President Obama Signs Health Reform Bill into Law


On Tuesday, March 23, President Obama signed into law the Patient Protection and Affordable Care Act.   The House passed this legislation by a 219-212 vote on March 21.  The Senate had passed it by a 60-39 margin on December 24.  The House concurrently passed financing amendments to the Act that the Senate considered under budget reconciliation rules allowing Senate action with a majority vote.   The Senate voted 56-43 to approve the House amendments (included in the Health Care and Education Reconciliation Act of 2010) on Thursday, March 25.  Final action was completed in the House later that evening on a 220-207 vote.  The Congressional Budget Office (CBO) estimates that 32 million uninsured legal residents of the United States will gain coverage as a result of this action. 

Beginning this year, the new law will require that insurers not exclude coverage of children due to pre-existing conditions, and that they let persons without employer coverage stay on their parents’ insurance until age 26.  Life-time coverage limits on any person and insurer rescissions for any person due to illness will be prohibited.  Other provisions to be implemented in 2010 include subsidies for high-risk pools for adults denied coverage due to pre-existing conditions,  tax credits for small businesses offering health insurance to their employees, rebates to Medicare beneficiaries for out-of-pocket drug costs and other discounts under Medicare Part D, new state Medicaid options for long term care services and supports for disabled persons, an extension of Money Follows the Person deinstitutionalization grants, grants for co-locating primary care and specialty care in community mental health settings, Medicaid coverage for tobacco cessation programs for pregnant women, and Medicaid global payment demonstration projects for safety net hospitals and systems. PCG clients are considering with us some of the policy, operational, and systems challenges these immediate changes present.

Provisions rolling out in 2011 and 2012 include those on coverage for “medical homes” (a primary care clinician concept already successfully tested in North Carolina and other states) coordinating care for individuals with complex medical needs, Medicaid incentives and grants for the prevention of chronic diseases, accountable care organization (ACO) payment incentive demonstration projects for pediatric care under Medicaid and CHIP, and Medicaid demonstration projects to evaluate the use of bundled payments for hospital and physician services in episodes of care around a hospitalization.   Other demonstration projects will test linking Medicare payments to quality and treatment outcomes rather than service volume, as a springboard to additional Medicare payment reform.   Medicare will implement a value-based purchasing program for hospitals in 2013 and Medicaid payment rates for primary care physician services will be upgraded in that year also to be ready for the bigger changes in Medicaid in 2014.  Last but not least, a consumer-directed public long term care insurance option will begin to collect premiums in 2011 and will begin to make direct cash benefit payments to consumers vested in the plan by 2016 to cover community living assistance services and supports through a model requiring the capabilities of entities such as PPL.  

Beginning in January 2014, most individuals who can afford health coverage will face tax penalties if they do not choose a health plan offering an essential benefits package.  Cost-sharing and some benefits may vary.   Most employers other than small businesses will be assessed fees per employee if they do not offer such health coverage, and employers will also be assessed fees if their financial contributions are insufficient to make coverage affordable to low-income employees and their dependents.   Many of the penalties are less severe on individuals but more severe on employers as a result of the House amendments.   Legal residents of a state with incomes up to 133 percent of the federal poverty level will be able to obtain coverage through the state Medicaid program, at 100 percent Federal financial participation (FFP) for the individuals added to the program as a result of the new law, and appropriate adjustments will be available also for individuals covered through health reform demonstration waiver programs.   Small businesses and legal residents with incomes between 133 and 400 percent of the federal poverty level will be able to obtain health insurance, with premium assistance for individuals and families on a sliding scale related to income, arranged through state-operated health insurance exchanges emulating the successful, first-of-its-kind, Massachusetts Health Connector.   Planning and development grant funding for such exchanges in all states will become available in March 2011.



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Categories:Public Partnerships | Health and Human Services


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