Posts Tagged ‘Health Care Reform’

Below are some highlights in phase two of the Health Care Reform Bill.

This is the year when our tax codes are going through significant changes driven by the health care law.  Overall, health care is getting more regulated, therefore it is forcing businesses, health care providers and insurance companies to spend more money on administration.  There are a lot of plans that are studying and “advising” on how to make health care better.  Sadly, those groups and advisory bodies should have been created prior to the enactment of this law.

• Minimum Medical Loss Ratio

Health plans, including grandfathered plans, must report on the share of premium dollars spent on medical care and provide consumer rebates for excessive medical loss ratios.

• Consumer Protection

Prohibits individual and group health plans from placing lifetime limits on the dollar value of coverage as well as rescinding coverage except in cases of fraud.  Annual limits are still in effect until 2014.  The provision also prohibits plans from denying children coverage based on pre-existing medical conditions.

• Standardizing the Definition of Qualified Medical Expense

Match the definition of qualified medical expenses for HSAs, FSAs and HRAs to the definition used by the IRS itemized deduction.  Over-the-counter medicine will now only be considered as medical expense of accompanied by a doctor’s prescription.

• Reporting Health Coverage Costs on Form W-2

Requires employers to disclose the value of the benefit provided by the employer for each employee’s health insurance coverage on the employee’s annual Form W-2.

• Creating Simple Cafeteria Plans

Creates a Simple Cafeteria Plan to provide a vehicle through which small businesses can provide tax‐free benefits to their employees.

• Appealing Health Plan Decisions

Appoints the right to appeal medical claim and/or policy decisions made by any health plan and the right to appeal decisions made by the health plan to an outside, independent decision-maker, no matter what state a person lives in or what type of health coverage a person may have. This includes, for the first time, new self-funded plans.

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The Patient Protection and Affordable Care Act was signed into law last week by the President. According to estimates it will afford coverage for an additional 31 million legal US residents; an estimated 24 million remains uninsured.

The most significant changes to the current health care system are:

1. Elimination of pre-existing conditions limitations.
2. Elimination of calendar-year and lifetime maximums.
3. Establishment of community rating with variation for age and geography.
4. Permitting young adults to remain on their parent insurance plan until age 26

The Congressional Budget Office (COB) estimates that the coverage provisions in the bill will cost 848 billion over ten years. Most of the major provisions will not take effect until January 1, 2014. Therefore, the current COB estimate uses 10 years of revenue to cover 6 years of coverage. In contrast, Republican staff on the Senate Budget Committee estimates that the total spending in the bill for 10 years will exceed 2.5 trillion.

The bill creates an estimated 150 new government entities to the teeming bureaucracy and countless new additions to the already overly complex tax codes.

More regulations will force everyone involved to spend more money on administration, driving the ultimate cost of health care even higher.

Large business entities and insurance companies will pay higher taxes, and those not providing insurance will be penalized. Small businesses, with less than 25 employees, will receive subsidies.

Extended coverage will be achieved by extending Medicaid for lower income individuals and families, providing tax credits for people above the Medicaid income threshold and by interstate insurance exchanges for the presently uninsured.

The law is promising protection from exorbitant out of pocket costs in the form of yearly caps on co-payments and co-insurance charges. However, it does not address the small print, such as usual and customary rates and non-covered (medically needed, but excluded from policy coverage) charges. It appear that the burden is entirely left on the insurance companies, but in reality the public will remain unprotected from overcharges and non-covered expenses. We are still at the mercy of deals made by insurance companies and large hospitals.

Physicians, the backbone of health care, are still affected in several ways. They are still forced to take contract of adhesions, limiting their ability to negotiate fees with insurance companies. They are still waiting for the permanent fix to the faulty Medicare formula, that was removed from the bill and replaced with a temporary fix. Tort reform, a major player in health care cost, hasn’t been addressed.

This legislation missed the mark of real reform. It only added several layers to an already fragmented system. It missed the opportunity to address real cost control, both by insurers and medical providers.

Regulatory authority between the federal and state governments is still divided and will be clarified via regulations in the coming years.

Regardless of what we think about this bill, it has been passed. Now it is time to move forward and make it work, hopefully, for all Americans.

Many important parts of the health care reform has been discussed in length by the media. In this media frenzy, among many other things, we learned about special interest, state specific spending and pork in the bill. In the mist of political badgering there was one important provision in this senate version of the bill, that I am sure everyone would like to see.
The amendment states that Congress should have exactly the same medical coverage that they impose on the citizens of the USA. Here’s a quote from the H. R. 3590 Patient Protection and Affordable Care Act:

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SEC. 1312. CONSUMER CHOICE.
(D) MEMBERS OF CONGRESS IN THE EXCHANGE.

(i) REQUIREMENT.—Notwithstanding any other provision of law, after the effective date of this subtitle, the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are:

(I) created under this Act
(II) offered through an Exchange established under this Act
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This amendment had been added by Republican Senator Tom Coburn, the Senate health committee voted 12-11 in favor of adding the provision, who used Congressman John Fleming’s two pages House Resolution 615 to add this amendment to the bill. Interestingly, both Coburn and Fleming are physicians who probably know a thing or two about health care.

The proposed Act is the Senate’s version and will be voted on by the House. As such, The House may remove this amendment from the final bill; however, you have to applaud the effort of Coburn and Fleming just to put this addition into the bill.