425 G. Street, Suite 405 Anchorage, Alaska 99501
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The material provided on this site is informational only and is not intended to provided legal or tax advice.
For detailed information please contact our office for a client specific review.
For detailed information please contact our office for a client specific review.
Alaska Employee Benefit Specialists
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Copyright AEBS 2010
| Health Care Reform: |
The Patient Protection and Affordable Care Act (Pub. L. No. 111-148) is a federal statute that was signed into law in the United States by President Barack Obama on March 23, 2010.
The Patient Protection and Affordable Care Act passed the Senate on December 24, 2009, by a vote of 60–39 with all Democrats and Independents voting for, and all Republicans voting
against. It passed the House of Representatives on March 21, 2010, by a vote of 219–212, with all 178 Republicans and 34 Democrats voting against the bill. At the time of the vote, there
were four vacancies in the House.
The bill was originally drafted by the Senate as an alternative to the Affordable Health Care for America Act, which was passed by the House two months earlier on November 7. However,
after the Democrats lost their super majority in the Senate on January 19, 2010 with the election of Scott Brown, the House decided to pass the Senate version and amend it with a third bill.
The Senate then passed a version of the third bill, amended to avoid application of the Byrd Rule, via the simple-majority reconciliation process. The amended third bill was then sent back to
the House, where it passed.
The Patient Protection and Affordable Care Act passed the Senate on December 24, 2009, by a vote of 60–39 with all Democrats and Independents voting for, and all Republicans voting
against. It passed the House of Representatives on March 21, 2010, by a vote of 219–212, with all 178 Republicans and 34 Democrats voting against the bill. At the time of the vote, there
were four vacancies in the House.
The bill was originally drafted by the Senate as an alternative to the Affordable Health Care for America Act, which was passed by the House two months earlier on November 7. However,
after the Democrats lost their super majority in the Senate on January 19, 2010 with the election of Scott Brown, the House decided to pass the Senate version and amend it with a third bill.
The Senate then passed a version of the third bill, amended to avoid application of the Byrd Rule, via the simple-majority reconciliation process. The amended third bill was then sent back to
the House, where it passed.
Provisions
H.R. 3590 is divided into 10 titles. The bill contains provisions that will go into effect immediately, on June 21, 2010 (90 days after enactment); on September 23, 2010 (six months after
enactment); and provisions that will go into effect in 2014. For simplicity, the amendments in the Health Care and Education Reconciliation Act of 2010 are integrated into this time line.
Below are some of the key provisions of the bill:
Effective at enactment
• The Food and Drug Administration is authorized to approve generic versions of biologic drugs and grant biologics manufacturers 12 years of exclusive use before generics can be
developed.
• The Medicare Improvement Fund is eliminated
• The Medicaid drug rebate for brand name drugs is increased to 23.1% (except the rebate for clotting factors and drugs approved exclusively for pediatric use increases to 17.1%), and the
rebate is extended to Medicaid managed care plans; the Medicaid rebate for non-innovator, multiple source drugs is increased to 13% of average manufacturer price
• Federal Coordinating Council for Comparative Effectiveness Research that was founded under the American Recovery and Reinvestment Act is eliminated.
• Creation of task forces on Preventive Services and Community Preventive Services to develop, update, and disseminate evidenced-based recommendations on the use of clinical and
community prevention services.
• The Indian Health Care Improvement Act is reauthorized and amended.
Effective June 21, 2010
• Adults with pre-existing conditions will be eligible to join a temporary high-risk pool, which will be superseded by the health care exchange in 2014.
Effective September 23, 2010
• Dependent children will be permitted to remain on their parents' insurance plan until their 26th birthday.
• Insurers are prohibited from charging co-payments or deductibles for preventive care and medical screenings on all new insurance plans.
• Individuals affected by the Medicare Part D coverage gap will receive a $250 rebate, and 50% of the gap will be eliminated in 2011. The gap will be eliminated by 2020.
• Insurers' abilities to enforce annual spending caps will be restricted, and completely prohibited by 2014.
• Insurers are prohibited from dropping policyholders when they get sick.
• Insurers are required to reveal details about administrative and executive expenditures.
• Insurers are required to implement an appeals process for coverage determination and claims on all new plans.
• Indoor tanning services are subjected to a 10% service tax.
• Enhanced methods of fraud detection are implemented.
• Medicare is expanded to small, rural hospitals and facilities.
• Non-profit Blue Cross insurers are required to maintain a loss ratio (money spent on procedures over money incoming) of 85% or higher to take advantage of IRS tax benefits.
• Companies which provide early retiree benefits for individuals aged 55-64 are eligible to participate in a temporary program which reduces premium costs.
• A new website installed by the Secretary of Health and Human Services will provide consumer insurance information for individuals and small businesses in all states.
• A temporary credit program is established to encourage private investment in new therapies for disease treatment and prevention.
H.R. 3590 is divided into 10 titles. The bill contains provisions that will go into effect immediately, on June 21, 2010 (90 days after enactment); on September 23, 2010 (six months after
enactment); and provisions that will go into effect in 2014. For simplicity, the amendments in the Health Care and Education Reconciliation Act of 2010 are integrated into this time line.
Below are some of the key provisions of the bill:
Effective at enactment
• The Food and Drug Administration is authorized to approve generic versions of biologic drugs and grant biologics manufacturers 12 years of exclusive use before generics can be
developed.
• The Medicare Improvement Fund is eliminated
• The Medicaid drug rebate for brand name drugs is increased to 23.1% (except the rebate for clotting factors and drugs approved exclusively for pediatric use increases to 17.1%), and the
rebate is extended to Medicaid managed care plans; the Medicaid rebate for non-innovator, multiple source drugs is increased to 13% of average manufacturer price
• Federal Coordinating Council for Comparative Effectiveness Research that was founded under the American Recovery and Reinvestment Act is eliminated.
• Creation of task forces on Preventive Services and Community Preventive Services to develop, update, and disseminate evidenced-based recommendations on the use of clinical and
community prevention services.
• The Indian Health Care Improvement Act is reauthorized and amended.
Effective June 21, 2010
• Adults with pre-existing conditions will be eligible to join a temporary high-risk pool, which will be superseded by the health care exchange in 2014.
Effective September 23, 2010
• Dependent children will be permitted to remain on their parents' insurance plan until their 26th birthday.
• Insurers are prohibited from charging co-payments or deductibles for preventive care and medical screenings on all new insurance plans.
• Individuals affected by the Medicare Part D coverage gap will receive a $250 rebate, and 50% of the gap will be eliminated in 2011. The gap will be eliminated by 2020.
• Insurers' abilities to enforce annual spending caps will be restricted, and completely prohibited by 2014.
• Insurers are prohibited from dropping policyholders when they get sick.
• Insurers are required to reveal details about administrative and executive expenditures.
• Insurers are required to implement an appeals process for coverage determination and claims on all new plans.
• Indoor tanning services are subjected to a 10% service tax.
• Enhanced methods of fraud detection are implemented.
• Medicare is expanded to small, rural hospitals and facilities.
• Non-profit Blue Cross insurers are required to maintain a loss ratio (money spent on procedures over money incoming) of 85% or higher to take advantage of IRS tax benefits.
• Companies which provide early retiree benefits for individuals aged 55-64 are eligible to participate in a temporary program which reduces premium costs.
• A new website installed by the Secretary of Health and Human Services will provide consumer insurance information for individuals and small businesses in all states.
• A temporary credit program is established to encourage private investment in new therapies for disease treatment and prevention.
| We have been following the health care debate closely for over a year and will continue to monitor it's implementation and provide insights on potential impacts to group and individual clients. The law has been designed to be implemented in stages and it will take several years before complete and total adoption. As the situation develops, we will provide frequent updates on how this will impact you and your health insurance coverage. |