The Patient Protection And Affordable Care Act for Dummies

Jeanne Scotttalking-head-in-chief

AAHAM Exhibitor Fair (and Regional Meeting)

Sponsored by the Keystone and Philadelphia Chapters of

AAHAMA

Tuesday, March 23, 2010

Bush Signing Medicare Modernization Act,December 8, 2003

LBJ Signing Original

Medicare Act,July 30, 1965

Obama Signing:“Patient Protection &

Affordable Care for America Act,”

March 23, 2010

H.R. 3590 — the Patient Protection & Affordable Care Act

(PPACA)

Reconciliation: H.R. 4872 — the Health Care & Education Affordability Reconciliation Act of 2010

.

This is a really big [bleeping] deal!

The Individual Mandate Controversy

Individual Mandates• While Obama’s original plan & 2008 campaign promises did not include an individual mandate, the question of mandating that every American must have coverage or pay a penalty, is now one of the biggest challenges facing PPACA. •The private insurance industry, whether out of benign altruism or just plain good business has come full circle & now endorses the concept. Both AHIP & BCBSA have called for a mandate, as long as its is enforceable. (If the private sector plans get to enroll the now more than 50 million or so uninsured, who would now be able to afford -- through various proposed subsidies & tax incentives -- to buy health insurance, they would profit immensely.)•Ex-GOP Governors Mitt Romney & Arnold Schwarzenegger both proposed plans built on an individual mandate.

Oh Mitt, You Forgot that in this Modern World, Almost Everything You Say in Politics is Being Recorded by

Someone

"Some of my libertarian friends balk at what looks like

an individual mandate. But remember, someone has to pay for the health care that must, by law, be provided:

Either the individual pays or the taxpayers pay. A free ride

on government is not libertarian."

Mitt Romney, April 11, 2006 (while promoting his own health care reform package in Massachusetts which included an

individual mandate). In his Wall Street Journal Op-Ed

Republicans Backpedaling on the Individual MandateIn 1993, Republican Senators Orrin Hatch (Utah),

Chuck Grassley (Iowa) and Kit Bond (Missouri) along with 17 other co-signing GOP Senators [all of which have since left the Senate], introduced legislation

calling for an individual mandate as their alternative to the then pending Clinton health plan, Hillarycare. Their argument then was that requiring individuals to buy private insurance would address

the problem of the uninsured and preserve America’s private health care system.

Oops, now the three of them are spending time trying to explain away their 1993 positions in relation to their now opposition to the mandate: their response, “I’ve thought it over since then and I now think it is unconstitutional.”

INDIVIDUAL MANDATE

• Penalty: In 2014, $95 a year or 1% household’s income; in 2015, $325 or 2% of income; in 2016, $695 or 2.5% of income (with a maximum of $2,085 for a family).• Exemptions: American Indians; people with religious objections; people who can show financial hardship; people without coverage for less than three months; households with incomes below the tax-filing threshold — $9,350 for individuals and $18,700 for couples in 2009; households that would pay more than 8% of their income on premiums for the cheapest available health plan.

Gov. Mitt Romney publicly supported the individual mandate as a means of eliminating so-called “free riding” in the health care system. Romney claimed that “40% of the uninsured earned enough to buy insurance but had chosen not to do so.” Those earning 300% of the FPL and up represented about 19% of the “uncompensated care” in Massachusetts in 2007, the year the new Massachusetts mandate went into effect. It is now down to less than 5%.

Constitutionality of the “Individual Mandate”

Appeals have now been argued before three separate U.S. Circuit Courts of

Appeal, involving five decisions from the lower courts.So far there have been two appellate court decisions. In the

first, the U.S. Circuit of Appeals for the Sixth Circuit (Michigan, Ohio, Kentucky & Tennessee) upheld the “individual mandate” provision in PPACA, holding that the requirement that all Americans must have health insurance is a valid exercise by Congress of the Commerce Clause in the U.S. Constitution. In the second case, the Eleventh Circuit (Florida, Georgia, Alabama) held the mandate to be an unconstitutional exercise of Congressional authority.A decision is still pending in the 4th Circuits. All of these cases are expected to end up before the U.S. Supreme Court in 2012.

How the Requirement to Have Health Insurance Will

Work

How the Requirement to Have Health Insurance Will

Work

How the Requirement to Have Health Insurance Will

Work

The Employer Mandate Controversy

Major business groups have been virtually unanimous in their opposition to any

employer requirements, contributions, or

mandate to provide employees with health

insurance…

Employer MandatesBut the issue took a decidedly more interesting turn when Wal-Mart, the

nation’s largest private employer, came out in favor of just such a mandate.

Long viewed as an employment “Neanderthal,” Wal-Mart’s sudden “change

of heart” has triggered a conundrum for those opposed to an employer mandate. Far more controversial at this point is the issue of whether employers should be required to

pay something toward their employee health coverage or pay a fine or “tax” in

lieu of coverage.“We are for an employer mandate which is fair and broad in its coverage. … Any alternative to an

employer mandate should not create barriers to hiring entry-level employees.”

Wal-Mart Press Release, June 29, 2009

EMPLOYER MANDATE• Employers with 50+ full-time workers pay a

$2000 penalty per worker for not offering coverage. The first 30 employees are exempted from the penalty.*

• Employers with 50+ workers offering coverage may also pay a penalty if any of the workers obtain subsidies to buy insurance. The penalty would be $3,000 per employee receiving subsidized coverage, or $750 for each full-time worker in the company, whichever is less.

*The first 30 employees are exempted while calculating the penalty. For example, an employer with 53 workers would pay the

penalty for 23 workers, or $46,000.

EMPLOYER SUBSIDIES• Employers with 25 or fewer

workers and average wages of $50,000 or less would qualify for tax credits. Employers with 10 or fewer workers and average wages of less than $25,000 can get the full credit — up to 35% of premium costs between 2010 and 2013 and 50% thereafter. The credit would phase out as firm size and average wage increases.

• The federal government would cover 80% of the cost of a retiree’s medical claims of more than $15,000 through 2013, with a cap at $90,000 — at which point the employer’s plan would pay the rest

In his Massachusetts plan, Mitt Romney supported paying

subsidies and giving tax breaks to employers but did not want a

mandate.

Tea-Partiers Sore Throat

INSURANCE EXCHANGE(S)• States would form their own exchanges. Several states could join together to form a regional exchange.• Open to people who do not have qualifying coverage through an employer or a public program.• Open to employers with 100 or fewer workers. Starting in 2017, states could allow employers with more than 100 employees to participate in the exchange.

Obama’s unoriginal idea of using insurance exchanges was actually built on the Utah Health Exchange, a model promoted by

George W. Bush’s last Secretary of Health and Human Services, former Utah

Governor Mike Leavitt. Just another good Republican idea co-opted by a Democrat,

but now condemned by the GOP. In essence, Obama's plan would have

retained the private insurance system but with greater potential controls.

Exchanges and Subsidies

MEDICARE DRUG COVERAGE

Currently, older Americans in the coverage gap pay 25% of the cost of their drugs up to $2,830 in out-of-pocket spending, then the full cost of drugs up to $6,300 — a $3,470 “doughnut hole” — after which Medicare catastrophic coverage kicks in and seniors pay only 5% of the cost of additional drugs.

Gives a one-time, $250 rebate to people who face the coverage gap in 2010 Beginning on January 1, 2011, drug makers would provide 50% discounts on brand-name drugs & biologics that low- and middle-income beneficiaries have to pay for themselves once the coverage gap begins.

By 2020, the government would pay to provide up to 75% discount on brand-name and generic drugs, eventually closing the “doughnut hole.”

MEDICARE DRUG COVERAGE