. Children are actually covered under a similar but separate program, the State Children's Health Insurance Program (SCHIP).
It sounds complicated but don't worry, you can forget it. PPACA has gotten rid of SCHIP and then expanded the coverage for Medicaid. Under new law, anyone under 138% of the poverty line is eligible for Medicaid. It is an impressive move to increase coverage and a focal point of controversy. Some view it as a positive move toward ensuring coverage for our entire population others see it as the expansion of an already costly system.
Insurance Exchanges
I'm going to refrain from re-explaining insurance exchanges (see the last post) and will just say that they are a state run program which allow individuals and small groups to purchase health insurance for a reasonable price. More interesting is the subsidy system in place to ensure that individuals can purchase insurance through exchanges.
First, the ACA divides insurance plans into four tiers based on actuarial value - the percentage of health care costs covered by the insurer. The document categorizes them as "bronze" (covers 60% of medical costs), "silver" (70%), "gold" (80%), and "platinum" (90%).
I want to submit the request for a platinum coated platinum plan in which the insurance company actively pays me for seeking health care...just a thought. In all seriousness though, this scale is important because financial support for purchasing insurance is based on the pricing of "silver" plans.
Exchange subsidies are available for those citizens whose income is up to 400% of the federal poverty level ($93,700 for a family of 4 in 2014). One is responsible to contribute at least 2% of household income to the purchase of health insurance. As income levels approach the 400% mark, the percentage contribution increases in steps to 9.5%. If you are below 138% of the poverty level, the entire cost is subsidized.
Tax Subsidies
Small business receive tax credits as an incentive to provide insurance to employees. The maximum credit is 50% of the employers cost of insurance premiums. The amount of credit declines as a businesses approaches 25 people or an average wage of $50,000 annually. Small businesses are not penalized for not offering insurance but, as mentioned previously, larger businesses must pay a fine for offering no or inadequate insurance.
Insurance Industry Requirements:
The regulation of the insurance industry was the central theme of the past post. This portion, particularly the part mandating coverage regardless of pre-existing conditions, is seen as one of the major humanitarian victories of the ACA.
Recently insurance premiums have been rising. Many insurers claim that premium increases are a result of the requirement to cover patients with pre-existing - and expensive - conditions. The administration's stance is that many premium increases were planned beforehand and the bill is being used as a convenient rationale.
Regardless, insurers will be subjected to increased regulatory scrutiny for increases over 10% and be required to provide public justification for any such increases. Existing rate review process are spotty, some states not even having a regulatory mechanism in place. The ACA provides funding to bolster existing programs and create new programs in states without. Historically, state level regulation has been poorly organized and ineffective. The ACA does not change the state run model but rather expands and supports it, leaving uncertainty if the insurer rate review process will be substantive.
Other Provisions:
There are several other components of the bill that are yet to be addressed. The ACA invests in public health interventions, creates a third party entity to research which treatments are best, expands the role of non-physician providers, and experiments with new ways of paying for medical care. Many of these topics deserve their own discussion and will be addressed in the near future.
Conclusion:
In describing the PPACA, initially in terms of its structure and then later in terms of conceptual themes, we have a conceptual framework on which to build and understand future discussions of health policy. Obviously, the exploration of the bill was truncated - as is any attempt to discuss a 2000+ page document in about 10 minutes - but in subsequent writing I will continue to revisit the ACA both to provide legislative context as well as incrementally develop a more thorough understanding of what the bill means to us as citizens.
For those wonks chomping at the bit for more, the following are excellent resources for exploring and understanding PPACA on your own:
Kaiser Family Foundation's Health Reform site
Commonwelth Fund's Health Reform Resource Center
Robert Wood Johnson Foundation's Health Policy site
www.healthcare.gov
Enjoy, be informed, and, above all, cultivate an intelligence intimidating to your peers...
I initially presented the PPACA in terms of its titles. However, for the sake of both brevity and clarity I'm going to change my approach for this post. Addressing each title individually is unwieldy; instead, the discussion will be organized into broad categories of reform, all pertinent to our experience as patients and consumers of healthcare.
There are three major themes to the reform: mandates, subsidies, and insurance reform
Mandates:
We have discussed the individual mandate previously and why the mandate is a complement to health insurance reform. The individual mandate requires a person to pay 2.5% of their income or $695 dollars, whichever is greater.
Also in place is an employer mandate in which companies above 50 persons are penalized for not providing insurance or placing too much of the cost on the employee. The penalties range from $2,000 to $3,000 per person and are a considerable source of planned revenue to support the subsides of the ACA.
Both mandates are set to begin in 2014. The individual mandate will initially begin with diminished penalties, the penalties will increase over the following year to the full amount.
Subsidies:
With the mandate in place, how are we going to get health insurance? The government helps out in three ways: Medicaid reform, Insurance Exchanges, and Tax Subsidies.
Medicaid Reform
Recall from a prior post that Medicaid provides coverage for those in poverty. However, Medicaid isn't available to everyone without means; instead there is "categorical eligibility" meaning only certain sub-groups of the impoverished are able to receive coverage: pregnant women, children, the aged, and disabled individuals. Children are actually covered under a similar but separate program, the State Children's Health Insurance Program (SCHIP).
It sounds complicated but don't worry, you can forget it. PPACA has gotten rid of SCHIP and then expanded the coverage for Medicaid. Under new law, anyone under 138% of the poverty line is eligible for Medicaid. It is an impressive move to increase coverage and a focal point of controversy. Some view it as a positive move toward ensuring coverage for our entire population others see it as the expansion of an already costly system.
Insurance Exchanges
I'm going to refrain from re-explaining insurance exchanges (see the last post) and will just say that they are a state run program which allow individuals and small groups to purchase health insurance for a reasonable price. More interesting is the subsidy system in place to ensure that individuals can purchase insurance through exchanges.
First, the ACA divides insurance plans into four tiers based on actuarial value - the percentage of health care costs covered by the insurer. The document categorizes them as "bronze" (covers 60% of medical costs), "silver" (70%), "gold" (80%), and "platinum" (90%).
I want to submit the request for a platinum coated platinum plan in which the insurance company actively pays me for seeking health care...just a thought. In all seriousness though, this scale is important because financial support for purchasing insurance is based on the pricing of "silver" plans.
Exchange subsidies are available for those citizens whose income is up to 400% of the federal poverty level ($93,700 for a family of 4 in 2014). One is responsible to contribute at least 2% of household income to the purchase of health insurance. As income levels approach the 400% mark, the percentage contribution increases in steps to 9.5%. If you are below 138% of the poverty level, the entire cost is subsidized.
Tax Subsidies
Small business receive tax credits as an incentive to provide insurance to employees. The maximum credit is 50% of the employers cost of insurance premiums. The amount of credit declines as a businesses approaches 25 people or an average wage of $50,000 annually. Small businesses are not penalized for not offering insurance but, as mentioned previously, larger businesses must pay a fine for offering no or inadequate insurance.
Insurance Industry Requirements:
The regulation of the insurance industry was the central theme of the past post. This portion, particularly the part mandating coverage regardless of pre-existing conditions, is seen as one of the major humanitarian victories of the ACA.
Recently insurance premiums have been rising. Many insurers claim that premium increases are a result of the requirement to cover patients with pre-existing - and expensive - conditions. The administration's stance is that many premium increases were planned beforehand and the bill is being used as a convenient rationale.
Regardless, insurers will be subjected to increased regulatory scrutiny for increases over 10% and be required to provide public justification for any such increases. Existing rate review process are spotty, some states not even having a regulatory mechanism in place. The ACA provides funding to bolster existing programs and create new programs in states without. Historically, state level regulation has been poorly organized and ineffective. The ACA does not change the state run model but rather expands and supports it, leaving uncertainty if the insurer rate review process will be substantive.
Other Provisions:
There are several other components of the bill that are yet to be addressed. The ACA invests in public health interventions, creates a third party entity to research which treatments are best, expands the role of non-physician providers, and experiments with new ways of paying for medical care. Many of these topics deserve their own discussion and will be addressed in the near future.
Conclusion:
In describing the PPACA, initially in terms of its structure and then later in terms of conceptual themes, we have a conceptual framework on which to build and understand future discussions of health policy. Obviously, the exploration of the bill was truncated - as is any attempt to discuss a 2000+ page document in about 10 minutes - but in subsequent writing I will continue to revisit the ACA both to provide legislative context as well as incrementally develop a more thorough understanding of what the bill means to us as citizens.
For those wonks chomping at the bit for more, the following are excellent resources for exploring and understanding PPACA on your own:
Kaiser Family Foundation's Health Reform site
Commonwelth Fund's Health Reform Resource Center
Robert Wood Johnson Foundation's Health Policy site
www.healthcare.gov
Enjoy, be informed, and, above all, cultivate an intelligence intimidating to your peers...
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