REMINDER: TIME LINE FOR HEATHCARE BILL
Now that the Affordable Care Act has been ruled
constitutional by the U.S. Supreme Court, it might be useful to again review
the timeline of its provisions. Absent
any further congressional action, the law’s original timelines remain intact as
follows:
Already in Effect:
2010
- Sets
up high risk insurance pool to provide affordable coverage for uninsured
people with medical problems.
- Bars
lifetime dollar limits on insurance coverage.
- Provides
tax credits to help small businesses (up to 25 employees) provide workers
with insurance.
- Requires
insurance plans to maintain dependent coverage for children until they
turn age 26. Prohibits insurers
from denying coverage to children because of pre-existing health problems.
2011
- Provides
Medicare recipients in the prescription drug coverage gap (doughnut hole) with
discounts. By 2020 seniors pay
just 25% of the cost of brand name and generic drugs.
2013
- Limits
medical expense contributions to tax-sheltered flexible spending accounts
(FSA’s) to $2,500 a year, with annual increases based on cost-of-living
adjustments.
- Increases
Medicare payroll tax on couples making more than $250,000 and individuals
making more than $200,000. Adds a
new tax of 3.8% on income from investments.
- Sets
up a program to create nonprofit co-ops.
2014
- Prohibits
insurers from denying or limiting coverage based on pre-existing
conditions.
- States
create health insurance exchanges – supermarkets for individuals and small
businesses to buy coverage (already
approved and being set up in CA).
- Provides
income-based tax credits for most consumers in the exchanges.
- Expands
Medicaid to cover low-income people up to 133 percent of the poverty line (states may opt out of this provision,
per the Supreme Court’s decision).
- Requires
citizens and legal residents to have health insurance, with exceptions, or
pay a fine (the individual mandate,
ruled constitutional as a tax by the Supreme Court’s decision)
- Penalizes
employers with more than 50 workers if insurance is not offered or if
their workers get coverage through the exchange and receive a tax credit.
2018
- Imposes
a tax on so-called Cadillac health plans, defined as employer-sponsored
health insurance worth more than $10,200 for individual coverage, $27,500
for a family plan (probably affects
public sector employers more than others)
2020
- Doughnut
hole coverage gap in Medicare prescription benefit is phased out.
As is readily apparent, this law changes the landscape of
purchasing and paying for health insurance for a many of Americans. The major “shockwave” really occurs in 2014,
less than two years from now. During
that year, exchanges must be up, running, and ready for subscribers to enroll,
the IRS must be ready to deal with most of the tax provisions in the law,
states must opt in or out of the new Medicaid eligibility rules, and last but
not least, most individuals and small businesses must purchase health insurance. Clearly, 2014 will be a stellar year.
Assuming everything in the previous paragraph occurs without
a hitch, everyone has a break until the last of the law’s provisions are
implemented in 2018 and 2020. What the
ultimate cost (or savings, as some advocate) will be of this law, is
undetermined at this point. Stay tuned.
Mike DeMore has practiced as a healthcare consultant for
over 30 years and is currently the President of Catalina Insurance Solutions,
Inc., a full service agency in Southern California.
