HSA 4321 Lecture Notes - Lecture 4: Patient Protection And Affordable Care Act, Public Health Insurance Option, Health Insurance Mandate
Chapter 3- Patient Protection and Affordable Care Act
Legislative History
- Democratic House passed bill in Nov 2009
o 220-215 with 39 Dems opposed & 1 Rep supporting
o Included a public option
- Democratic Senate passed bill in Dec 2009
o Straight party-line vote
o Less sweeping than house version
- Scott Brown replaced E. Kennedy in Jan 2010
o Senate Democrats lost 60 vote filibuster proof majority
- House passed Senate bill intact March 23, 2010
Individual Mandate
- Requires most U.S. citizens and legal residents to have health insurance
o Penalty for going without coverage
o Subsidies for lower income people
o Reuies ualifig oeage
Why a Mandate?
- Want everyone to have coverage
- Eliminate pre-existing condition provisions
- Adverse Selection
o People know more about there likely use of health services than does an insurer
o Those most likely to use services are most likely to be the ones to obtain
coverage
Penalties
- Tax penalty of $695/year to a maximum of 3 times that amount per family, or 2.5% of
household income whichever is greater.
- Phased-in
o 2014-- $95/year or 1.0% of income
o 2015-- $325/year or 2.0% of income
o 2016-- $695/year or 2.5% of income
o Adjusted for cost of living after 2016
Subsidies
- Refundable, advanceable premium credits to individuals and families with incomes
between 133-400% of Federal Poverty Line
o Pegged to the seod loest ost sile pla i the aea
Medicaid & CHIP
- Currently Medicaid covers
o Pregnant Women & Children aged 0-5
▪ At 133% FPL in Alabama (high in some states)
o Children aged 6-18
▪ At 100% FPL in Alabama (higher in some states)
- CHIP covers:
o Children aged 0-18
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▪ At 300% FPL in Alabama (higher, but usually lower, in other states)
o Sometimes as part of Medicaid & sometimes separately
- In addition, if the state chooses to expand under ACA Medicaid will cover:
o ALL citizens and many legal residents aged 19-64 up 133% (actually 138%) of FPL.
Exchanges
- Create state-based individual and small business Exchanges
o Individuals and small firms with <50 workers can buy
o States may allow larger firms to participate
▪ Firms with <100 or more included beginning in 2016
o States may create multi-state exchanges
o States may combine individual & small
Exchange- Benefit Tiers
- Ceate leels of eefits, all of hih ust oe essetial health eefits ith a
out-of-pocket spending limit equal to current HSAs.
o Opeatioal defiitio of the essetial eefits is gie state’s ehak
plan- usually the largest small group plan in the state
- In each tier the insurer pays for a differing percent of covered benefit costs
o Bronze- 60%
o Silver- 70%
o Gold- 80&
o Platinum- 90%
- Catastrophic plan for the aged <30
Exchange- Requirements
- Maintain call center
- Establish procedures for enrolling individuals & businesses and determining eligibility for
tax credits.
- Develop single form for applying for state health subsidy programs
- Permitted to contract with Medicaid to determine eligibility.
- Federal financial reporting and oversight
Exchange- Underwriting
- Require guaranteed issue & renewal
- Underwriting allowed for:
o Age (3 to 1)
o Geographic area
o Family composition
o Tobacco use
o NOT allowed for health status or gender
o Require risk adjustment in individual and small group markets and in the
exchange
ACA & Employers
- Large employers required to provide coverage
o Delayed until 2015
o Generally modest effects in the short-run
o Long-run issues of grandfathered plans & Cadillac tax
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Chapter 3- patient protection and affordable care act. Democratic house passed bill in nov 2009: 220-215 with 39 dems opposed & 1 rep supporting. Democratic senate passed bill in dec 2009: straight party-line vote, less sweeping than house version. Scott brown replaced e. kennedy in jan 2010: senate democrats lost 60 vote filibuster proof majority. House passed senate bill intact march 23, 2010. Requires most u. s. citizens and legal residents to have health insurance: penalty for going without coverage, subsidies for lower income people, re(cid:395)ui(cid:396)es (cid:862)(cid:395)ualif(cid:455)i(cid:374)g(cid:863) (cid:272)o(cid:448)e(cid:396)age. Adverse selection: people know more about there likely use of health services than does an insurer, those most likely to use services are most likely to be the ones to obtain coverage. Tax penalty of /year to a maximum of 3 times that amount per family, or 2. 5% of household income whichever is greater.
