Know how and when the new law is changing by using the interactive timeline below. As a bonus, we’ve categorized all events to specifically align with your key interests. Click on each colored theme below to see only portions of the law that involve that theme.
The law implements strong reforms that prohibit insurance companies from refusing to sell coverage or renew policies because of an individual’s pre-existing conditions. Also, in the individual and small group market, it eliminates the ability of insurance companies to charge higher rates due to gender or health status.
Workers meeting certain requirements who cannot afford the coverage provided by their employer may take whatever funds their employer might have contributed to their insurance and use these resources to help purchase a more affordable plan in the new Affordable Insurance Marketplaces. These new competitive marketplaces will allow individuals and small businesses to buy qualified health benefit plans.
The law implements the second phase of the small business tax credit for qualified small businesses and small non-profit organizations. In this phase, the credit is up to 50% of the employer’s contribution to provide health insurance for employees. There is also up to a 35% credit for small non-profit organizations.
Starting in 2014 if your employer doesn’t offer insurance, you will be able to buy it directly in an Affordable Insurance Marketplace. A Marketplace is a new transparent and competitive insurance market where individuals and small businesses can buy affordable and qualified health benefit plans. Marketplaces will offer you a choice of health plans that meet certain benefits and cost standards. Starting in 2014, Members of Congress will be getting their health care insurance through Marketplaces, and you will be able buy your insurance through Marketplaces too.
Employers must provide employees written notice: (1) of the existence of the Health Insurance Marketplace which will become operative as of January 1, 2014; (2) of the employee’s potential eligibility for federal assistance if the employer’s health plan doesn’t meet affordability and minimum value criteria under PPACA and if employee household income is below certain thresholds; and (3) that employees may lose the employer’s contribution to health coverage if they purchase health insurance through the Health Insurance Marketplace.
An employer offering retiree prescription drug coverage that is at least as valuable as Medicare Part D coverage is currently entitled to a federal retiree drug subsidy. Employers can claim a deduction for the entire cost of providing the prescription drug coverage even though a portion of the cost is offset by the subsidy they receive. The ACA repeals the current rule permitting deduction of the portion of the drug coverage expense that is offset by the Medicare Part D subsidy.
Requires employers to report the cost of coverage under an employer-sponsored group health plan. Reporting the cost of health care coverage on the Form W-2 does not mean that the coverage is taxable: the value of the employer’s excludable contribution to health coverage continues to be excludable from an employee’s income, and it is not taxable. This reporting is for informational purposes only and will provide employees useful and comparable consumer information on the cost of their health care coverage.
Up to 4 million small businesses are eligible for tax credits to help them provide insurance benefits to their workers. The first phase of this provision provides a credit worth up to 35% of the employer’s contribution to the employees’ health insurance. Small non-profit organizations may receive up to a 25% credit.
Effective for health plan years beginning on or after September 23, 2010
Under the new law, young adults are allowed to stay on their parent’s plan until they turn 26 years old. (In the case of existing group health plans, this right does not apply if the young adult is offered insurance at work). Check with your insurance company or employer to see if you qualify.
To ensure premium dollars are spent primarily on health care, the new law generally requires that at least 85% of all premium dollars collected by insurance companies for large employer plans are spent on health care services and health care quality improvement. For plans sold to individuals and small employers, at least 80% of the premium must be spent on benefits and quality improvement. If insurance companies do not meet these goals because their administrative costs or profits are too high, they must provide rebates to consumers.
Insurers will be prohibited from dropping or limiting coverage because an individual chooses to participate in a clinical trial. This applies to all clinical trials that treat cancer or other life-threatening diseases.
Requires disclosure of financial relationships between: health entities, including physicians, hospitals, pharmacists and other providers, and manufacturers and distributors of covered drugs, devices, biologicals and medical supplies.
Requires the Centers for Medicare & Medicaid Services (CMS) to publicly report performance data about physicians and other health care professionals enrolled in the Medicare Program. Physician Compare makes this performance data available to Medicare beneficiaries to help them make informed choices about health care they get from Medicare providers.
Effective for health plan years beginning on or after September 23, 2010
In the past, insurance companies could search for an error, or other technical mistake, on a customer’s application and use this error to deny payment for services when he or she got sick. The new law makes this illegal. After media reports cited incidents of breast cancer patients losing coverage, insurance companies agreed to end this practice immediately.
Under the health care law, states that apply receive federal grants to help set up or expand independent offices to help consumers navigate the private health insurance system. These programs help consumers file complaints and appeals; enroll in health coverage; and get educated about their rights and responsibilities in group health plans or individual health insurance policies. The programs also collect data on the types of problems consumers have, and file reports with the U.S. Department of Health and Human Services to identify trouble spots that need further oversight.
Effective for new plans beginning on or after September 23, 2010
Under the health care law, insurance companies’ use of annual dollar limits on the amount of insurance coverage a patient may receive is restricted for new plans in the individual market and all group plans. In 2014, the use of annual dollar limits on essential benefits like hospital stays will be banned for new plans in the individual market and all group plans.
A new provision will tie physician payments to the quality of care they provide. Physicians will see their payments modified so that those who provide higher value care will receive higher payments than those who provide lower quality care.
Tax credits to help the middle class afford insurance will become available for those with income between 100% and 400% of the poverty line who are not eligible for other affordable coverage. (In 2010, 400% of the poverty line comes out to about $43,000 for an individual or $88,000 for a family of four.) The tax credit is advanceable, so it can lower your premium payments each month, rather than making you wait for tax time. It’s also refundable, so even moderate-income families can receive the full benefit of the credit.
As Medicaid programs and providers prepare to cover more patients in 2014, the ACA requires states to pay primary care physicians no less than 100% of Medicare payment rates in 2013 and 2014 for primary care services. The increase is fully funded by the federal government.
The law establishes a national pilot program to encourage hospitals, doctors and other providers to work together to improve the coordination and quality of patient care. Under payment “bundling,” hospitals, doctors and providers are paid a flat rate for an episode of care rather than the current fragmented system where each service or test or bundles of items or services are billed separately to Medicare.
Health care remains one of the few industries that relies on paper records. The new law institutes a series of changes to standardize billing and requires health plans to begin adopting and implementing rules for the secure, confidential, electronic exchange of health information. Using electronic health records will reduce paperwork and administrative burdens, cut costs, reduce medical errors and, most importantly, improve the quality of care.
Effective for payments for discharges occurring on or after October 1, 2012
The law establishes a hospital Value-Based Purchasing program (VBP) in Original Medicare. This program offers financial incentives to hospitals to improve the quality of care. Hospital performance is required to be publicly reported, beginning with measures relating to heart attacks, heart failure, pneumonia, surgical care, health-care associated infections and patients’ perception of care.
To help understand and reduce persistent health disparities, the law requires any ongoing or new federal health program to collect and report racial, ethnic, and language data. The Secretary of Health and Human Services will use this data to help identify and reduce disparities.
The new law provides incentives for physicians to join together to form “Accountable Care Organizations.” In these groups, doctors can better coordinate patient care and improve the quality, help prevent disease and illness, and reduce unnecessary hospital admissions. If Accountable Care Organizations provide high quality care and reduce costs to the health care system, they can keep some of the money that they have helped save.
Administrative funding becomes available October 1, 2011
The Independent Payment Advisory Board will begin operations to develop and submit proposals to Congress and the President aimed at extending the life of the Medicare Trust Fund. The Board is expected to focus on ways to target waste in the system, and recommend ways to reduce costs, improve health outcomes for patients and expand access to high-quality care.
In 2011, seniors who reach the coverage gap will receive a 50 percent discount when buying Medicare Part D covered brand-name prescription drugs. Over the next ten years, seniors will receive additional savings on brand-name and generic drugs until the coverage gap is closed in 2020.
The Community Care Transitions Program helps high-risk Medicare beneficiaries who are hospitalized avoid unnecessary readmissions by coordinating care and connecting patients to services in their communities.
The law establishes a new Center for Medicare & Medicaid Innovation that will begin testing new ways of delivering care to patients. These new methods are expected to improve the quality of care and reduce the rate of growth in costs for Medicare, Medicaid and the Children’s Health Insurance Program (CHIP).
Current efforts to fight fraud have returned more than $2.5 billion to the Medicare Trust Fund in FY 2009 alone. The new law invests new resources and requires new screening procedures for health care providers to boost these efforts and reduce fraud and waste in Medicare, Medicaid and CHIP.
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.
Tax deductions for executive pay at medical insurance companies will be limited to prevent corporate officers from personally benefiting from expanded enrollments. The rule applies to insurers that earn 25 percent or more of their premium revenue from health plans, cutting the deduction to $500,000 from $1 million on income per employee.
Today, Medicare pays Medicare Advantage insurance companies over $1,000 more per person on average than is spent per person in Original Medicare. This results in increased premiums for all Medicare beneficiaries, including the 77% of beneficiaries who are not currently enrolled in a Medicare Advantage plan. The new law levels the playing field by gradually eliminating this discrepancy. People enrolled in a Medicare Advantage plan will still receive all guaranteed Medicare benefits, and the law provides bonus payments to Medicare Advantage plans that provide high quality care.
The law allows states that have, or plan to implement, measures that require insurance companies to justify their premium increases to be eligible for $250 million in new grants. Insurance companies with excessive or unjustified premium increases may not be able to participate in the new Affordable Insurance Marketplaces in 2014.