Posts Tagged ‘affordable care act’

Obamacare, Affordable Care Act, California

Ready or not here it comes. The first stages of implementation of the Affordable Care Act are only a few weeks away. Its goal is to provide health care coverage to some 55 million Americans who currently have no health coverage and to expand coverage to those who are underinsured. This monumental plan takes effect January 1, 2014.

Universal coverage is the goal of the plan and will be attained in two ways. First is the individual mandate which requires anyone without any type of health care coverage either through the government or an employer, to purchase an individual policy or face a financial penalty, referred to as a tax. The second way is that employers of more than 50 full-time workers will be required to provide insurance or pay a penalty of $2,000 per worker. If you are one of the millions covered by employer purchased insurance plans, Medicare or Medi-Cal you need not make any changes.

Those who have no employer offered health insurance and thus have to purchase their own coverage may see an increase in rates next year, but it is projected that almost half of these people will be eligible for tax credits to offset the increased premiums. Health insurance marketplaces called exchanges will allow consumers to compare costs and benefits among the available plans and to see if they qualify for tax credits to offset the price of their insurance premiums. These new plans are, for the most part, private (not public) and will compete to earn your business based on price, benefits and quality of service.

You can enroll beginning October 1 at the official website at http://www.coveredca.com, or by telephone at 888-975-1142 toll free.

People with incomes between $23,000 and $94,000 for a family of four, can receive financial help on a sliding scale to help offset costs. The same help is available to single individuals earning up to $46,000.

Those with very low incomes will be enrolled in Medicaid (Medi-Cal in California). As of January 1, 2014 Medi-Cal eligibility income levels will rise to $15,900 for individuals and $23,550 for families.

The first open enrollment period will last from October 1, 2013 to March 1, 2014. One may sign up via the internet, telephone, mail, or in person at designated centers. Once enrolled, it could take several weeks for the new coverage to take effect.

The law states that people cannot be denied coverage or charged higher premiums because of preexisting conditions. However, premiums may vary depending on age, tobacco use, geographic location and family size.

The new law requires that insurance policies cover the following 10 essential benefits:

– Hospitalization and rehabilitation services.

– Outpatient care (office visits) and emergency care.

– Prescription drugs and laboratory services.

– Preventative (wellness) care and mental health services.

– Pediatric and maternity/newborn care.

The law also eliminates lifetime limits on medical expenses, prohibits insurers from dropping or denying coverage, provides for your child to be covered on your policy until age 26, and caps annual out of pocket expenses up to an estimated $6,400 for individuals and $12,800 for families.

This is a monumental change in health care coverage. Soon there will be a significant change in health care delivery. Stay tuned.

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In a previous column, I explained the various components of the Affordable Health Care Act. Now, I would like to give my perspective on this politically controversial plan.

I’ve seen a lot of changes to health care during my 40 years of medical practice. Needless to say, we’ve come a long way, but we still have a long way to go.

The provision of health care today, as we know it, is not sustainable. It worked well for many decades but needs drastic changes beginning now and into the future. To not change the way health care is delivered will bankrupt our nation.

It is that realization that makes me able to accept the new health care act, even with potential faults and uncertainties. No alternative plan has been offered to the public, so I am hopeful that this act of Congress will be the beginning of a change that is so desperately needed for our health care delivery system.

I want to be clear that I strongly believe that we, as a compassionate and caring society, ought to make sure that every citizen has the right to health care. How we can actually provide it and pay for it will be the biggest of uncertainties.


A recap

Regarding the Affordable Care Act, I previously mentioned some changes in health insurance regulation that have already taken place and some that will occur by 2014 (“Many parts to federal health care law,” Page 10, Aug. 3).

These include the elimination of preexisting conditions as a barrier to obtaining insurance, allowing children of policy holders to be covered until they are 26 years old, covering more preventative care and eliminating lifetime limits on how much in benefits insurance will pay.

These great new concepts should have been implemented years ago.


Health insurance required

Under the new law, most Americans will be required to have health insurance by 2014. Low- and middle-income families will be eligible for tax credits and subsidies to help pay the insurance premiums, unless they are covered by affordable insurance through an employer.

A potential problem here is that under the provisions of the law, some working-class families could be unable to afford family coverage offered by their employers. I am hopeful that under the new law they will be eligible for government subsidies to purchase their own insurance through the newly-created insurance exchanges.

It is also possible that companies expecting increased insurance premium costs may raise their employees’ deductibles and co-payments. Small businesses will be eligible for tax credits to help cover their workers, and yet it is reported that some small companies are thinking of dropping health insurance altogether. However, if that were to happen, those affected employees could buy coverage through insurance exchanges.


Possible scarcity of doctors

Another problem is that about 30 million citizens will be newly covered by health insurance, and there won’t be enough doctors to meet their needs. The Association of American Medical Colleges estimates that in 2015, the country will have about 62,000 fewer physicians than it needs.

The new law will attempt to forgive medical students of burdensome loans and reimburse higher Medicare rates to doctors who work in underserved areas.

Initially, it may be very difficult for the newly insured to find primary-care doctors, causing long waiting lists and overused emergency rooms and possibly driving some people with insurance to forgo needed care.

I envision that more treatment of patients will have to be done by non-physician providers, such as nurses and nurse practitioners, certified assistants and home health care aides.


Medicaid expanded

The new law expands Medicaid, the government health insurance program for the poor, to cover about 16 million citizens who will be newly enrolled in the program.

Each state was given the option of whether to participate in this expansion of coverage for Medicaid patients. States that participate will receive full financing from the federal government to fund the newly insured. In states that don’t participate, there could remain a number of our nation’s poor without coverage.

Also, the reimbursement to health care providers from Medicaid is so low that many providers may not want to accept Medicaid patients.

On top of this, and not covered by the new law, all physicians face a 32 percent cut in Medicare rates at the end of this year.


Hospitals affected

Hospitals have major concerns, too. They are scheduled to receive decreased reimbursements from Medicare and Medicaid for the uncompensated care they provide. The federal government now spends $20 billion annually to hospitals to help cover costs of the uninsured and illegal immigrants, neither of whom, by law, can be turned away from the doors of a hospital.

Under the new law, eventually one half of that reimbursement to hospitals will cease. Hopefully, the number of uninsured patients will decrease in proportion so as not to further financially burden the hospitals.


Who will pay

Last is the concern for how the new law will be financed.

Mostly, there will be new taxes. Individuals who choose not to buy insurance and employers who don’t offer it will pay billions of dollars in penalty taxes. Individuals making more than $200,000 and couples making more than $250,000 will pay increased Medicare tax on wages and an additional 3.8 percent on investment income.

Tanning salons, insurance and drug companies, and medical device manufacturers will pay more taxes. Individual Flexible Spending Account contributions will be lowered and medical-dental income tax write-off thresholds will be increased.

Hopefully, these changes will be offset by new insurance policies that have lower deductible costs and cover more care than was previously provided, thus lessening out-of-pocket expenses.

In summary, my opinion of the Affordable Health Care Act is that it does offer many improvements in the delivery of health care in general and will offer this care to many who now lack it. But who provides the care, how much it will ultimately cost, how highly we will be taxed for it and how much new bureaucracy will be created to administer it are all questions that remain to be answered.

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I would like to offer my interpretation of the federal government’s Affordable Care Act, commonly called Obamacare.

First of all, insurance companies will be regulated. There will be coverage under the parent’s policy for children up to age 26. There will be no maximum limit on what an insurance company will pay for an individual’s lifetime of health care coverage, and preexisting illness cannot prevent one from obtaining health insurance.

Preventive care, such as mammograms, colonoscopies and other related services, will be covered by all insurance plans with no out-of-pocket expense.

A Prevention & Public Health Fund will be created to promote general health and wellness programs and initiatives to combat obesity and discourage tobacco use, alcohol and drug abuse and other unhealthy conditions.

Added taxes will be placed on pharmaceutical companies, medical device makers and the tanning booth industry.

The government will regulate and control reimbursement to health care providers — that is, physicians and hospitals.

A commission, acting independently of congressional control, will develop new ways of paying for medical care, with a move away from the fee-for-service model. One such new model is called the Accountable Care Organization. This would function somewhat like an HMO, except that ACO patients would not be required to stay within a network.

In addition, there is the “individual mandate” part of the act. This is a requirement that starting in 2014, all U.S. citizens will be required to purchase health insurance. It pertains mostly to the 30 million people who, for whatever reason, are without health insurance.

About half of these uninsured people have incomes high enough to buy health insurance through state-run health insurance exchanges. The others have incomes low enough that they will be covered by the existing state-run Medicaid programs.

For people who choose insurance through the exchange, premiums will be regulated by the government, which will also provide subsidies to help those who cannot afford to buy insurance. People who work for firms with 100 or fewer employees will also be able to purchase their own coverage through the exchanges. Undocumented immigrants will be barred from purchasing insurance through the exchanges.

There will be a penalty to individuals and companies who choose not to purchase health insurance. This penalty — which the law calls a tax — will top out at $695 per individual and $2,085 per family. There will be no criminal or civil action for refusing to pay the penalty; however, the IRS could withhold tax refunds from those who owe penalties.

In summary, the Affordable Care Act is an attempt by the federal government to help provide health insurance to the 30 million-plus citizens who have no coverage. It makes significant pro-consumer changes to existing health insurance regulations and makes an attempt at offering programs that could improve the health of most American citizens.

There are some major questions being asked about this law, such as: Will there be enough medical providers to care for the newly insured millions of Americans? Will there be enough money to finance this ambitious project, and where will it come from? What happens to states that don’t want to increase their Medicaid programs?

This is a large and complex law with many details that still needed to be worked out. In a future column, I will give my personal assessment of its major provisions.

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