Making Sense of

Health Care Reform

The Patient Protection and Affordable Care Act

March 23, 2010

Materials compiled by

Judi King

Center for Labor Education and Research

Jefferson State Community College

Birmingham, Alabama

May 2010

Good Sources

to cut through the nonsense

Commonwealth Fund            www.commonwealthfund.org

Kaiser Family Foundation       www.kff.org

Politifact                       www.politifact.com

FactCheck                      www.factcheck.com

Department of Health

  and Human Services          www.healthreform.gov

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Health Care Reform:  What’s happening now

March 23, 2010                

ü Bill signed into law

June 2010 (90 days)     

ü National high risk pool for those with pre-existing conditions who cannot get insurance.

ü Reinsurance program to encourage employers to provide insurance for retirees 55-64.

September 2010 (6 months)

ü Eliminate pre-existing condition exclusion for children under 19.

ü Allow children under age 26 to stay on parents’ insurance.

ü Elimination of recission.

ü Elimination of lifetime cap on benefits.

ü Tax credits for small business.

ü New group and individual plans must provide free preventive services.  (Medicare follows in 2011.)

ü Insurers must provide percentage of premiums spent on non-medical costs.  In 2011, will be required to rebate amount over 15% (large group plans) to consumers.

By end of year

ü $250 rebate for seniors who hit the “doughnut hole.”

ü Insurers cannot deduct more than $500,000 for executive and managerial pay.

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March 23, 2010         

ü Bill signed into law

June 2010 (90 days)   

ü National high risk pool for those with pre-existing conditions who cannot get insurance.

ü Reinsurance program to encourage employers to provide insurance for retirees 55-64.

September 2010 (6 months)

ü Eliminate pre-existing condition exclusion for children under 19.

ü Allow children under age 26 to stay on parents’ insurance.

ü Elimination of recission.

ü Elimination of lifetime cap on benefits.

ü Tax credits for small business.

ü New group and individual plans must provide free preventive services.  (Medicare follows in 2011.)

ü Insurers must provide percentage of premiums spent on non-medical costs.  In 2011, will be required to rebate amount over 15% (large group plans) to consumers.

By end of year

ü $250 rebate for seniors who hit the “doughnut hole.”

ü Insurers cannot deduct more than $500,000 for executive and managerial pay.

The Mandate:  2014

ü Businesses with more than 50 employees must offer health insurance or pay a fine.

ü Individuals must have health insurance or face a fine.

ü Subsidies will be available to help lower-income earners pay premiums.

ü Medicaid expanded to cover adults without children.

ü All pre-existing conditions exclusions eliminated.

ü Annual limits on health insurance expenses eliminated.

ü Insurance exchanges introduced.

ü Government establishes guidelines for “essential benefits packages.”

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Tax Changes

ü Insurance companies cannot get deduction for executive and managerial compensation over $500,000 per year. (2010)

ü Over-the-counter drugs not prescribed by physician excluded from Flexible Spending Accounts (FSAs).  (2011)

ü Non-medical distributions from Health Savings Accounts face 20% penalty. (2011)

ü Income tax threshold for itemized medical expenses increases to 10% of Adjusted Gross Income. (2013)

ü Medicare tax on high earners (single $200,000; couple $250,000) increases by 0.9%. (2013)

ü High earners ($200,000/$250,000) face 3.8% tax on unearned income. (2013)

ü FSAs limited to $2500 per year. (2013)

ü Employers lose Medicare Part D tax deduction. (2014)

ü Insurers face tax on “Cadillac” health insurance plans: (2018)

§ $10,200   individual

§ $27,500   family

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