2013: Changes Ahead in Health Care
After 3 years of rumbling court fights, legislative threats and golden promises, the Affordable Care Act (ACA) moves into first gear and begins 2013 with new taxes and a few changes to our health care system. But the speed picks up sharply October 1 when people will begin test driving the new health insurance exchanges, the cornerstone of the ACA.
October 1, 2013 is the official kick-off date for the health insurance exchanges to begin offering health insurance plans that will take affect Jan. 1, 2014. The people qualified to buy insurance through the exchange are:
- new Medicaid enrollees (people earning less than 138% of the Federal Poverty Level (FPL)
- people qualified to receive government subsidies ( families of 4 annually earning up to 4 times the FPL which, in 2012, would be $92,200)
- employees of businesses who can’t or won’t provide minimum health insurance coverage
- small businesses seeking health insurance for their employees
- self-employed individuals
As required by the ACA, March 1 was to be the deadline this year for employers to inform their employees of the exchange and the new options available to them under the ACA. However, the Labor Department, has delayed this deadline until later this year. At that time, employees must be told in writing the percentage of their company-provided health insurance they’ll be responsible for in the coming year. If their share is more than 40%, or more than 9.5 percent of the employee’s household modified adjusted gross income, employees may be eligible to purchase subsidized health insurance through the exchange.
The health care reform law forces businesses, particularly small businesses, to make critical decisions that could result in major changes to employee health care. The big date for them is June 30. The number of full time employees employed on that date will determine a business’s status under the ACA. Small businesses, defined by the law as having less than 50 full time employees including full-time equivalents (FTEs), are exempt from providing the mandatory health benefits required by the law.
Full time employees, according to the ACA, work 30 or more hours a week/120 hours a month. A company’s FTE number is calculated by adding the number of hours all part-time employees work in a month divided by 120. If a small business does provide health insurance, it still must conform to most of the minimum standards as defined by the ACA. Businesses with more than 50 employees including FTEs face hefty penalties if they don’t provide health insurance or if the insurance they provide doesn’t meet ACA guidelines.
Other changes scheduled in health care this year are, for many, welcomed ones:
- Seniors in the Medicare Part D doughnut hole will pay only 47.5% of the cost for brand name drugs and 79% for generics. However, the limit they must reach before they gain full coverage, $4750.00, will be computed using the full retail cost of the drugs.
- Medicaid patients should find more doctors willing to accept them as patients. Starting January, 2013 and continuing through 2014, Medicaid doctors will be reimbursed at the level Medicare doctors are paid.
- Sick people will be covered by their health insurance plans for up to $2 million in medical expenses this year, compared to last year’s $1.25 million.
- Everyone, sick or healthy, will cheer the requirement that health insurers provide a clear easy-to-understand summary of their health care plans’ benefits and coverage. In addition, each summary must conform to a standard form to make it easy for prospective buyers to choose between competing health care plans. Also, a glossary of the terms used must accompany each plan summary, enabling readers to understand health insurance jargon.
These are the scheduled changes to health care we’ve been told to expect. However, with all the legal wrangling, political maneuvering, and sheer enormity of what is being attempted here, some unscheduled surprises are sure to occur. Look for my predictions in the next blog, Health Care in 2013: the Reality.