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Health Reform Overview Prepared by Cornerstone Government Affairs for the Association of Schools of Public Health


Health Reform Overview Prepared by Cornerstone Government Affairs for the Association of Schools of Public Health Updated March 30, 2010 – PowerPoint PPT presentation

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Title: Health Reform Overview Prepared by Cornerstone Government Affairs for the Association of Schools of Public Health

Health Reform Overview Prepared by Cornerstone
Government Affairs for the Association of Schools
of Public Health
  • Updated March 30, 2010

  • This presentation attempts to provide an early
    overview of a large and complex piece of new
    legislation. It was based on Congressional and
    non-Congressional sources which are listed at the
    end. While every attempt was made to ensure
    accuracy, we are not responsible for statements
    which may be in error. As clarifications or
    additional information become available, a
    revised version of this presentation will be
  • Cornerstone Government Affairs (March 30, 2010)

Patient Protection and Affordable Care Act (HR
3590, P.L. 111-148)
  • Approved by House of Representatives on Sunday,
    March 21st
  • Passed by a margin of 219-212
  • All 178 Republicans and 34 Democrats voted no

Reconciliation Act (HR 4872)
  • House and Senate passed Reconciliation Act of
    2010 containing fixes to reform legislation on
    Thursday, March 25th
  • House passed HR 4872 by a margin of 220-207
  • Senate passes bill 56-43, with 3 Democrats voting

Health Reform Overview
  • Covers an additional 32 million people, mostly
    through premium subsidies and expansion of
  • Costs approximately 938 billion over 10 years
    according to CBO
  • Will reduce federal deficits by 143 billion over
    that period
  • Will reduce deficits by 1.2 trillion over the
    following decade
  • Does NOT include the Medicare doc fix which is
    estimated to cost over 200 billion over 10

Immediate Effects
  • Insurance companies can no longer drop people
    from coverage after getting sick
  • Bars insurance companies from discriminating
    against children under the age of 19 with
    pre-existing conditions
  • Young adults can stay on parents plan until the
    age of 26
  • Creates high-risk pool for adults with
    pre-existing conditions without coverage

Immediate Effects
  • Temporary reinsurance program created to cover
    early retirees aged 55-64 (expires in 2014)
  • 250 rebate given to seniors who fall into
    Medicare Part D doughnut hole
  • Tax credits become available for small businesses
    to cover employees
  • 10 tax is levied for tanning services

Individual Mandate
  • Requires all U.S. citizens to have health
  • Exemptions granted for financial hardship,
    religious objections, American Indians, those
    without coverage for less than three months
  • Penalties take effect beginning in January 2014

Individual Mandate
  • Penalty is the greater of 695 per year (up to
    three times that amount for a family) or 2.5 of
    household income
  • Penalty phased in accordingly
  • 95 in 2014 (or 1 taxable income)
  • 325 in 2015 (or 2 taxable income)
  • 695 in 2016 (or 2.5 taxable income)

Employer Requirements
  • Business with fewer than 50 employees exempt from
    any penalty
  • Employer with more than 200 employees must enroll
    each in a health insurance plan
  • Employers with more than 50 employees that offer
    coverage and have one full-time employee
    receiving a premium tax credit must pay the
    lesser of 3,000 for each employee receiving a
    premium credit or 2,000 per employee
  • Effective January 2014

Expansion of Medicaid
  • Expands Medicaid to cover all individuals under
    the age of 65 up to 133 of the federal poverty
    level (FPL)
  • States will receive 100 of funds for newly
    eligible enrollees from federal government from
  • 95 in 2017, 94 in 2018, 93 in 2019, 90 in
    2020 and thereafter

Childrens Health Insurance Program
  • States must maintain eligibility levels for CHIP
    through Sept. 30, 2019
  • Between 2014 and 2019 states will receive 23
    increase in CHIP federal match

Premium and Cost-sharing Subsidies
  • Limits availability of premium credits and
    cost-sharing to legal US citizens purchasing in
    newly-created national exchange
  • Those between 133-400 FPL (about 88K for family
    of four) are eligible for premium credits
  • Cost-sharing subsidies available for those making
    100-400 FPL

Premium Subsidies
  • Credits are calculated on sliding scale
  • Begin at 2 of income for those at 100 FPL
  • Credits cap at 9.8 of income for those at
    300-400 FPL
  • Subsidies available beginning in January 2014

Limiting Out-of-Pocket Costs
  • Out of pocket maximums (5,950 for individuals,
    11,900 for families) reduced to one third for
    those with income between 100-200 FPL
  • Reduced to one half for those earning between
    200-300 FPL
  • Reduced to two thirds for those earning between
    300-400 FPL

Small Business Tax Credits
  • Tax credits provided for small businesses with
    fewer than 25 employees providing health
    insurance for workers with average income less
    than 50K
  • 2010-2013, federal government provides tax credit
    up to 35 of employers contribution if employer
    pays 50 of premium cost
  • 2014 and beyond, government provides tax credit
    of up to 50 of employers contribution if
    purchasing through the National Exchange

Small Business Tax Credits
  • Tax-exempt small businesses eligible for tax
    credits up to 25 of employers contribution
    towards insurance premium
  • Credits phased out as firm size and employee
    wages increase
  • Full credits available to businesses with fewer
    than 10 employees earning an average of less than

Insurance Exchanges
  • Create state-based insurance exchanges called the
    American Health Benefit Exchanges and Small
    Businesses Health Options Programs
  • Exchange only available to small businesses with
    fewer than 100 employees. Businesses with more
    than 100 employees are eligible after 2017
  • Only legal U.S. citizens able to purchase in
  • Exchanges open in 2014
  • Federal support also offered for non-profit
    member run insurance cooperatives

Benefits Within National Exchange
  • Qualified health plans offered in National
    Exchange must provide essential health benefits
    which include cost sharing limits
  • Deductibles in small group market cannot exceed
    2,000 for an individual and 4,000 for a family
  • Out-of-pocket requirements cannot exceed those in
    HSA (5,950 for individual and 11,900 for family)

Benefits Within National Exchange
  • Coverage offered at four levels with actuarial
    value values defining how much insurers pay
  • Bronze plan provides essential health benefits
    and covers 60 of the benefit costs of the plan
  • Silver 70
  • Gold 80
  • Platinum 90

Disproportionate Share Hospital (DSH) Allotments
  • Starting in 2014, DSH payments reduced by 75,
    but payments are increased based on rates of
    uninsured and amount of uncompensated care
  • Aggregate DSH allotments reduced by
  • 500 million in 2014
  • 600 million in 2015
  • 600 million in 2016
  • 1.8 billion in 2017
  • 5 billion in 2018
  • 5.6 billion in 2019
  • 4 billion in 2020

Health Care Innovation
  • Creates a new Center for Medicare and Medicaid
    Innovation at CMS to develop and test innovative
    payment and delivery models
  • Accountable Care Organizations (ACOs), medical
    home models are eligible for receiving funds
  • Integrated delivery systems must achieve high
    quality of care and achieve savings
  • Pilot projects begin in 2012

Rural Protections
  • Extends floor on geographic adjustments to
    Medicare fee schedule to increase provider fees
    in rural areas
  • Boosts bonus payments for ground and air
    emergency services in rural areas
  • Expands eligibility and length of Rural Community
    Hospital Demonstration Program for two years
  • Extends outpatient hold harmless provision

Medicare Advantage Changes
  • Medicare Advantage (MA) plans in high-cost areas
    will receive 95 of Medicare fee-for-service
  • MA plans in lower-cost areas will see payments
    rise up to an additional 15 more than FFS rates
  • Phase in payment changes over three year period
    beginning in 2011
  • Bonuses given to MA plans receiving 4 or more
    start in current 5-star ranking system beginning
    in 2012

Fixing Medicare Part D Doughnut Hole
  • Seniors exceeding Part D coverage will receive a
    250 rebate in 2010
  • Beginning in 2011, seniors receive 50 discount
    on brand-name drugs and biologics purchased when
    entering the coverage gap.
  • 50 of discount funded by pharmaceutical
  • Discount increases to 75 after 2011 and will
    apply to generics

Elimination of Pre-existing Conditions
  • Discrimination against children under the age of
    19 with pre-existing conditions eliminated
  • Creates in 2010 a high-risk pool for those adults
    with pre-existing conditions to receive federal
  • High-risk pool eliminated in 2014 when insurers
    can no longer discriminate against individuals
    with pre-existing conditions
  • Bans gender rating, eliminating higher premium
    costs for women in the individual market

Prevention and Wellness
  • Creates a National Prevention, Health Promotion,
    and Public Health Council to coordinate
    prevention and wellness practices on federal
  • Establishes new mandatory spending in the form of
    a Prevention and Public Health Fund
  • 500 million in FY 10
  • 750 million in FY 11
  • 1 billion in FY 12
  • 1.25 billion in FY 13
  • 1.5 billion in FY 14
  • 2 billion in FY 15 and each year thereafter

Prevention and PH Fund Uses
  • For programs authorized by the Public Health
    Service Act, for prevention, wellness, and public
    health activities including prevention research
    and health screenings, such as the Community
    Transformation grant program, the Education and
    Outreach Campaign for Preventive Benefits, and
    immunization programs (Section 4002)
  • The fund is directly appropriated by this
    legislation, not just authorized.

Prevention and Wellness
  • Expands role of Community Health Centers to
    implement wellness programs for Medicare
  • Expands scope of Community and Clinical
    Preventive Services Task Forces
  • Creates grant program for school-based health
  • Expands oral health programs

Prevention and Wellness
  • Establishes community transformation grant
    program for State and local government agencies
  • Establishes demonstration program to provide
    recommended vaccines to more children,
    adolescents, and adults.
  • Reauthorizes section 317 immunization program
  • Establishes labeling requirements for
    restaurants, retail food establishments, and
    vending machines

Prevention and Wellness
  • Mandates the Secretary of HHS collect data on
    health disparities
  • Incentivizes employer-based wellness programs
  • Provides epidemiology and laboratory capacity
    grants for responding to public health
  • Funds a childhood obesity program
  • Fully covers proven preventive services and
    eliminates cost-sharing for preventive services
    in Medicare and Medicaid

Health Care Workforce
  • Creates a National Healthcare Workforce
    Commission to disseminate information on health
    care workforce supply and demand, as well as
    training and retention best practices
  • Establishes National Center for Workforce
  • Creates competitive health care workforce
    development grant program under HRSA to shore up
    workforce and state and local levels

Health Care Workforce
  • Establishes loan repayment program for pediatric
    specialists who commit to work in underserved
  • Creates a public health workforce recruitment and
    retention program offering loan repayments in
    exchange for service at a state, local, or tribal
    health department
  • Expands Public Health Service Corps
  • Provides mid-career training for public health
  • Loan repayment offered for allied health
    professionals employed at public health agencies

Health Care Workforce
  • Increases funding for National Health Service
  • Expands nurse retention and student loan programs
  • Establishes Regular Corps and a Ready Reserve
    Corps for service in time of national emergency
  • Creates grant programs to grow numbers of
    primary care, geriatric, oral health, and
    psychiatric workforce

Health Care Workforce
  • Authorizes advanced nursing education grants for
  • Expands loan repayment programs for people from
    disadvantaged backgrounds
  • Establishes a grant program aimed at promoting
    innovations in interdisciplinary care training
  • Establishes a new state grant program for early
    childhood home visitation under HRSA

Increased Transparency
  • Physician-owned hospitals that do not have a
    provider agreement will not be able to
    participate in Medicare
  • Drug, device, biological and medical supply
    manufacturers must report gifts to physicians,
    medical practices, or teaching hospitals
  • Physicians providing imaging services must offer
    in writing an alternative provider for that same

Increased Transparency
  • Establishes Patient-Centered Outcome Research
    Institute to compile comparative clinical
    outcomes research
  • Secretary will establish procedures for
    monitoring and screening CHIP, Medicaid, and
    Medicare providers

Making Medicines Affordable for Children in
Underserved Communities
  • Expands scope of existing 340B drug discount
  • Allows more Americans to have greater access to
    cheaper medicines

Revenue Provisions
  • Tax on Cadillac Plans that cost 10,200
    annually for an individual, 27,500 for families
    effective January 1, 2018
  • Limits Flexible Spending Account contributions to
    2,500 annually effective in 2013
  • Levies excise taxes on Pharmaceutical
    manufacturers beginning in 2011 in the amount of
    2.5 billion annually. Manufacturers pay based
    on market share
  • Levies excise tax on device manufacturers in the
    amount of 2 billion from 2011 2017, and 3
    billion annually thereafter. A 2.3 sales tax on
    devices is also enacted effective in 2013

Revenue Provisions
  • Includes additional 0.9 Hospital Insurance tax
    on earned income for households earning over
    200K for individuals and 250K for
    jointly-filing couples
  • Includes a 3.8 Unearned Income Medicare
    Contribution to unearned income including
    interest, dividends, annuities, royalties, and
    rents for households earning over 200K for
    individuals and 250K for jointly-filing couples

Sources and Additional Info
  • Democratic Policy Committee
  • http//
  • http//
  • Kaiser Family Foundation, Focus on Health
    Reform Summary of New Health Reform Law
  • http//
  • Cornerstone Government Affairs Public Health and
    Workforce Side-by-side
  • http//
  • House Ways and Means Committee
  • http//
  • Department of Health and Human Services
  • http//
  • White House Reform Plan
  • http//