Healthcare reform isn’t an easy topic to explore, mainly because of the jargon and technical words politicians use. On the next two Web pages are keywords that have come up in the pending legislation to reform the U.S. healthcare system. Keep clicking after the glossary to learn more about the legislation your members of Congress have drafted.
Capitation: A fixed prepayment, per patient covered, to a healthcare provider to deliver medical services to a particular group of patients. The payment is the same no matter how many services or what type of services each patient actually gets. Under capitation, the provider is financially responsible.
Co-ops: Private, nonprofit health organizations, run in states or regionally, to compete with private insurance companies. Co-ops are a compromise proposal in the debate over greater government role in health reform.
Deductible: The amount of money, or value of certain services (such as one physician visit), a patient or family must pay before costs (or percentages of costs) are covered by the health plan or insurance company, usually per year.
Employer benefits exemption: Tax exemption for workers on the value of their health benefits provided by employers. Some reform proposals would remove this exclusion or cap it at a certain amount.
Exchange: A competitive insurance marketplace, established by the government, where individuals and small firms would shop among health plans for coverage under overhaul proposals. State-based health insurance exchanges will start in 2014.
Excise Tax: A tax will be applied to insurance plans that cost more than $27,500 annually for a family and $10,200 for an individual. For retirees and workers in high-risk professions, the thresholds rise to $30,950 for families and $11,580 for individuals.
Individual mandate: Requiring people to purchase health insurance or pay a penalty. Reform plans would give subsidies to those with middle incomes and below to afford a policy. This becomes effective in 2014.
Medicare: Federal insurance program for people 65 and older, and the disabled. It covers about 45 million Americans.
Medicare Prescription Drug Coverage Gap: Informally known as the Medicare donut hole, this describes the difference of the initial coverage limit and the coverage threshold. After a beneficiary surpasses the prescription drug coverage limit, the individual is financially responsible for the entire cost of prescription drugs until the expense reaches the catastrophic coverage threshold.
Medicaid: Government insurance plan for the poor and disabled covering roughly 60 million people. Although funded by the federal government, Medicaid is administered by each state. Following very broad federal guidelines, states determine specific benefits and amounts of payment for providers. The law raises Medicaid eligibility to 133 percent of the poverty level – $29,327 for a family of four. An estimated 16 million more people are now eligible for Medicaid.
Medical home model: An approach to providing comprehensive primary care that facilitates partnerships between individual patients and their personal physicians, and when appropriate, the patient’s family.
Pre-existing conditions: Medical conditions present before a person seeks out a new health insurance policy. Some insurance companies reject applicants for insurance or limit their coverage if they have pre-existing conditions. Under the reform law, insurance companies cannot deny people coverage based on pre-exisiting conditions.
Public plan or option: A government-run health plan, similar to Medicare, which would compete with private insurance plans in a marketplace or exchange. Although proposed early in the reform debate and supported by the American Nurses Association and other healthcare groups, the public option was not created in the reform law.
Rationing: Government or another entity would allocate scarce medical services to patients. Opponents of Democrats’ proposals say expensive drugs and medical treatments would be rationed under reform. Others say the current system already rations care based on a patient’s ability to pay for services.
Single payer: A financing system in which doctors and hospitals would bill a single entity, such as the federal government, for services.
Socialized medicine: European-style health system where the government employs healthcare providers and owns and operates healthcare facilities.
Subsidies: Money granted from the state or federal government to an individual. In the case of healthcare reform, this money would be used to go toward paying for the health insurance premium.
Surcharge or surtax: Extra income tax on the wealthiest Americans, proposed by House Democrats, to help pay for health reform.
Underinsured: People who have health insurance, but with high out-of-pocket costs for medical services.
Universal coverage: All Americans have insurance coverage.
Sources: WebMD, Public Broadcasting Service
After a year of debate, bipartisan posturing and bickering, the most sweeping social legislation in 4 decades was signed into law March 23: health insurance reform legislation.
The White House said the new legislation will make health insurance affordable for middle class and small businesses while reducing premiums and out-of-pocket costs.
The government also said insurance companies will be accountable to keep premiums down and prevent denials of care and coverage, including for pre-existing conditions.
President Obama signed the Health Care and Education Reconciliation Act of 2010 on March 30 at Northern Virginia Community College in Alexandria. Included in the bill were the final “fixes” the House and Senate placed on the bill after Obama signed The Patient Protection and Affordable Care Act (H.R. 3590) into law March 23.
The landmark legislation will extend insurance coverage to about 32 million Americans, establish health insurance exchanges, cap out-of-pocket expenses and bar insurers from denying coverage of children and thousands of adults with preexisting conditions within 6 months, and then to all children and all adults by 2014.
Aspects of the reform law will be enacted over time:
2010
Uninsured individuals can access health coverage without exclusions for pre-existing conditions.
Insurance companies can no longer refuse coverage of children because of pre-existing conditions.
Health plans that cover dependent children must extend that coverage up to age 26.
Lifetime limits on benefits and rescissions of existing policies because of customers’ illness are banned.
Medicare recipients caught in the Part D prescription drug coverage gap – the so-called doughnut hole – will receive a $250 rebate.
2011
Brand-name drugs in the Medicare Part D coverage gap are discounted by 50 percent.
Medicare Advantage payments are frozen at the 2010 level.
Medicare beneficiaries begin receiving free annual wellness visits and certain other preventive care benefits without incurring co-payments.
2012
A phased-in reduction of Medicare Advantage payment benchmarks relative to current levels begins.
2013
Contributions to health Flexible Savings Accounts are limited to $2,500 per year.
The income threshold for claiming the itemized deduction for medical expenses rises from 7.5 percent to 10 percent.
2014
Most individuals are required to get health insurance or face a penalty that starts at $95 in 2014 and will increase to $325 in 2015 and $695 or up to 2.5 percent of income (maximum of $2,085 for a family) in 2016 and subsequent years.
State-based health insurance exchanges are established to allow individuals and small businesses to compare and purchase standardized private insurance plans.
Premium tax credits become available through the exchange for people who cannot get acceptable coverage elsewhere and whose incomes are above the level for Medicaid eligibility and below 400 percent of the federal poverty level (up to $88,000 for a family of four).
Group insurance plans are banned from excluding pre-existing conditions.
Employers with 50 or more workers who opt not to provide health coverage, and who have at least one employee who is receiving a tax credit for buying insurance, will pay an annual fee of $2,000 for each full-time employee. However, the first 30 employees will not be counted in the calculation of the fee.
2018
An excise tax on high-cost health plans kicks in. The tax applies to insurance that costs more than $27,500 annually for a family and $10,200 for an individual. For retirees and workers in high-risk professions, the thresholds rise to $30,950 for families and $11,580 for individuals.
2020
The pharmaceutical manufacturer’s discount on brand-name drugs for Medicare recipients rises to 75 percent, thus completely closing the “doughnut hole.”
Reform Recap
Both introduced to Congress in 2009, including the House version (H.R. 3200, also called “America’s Affordable Health Choices Act of 2009“) and the version in a Senate committee (“Affordable Health Choices Act“) aim to:
· Protect current coverage – allowing individuals to keep the insurance they have if they like it, and the ability to choose their doctors, hospitals and health plans.
· Create a health insurance exchange, where Americans can pick and choose insurance plans that fit their needs.
· Start a government-backed insurance plan, often called “the public option.”
· Guarantee coverage for all Americans. Insurers cannot engage in discriminatory practices that enable them to refuse to sell or renew policies due to an individual’s health status. In addition, they can no longer exclude coverage of treatments for pre-existing health conditions.
· Develop a federally supported national prevention, health promotion and public health strategy that would set specific measurable goals and objectives for improving the health of the citizenry.
· Expand the work and coordination of the Community Preventive Services Task Force and the U.S. Preventive Services Taskforce to improve effective community-based and clinical-prevention services, and to improve dissemination of recommendations about effective interventions to public health departments, practitioners, policymakers, health systems and others.
· Create a Prevention and Public Health Investment Fund that would provide significant additional sustainable funding, reaching $10 billion by 2019, to expand critical public health and prevention programs that improve health and help to control private and public sector health-related costs.
· Create a public health workforce loan repayment program to eliminate critical public health workforce shortages and a grant program to provide training and continuing education for mid-career public health professionals.
The Senate HELP Committee bill
In mid-July, the Senate Health, Education, Labor and Pensions Committee (HELP), passed the Affordable Health Choices Act by a party-line vote of 13-10.
Paying for it:
· Congressional Budget Office estimates it would cost slightly more than $600 billion over 10 years.
· Starting in 2011, a family making $500,000 would pay $1,500 in additional income tax to help subsidize coverage for the uninsured. A family making $1 million would pay $9,000.
· Employers who do not provide health insurance to workers would have to pay a penalty to the government, which would be equal to 8 percent of wages for an employer with an annual payroll of more than $400,000. The surtax would apply to any adjusted gross income exceeding $280,000 a year for an individual and $350,000 for a couple filing a joint return. The tax rates would range from 1 percent to 5.4 percent.
· Forces employers with 25 or more workers to provide coverage or pay $750 annually for each full-time worker and $375 for each part-time worker.
· Proclaims the government would pay the start-up costs for the public insurance option as a loan to be repaid, and premiums would be set up so the option was ultimately self-sufficient.
The House committees (Ways and Means, Energy and Commerce, and Education and Labor) bill
The committees have passed it, and it’s headed to the House floor for vote, as early as September. This bill:
· Expands Medicaid.
· Increases funding for health professions diversity programs.
· Contains a provision that would repeal a law that called for sharp cuts in Medicare reimbursement levels to hospitals and doctors.
· Is supported by the American Nurses Association and the American Medical Association.
Paying for it:
· Congressional Budget Office projects it will cost a little more than $1 trillion over 10 years. Democrats said proposed savings in Medicare and other health programs will offset the cost.
· A 1 percent surtax on the richest 1.5 percent of Americans making between $350,000 and $500,000 a year, and a 5.4 percent tax on people who make more than $1 million annually.
· Revenues from the penalties on individuals who do not buy insurance and employers with more than 25 employees who do not offer their employees insurance.
