Under the new law, most individuals who can afford it will be required to obtain basic health insurance coverage or pay a fee to help offset the costs of caring for uninsured Americans. If affordable coverage is not available to an individual, he or she will be eligible for an exemption.
Americans who earn less than 133% of the poverty level (approximately $14,000 for an individual and $29,000 for a family of four) will be eligible to enroll in Medicaid. States will receive 100% federal funding for the first three years to support this expanded coverage, phasing to 90% federal funding in subsequent years. This will make it easier for states to cover more of their residents if they so choose.
Reduces Medicare Disproportionate Share Hospital (DSH) payments initially by 75% and subsequently increases payments based on the percent of the population uninsured and the amount of uncompensated care provided. Also reduces states’ Medicaid DSH allotments and requires the Secretary to develop a methodology for distributing the DSH reductions.
To expand the number of Americans receiving preventive care, the law provides new funding to state Medicaid programs that choose to cover preventive services for patients at little or no cost. State Medicaid programs will have the opportunity to receive a one percentage point increase in their federal matching rate if they cover the immunizations recommended by the Centers for Disease Control and Prevention Advisory Committee on Immunization Practices (ACIP) and certain preventive services without charging cost-sharing for these services.
A new 3.8% Medicare surtax will be imposed on all or a portion of the net investment income (e.g., interest, dividends, annuities, royalties, rents, and capital gains) of certain higher-income individuals. The tax will apply to: married individuals filing jointly with modified adjusted gross income exceeding $250,000; married individuals with income exceeding $125,000 if filing separately; and single individuals with income exceeding $200,000.
The Medicare payroll tax will increase by 0.9% for individuals making more than $200,000 and married couples making more than $250,000. Under current law, the Medicare payroll tax is 2.9% on all wages, with the wage earner and the employer each paying 1.45%. As a result of the ACA, the worker’s share of the Medicare tax (but not the employer’s share) will increase by 0.9% to a total of 2.35% of total wages beginning in 2013. The 0.9% increase in the Medicare tax will only apply to wages that exceed $200,000 (for singles) or $250,000 (for married couples filing jointly).
A Pre-Existing Condition Insurance Plan (PCIP) provides new coverage options to individuals who have been uninsured for at least six months because of a pre-existing condition. States have the option of running this new program in their state. If a state has chosen not to do so, a plan has been established by the Department of Health and Human Services in that state. This program serves as a bridge to 2014, when all discrimination against pre-existing conditions will be prohibited.
Applications for employers to participate in the program available June 1, 2010
States will be able to receive federal matching funds for covering some additional low-income individuals and families under Medicaid for whom federal funds were not previously available. This will make it easier for states that choose to do so to cover more of their residents. NOTE: The program has already reached its maximum financial capacity and is no longer accepting applicants.
On March 23, 2010, President Obama signed the Affordable Care Act. The law puts in place comprehensive health insurance reforms that will roll out over four years and beyond, with most changes taking place by 2014. Others have already begun. Use this timeline to learn about what’s changing and when.
Changes to note:
50% discount for name-brand drugs in the Medicare “donut hole”
To strengthen the availability of primary care, there are new incentives in the law to expand the number of primary care doctors, nurses and physician assistants, including funding for scholarships and loan repayments for primary care doctors and nurses working in underserved areas. Doctors and nurses receiving payments made under any state loan repayment or loan forgiveness program intended to increase the availability of health care services in underserved or health professional shortage areas will not have to pay taxes on those payments.
Today, 68% of medically underserved communities across the nation are in rural areas, and these communities often have trouble attracting and retaining medical professionals. The law provides increased payment to rural health care providers to help them continue to serve their communities.