Thoughts on Obamacare Pt 2

Today we'll look at how the health care law will affect us coming up in the next few years. If you're unfamiliar with typical health care terminology, refer to this post from Monday that covers the basics.

So, last week the Supreme Court upheld most of the health care law in a 5 to 4 vote. The core of the health care law is the individual mandate, which some states were suing was unconstitutional since it forced Americans to buy health insurance. The reason why it was upheld was since the penalty for not buying health insurance is a tax, Congress has the right to tax citizens to pay for public programs and therefore can tax to uphold the finances of the law.

No joke, this law is expensive. But only at first. The non-partisan Congressional Budget Office (CBO) has said that for the first 2 years of the law (which has already started), the country will spend $700 billion on the law. However, for the next 8 years after that it will save enough money that over 10 years the US will save $210 billion. Meaning that this law will help reduce the deficit. After the first 10 years, the law will reduce the deficit by 0.5% of GDP. The CBO says this but adds that this is all speculative since we don't know exactly how employers and citizens will react in the next few years.

So, let's look at some of the pieces already in place and upcoming.

(I know this is a lot of information, so the parts I think are most important and relevant to my readers and clients have been bolded.)

Already in place:
1. Preventive medical care with no deductibles or other cost sharing- all new plans must cover basic preventative medicine like mammograms and colonoscopies without charging a co-pay or additional expense to the insured.


2. No waiting periods for children with medical conditions- going back to my Pay It Forward example, Haley Joel Osmond would get his lifesaving procedure, no questions asked, immediately.


3. No more lifetime caps on benefits- used to be your health insurance only had to spend up to $1 million or $2 million on health care in your lifetime, but now you have no cap on your health insurance. This is especially good for people with chronic conditions that need costly procedures for screenings or for those who get diagnosed with a complex ailment and need lots of surgery or tests.


4. Young adults up to age 26 can stay on their parents' health plans- yours truly has benefited from this rule for the last year and a half. It was a great day when I went from charity care insurance through a hospital to my parents' fancy, all-inclusive group plan.


5. Tax credits for small businesses- small businesses are eligible for tax credits if they provide health insurance to their employees up to 35% of the cost of health insurance.


6. Allowing states to cover more people on Medicaid- this part of the law was deemed unconstitutional since it forced states to accept funds from the federal government and use them according to the federal government's wishes. Now it states accept this funding it is will the limitation that they have to agree to some, but not necessarily all the terms. Medicaid is being expanded to cover those not just below the poverty line, but people like low-paid artists who make above the poverty line, but aren't quite low enough to qualify.


7. Fighting Medicare fraud- this provision has added $2.5 billion back into Medicare alone from its efforts.


8. PCIP- Pre-existing Condition Insurance Program. If you have been denied coverage for the last 6 months because of a pre-existing condition (which can no longer happen under this law) you are eligible to receive lower cost health care through one of these plans until the state health care exchange are set up in 2014. 


9. No rescinding services- Remember when people would have those crazy stories about health insurance companies forcing you to pay for a procedure because your doctor mis-coded something? No longer. Now if there's a mistake in the paperwork, they can't refuse to pay for your service. 


10. Unreasonable Rate Hikes- Insurance companies who unreasonably raise their rates (under what standard, I don't know) will no longer be eligible to participate in the 2014 state exchanges, which is where they can get healthy individuals for cheap to offset the cost of the aging population. Huge incentive to keep climbing rates reasonable.


11. Expanding Community Health Centers- the new law includes funding to support health care centers that will provide care to over 20 million people in medical drought zones where no medical coverage is easily accessible.


11a. Also, there is more money for rural health care providers so they're more likely to stay in the rural area since their salaries are competitive with those in larger areas.


12. Rx Drug Cost Reduction- Medicare Part D covered prescription cost will eventually dwindle until the "donut hole" is closed in 2020. (Donut hole refers to an area of coverage where you've gotten coverage for some prescriptions and your coverage ceases until you get to a higher, new level to resume coverage.) 


13. Bringing down health care premiums- The new law requires that 85% of health insurance premiums cover only health care and the remaining 15% is administrative.


14. Creating Accountable Care Organizations- Health care providers that join one of these organizations receive an incentive for reducing the cost of health care by working together and avoiding multiple tests, re-doing exams and by using resources already in place like past medical records.


A lot! I know! And all of it is AWESOME!   
----------------------------------------------------------------------------------------------------------------------------------


So here's what's upcoming:
1. Standardized billing and paperwork- Effective Oct 2012 health care providers will use a standard form for billing and paperwork to reduce the waste in health care by having to transcribe information from old forms to new forms.


2. Better pay for Medicaid doctors- Effective Jan 2013 Medicaid doctors have to be paid as well as Medicare doctors. This ensures that they will take on new clients and stick with lower income clients. This provision is fully funded by the federal government so states don't have to dip into their coffers to deal with this.


3. Bundled payments- Effective Jan 2013 all your providers for a health care procedure, say a surgery, have to bill your insurance in a "bundle" to avoid multiple claims and multiple bills that you have to keep track of.


4. State Exchanges- Effective Jan 2014. This is my FAVORITE PART of the health care law. If you aren't currently covered by an employer, you will be able to buy affordable insurance through your state's Affordable Insurance Exchange. Here's the kicker: Members of Congress will be covered under exchanges in their own state. So if you're part of an exchange you'll have the same insurance as your Reps.


5. Free Choice- Also Effective Jan 2014. This is how employees who have insurance through their employer are even more guaranteed to keep their coverage. If your health care isn't sufficient, your employer will have to put the money it would have put towards your sub-par coverage toward a different plan to your liking. Meaning, if it sucks, employees could leave a group plan, thus raising premiums in the group plan while employers are still having to pay out what they were paying before. This provision has already caused many employers to re-evaluate their insurance and start a changeover to better insurance coverage.


6. Tax credits for middle class coverage- Effective January 2014. If you are between 100% and 400% of the poverty line (around $43,000 for an individual) you will get a tax credit for your now mandatory health insurance. A tax credit is a dollar-for-dollar reduction of your tax bill rather than a deduction, which reduced a portion of how your tax bill is ultimately calculated. It's advanceable so you don't have to wait for your tax return to get this amount back to you. So between the state exchanges and the tax credit, you will be paying little to nothing for your new health care. 


7. No exclusion due to pre-existing conditions- Effective Jan 2014. Right now you can still be denied for a pre-existing condition (unless you're a minor). You can get federally funded PCIP (see #8 above), but in 2014 NO ONE can deny you coverage due to a pre-existing condition. No one. The end. What I think is funny is that being a woman and a certain races are considered pre-existing conditions and their insurance is more expensive accordingly. Yeah, that will be illegal, too.


8. Value not Volume- And starting in Jan 2015, physicians will be paid based on the quality of the care they give, not the quantity.


The end.


Put questions below!


**You can get the same information I got by going to www.healthcare.gov**