The Health-Care Law, Unfurled

The full rollout of reform will take nearly a decade.

By Christopher Flavelle




• President Barack Obama signs the Patient Protection and Affordable Care Act (known as the ACA).


• The federal government begins providing temporary coverage for those unable to get private health insurance because of preexisting conditions; as of February 2012, 50,000 people have enrolled.


• Insurers, including United-Health Group and WellPoint, are required to provide coverage for policyholders’ adult children up to the age of 26; 2.5 million young people get insurance as a result.

• Insurers can no longer cap the value of services a beneficiary can receive over a lifetime.


• In midterm elections, Republicans regain control of the House, helped by popular opposition to the ACA. The party vows to “repeal and replace” the law.



• Health insurance plans in the individual and small-group market must spend at least 80 percent of their revenue from premiums on medical and related services. The required spending level, called the “medical loss ratio,” is 85 percent for large-group plans.

• The government freezes payment rates for Medicare plans run by private insurers under a program called Medicare Advantage, which serves about one-quarter of all Medicare beneficiaries. Medicare Advantage plans are projected to see a decrease of $136 billion in federal funding through 2019 under the law.



• The Supreme Court rules on the constitutionality of the law’s requirement that almost all Americans carry health insurance, and whether the law can stand without that requirement.


• Insurers that fail to meet their medical loss ratio by spending 80 percent or 85 percent of premiums on the health care of their customers have to start refunding the difference.


• Medicare payments are reduced for hospitals with “excess readmissions” — too many patients returning within 30 days of being discharged because of infections or other complications. The change gives HCA, Community Health Systems, and other hospital companies an incentive to reduce the number of preventable readmissions.


• Even if they win the White House and keep control of the House, Republicans may fall short of the supermajority (60 votes) they’ll need in the Senate to follow through on their promise to repeal the ACA. Another potential obstacle: Some parts of the law, such as allowing children under 26 to remain on their parents’ policies, are popular.



• A 2.3 percent excise tax is applied to most medical devices, including artificial joints, pacemakers, and MRI machines. The tax will raise $20 billion for the federal government over 10 years; the device makers’ lobby says it will hurt sales and cost jobs.

• The Medicare Part A tax increases by 0.9 percentage points for those earning more than $200,000 ($250,000 for married couples).



• Medicaid becomes available for everyone under 65 earning up to 133 percent of the federal poverty level. An estimated 13 million additional beneficiaries will enter the program that year. The news is mixed for doctors and hospitals: The newly insured will add to revenue but Medicaid’s reimbursement rates are often below the cost of service.

• Almost every American and legal resident is now required to carry a minimum level of health insurance. The so-called individual mandate will help insurance companies spread the risk of covering their most expensive beneficiaries, who can no longer be denied insurance — a change called “guaranteed issue.”

• The government begins subsidizing health insurance to families that fall between 133 percent and 400 percent of the federal poverty level if their employers don’t offer affordable insurance. The subsidies can be used to buy insurance plans on new “exchanges” that states are required to establish; open enrollment for those exchanges begins in late 2013.

• The Independent Payment Advisory Board (IPAB) must submit its first recommendations to Congress on reducing Medicare spending.



• Insurers providing “Cadillac” health plans — worth more than $10,200 for individuals, or $27,500 for families — are required to pay an excise tax on the cost of coverage. The change is designed to slow the growth of medical spending by reducing favorable tax treatment for health insurance. The tax will raise an estimated $12 billion in its first year.


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