Health Care Reform Timeline
In March 2010, President Obama signed comprehensive health reform into law. The following timeline provides implementation dates for key provisions in the law.
2010
Insurance Reforms
• Provide dependent coverage for adult children up to age 26 for all individual and group policies.
• Prohibit individual and group health plans from placing lifetime limits on the dollar value of coverage and prior to 2014, plans may only impose annual limits on coverage as determined by the Secretary. Prohibit insurers from rescinding coverage except in cases of fraud and prohibit pre-existing condition exclusions for children.
• Require qualified health plans to provide at a minimum coverage without cost-sharing for preventive services rated A or B by the U.S. Preventive Services Task Force, recommended immunizations, preventive care for infants, children, and adolescents, and additional preventive care and screenings for women.
• Provide tax credits to small employers with no more than 25 employees and average annual wages of less than $50,000 that provide
health insurance for employees.
• Create a temporary reinsurance program for employers providing health insurance coverage to retirees over age 55 who are not eligible for Medicare (Effective 90 days following enactment until January 1, 2014).
• Require health plans to report the proportion of premium dollars spent on clinical services, quality, and other costs and provide rebates to consumers for the amount of the premium spent on clinical services and quality that is less than 85% for plans in the large group market and 80% for plans in the individual and small group markets. (Requirement to report medical loss ratio effective plan year 2010; requirement to provide rebates effective January 1, 2011)
• Establish a process for reviewing increases in health plan premiums and require plans to justify increases. Require states to report on trends in premium increases and recommend whether certain plans should be excluded from the Exchange based on unjustified
premium increases.
Medicare
• Expand Medicare coverage to individuals who have been exposed to environmental health hazards from living in an area subject to an
emergency declaration made as of June 17, 2009 and have developed certain health conditions as a result.
• Improve care coordination for dual eligibles by creating a new office within the Centers for Medicare and Medicaid services, the Federal Coordinated Health Care Office.
• Reduce annual market basket updates for inpatient and outpatient hospital services, long-term care hospitals, inpatient rehabilitation facilities, and psychiatric hospitals and units.
• Ban new physician-owned hospitals in Medicare, requiring hospitals to have a provider agreement in effect by December 31; limit the growth of certain grandfathered physician-owned hospitals.
Medicaid
• Create a state option to provide Medicaid coverage for family planning services up to the highest level of eligibility for pregnant women to certain low-income individuals through a Medicaid state plan amendment.
• Create a new option for states to provide Children’s Health Insurance Program (CHIP) coverage to children of state employees eligible for health benefits if certain conditions are met.
• Increase the Medicaid drug rebate percentage for brand name drugs to 23.1% (except the rebate for clotting factors and drugs approved exclusively for pediatric use increases to 17.1%); increase the Medicaid rebate for non-innovator, multiple source drugs to 13% of average manufacturer price; and extend the drug rebate to Medicaid managed care plans.
• Provide funding for and expand the role of the Medicaid and CHIP Payment and Access Commission to include assessments of adult
services (including those dually eligible for Medicare and Medicaid).
• Require the Secretary of HHS to issue regulations to establish a process for public notice and comment for section 1115 waivers in
Medicaid and CHIP.
Prescription Drugs
Quality Improvement
• Establish a commissioned Regular Corps and a Ready Reserve Corps for service in time of a national emergency.
• Reauthorize and amend the Indian Health Care Improvement Act.
Workforce
• Increase workforce supply and support training of health professionals through scholarships and loans.
Tax Changes
• Limit the deductibility of executive and employee compensation to $500,000 per applicable individual for health insurance providers.
• Impose a tax of 10% on the amount paid for indoor tanning services.
• Exclude unprocessed fuels from the definition of cellulosic biofuel for purposes of applying the cellulosic biofuel producer credit.
• Clarify application of the economic substance doctrine and increase penalties for underpayments attributable to a transaction lacking economic substance.
2011
Long-term Care
Medical Malpractice
Prevention/Wellness
• Provide Medicare beneficiaries access to a comprehensive health risk assessment and creation of a personalized prevention plan and
provide incentives to Medicare and Medicaid beneficiaries to complete behavior modification programs.
• Provide grants for up to five years to small employers that establish wellness programs.
• Establish the National Prevention, Health Promotion and Public Health Council to develop a national strategy to improve the nation’s health.
• Require chain restaurants and food sold from vending machines to disclose the nutritional content of each item.
Medicare
gap beginning in 2011 and begin phasing-in federal subsidies for generic prescriptions filled in the Medicare Part D coverage gap.
• Provide a 10% Medicare bonus payment to primary care physicians, and to general surgeons practicing in health professional shortage areas (Effective 2011 through 2015).
• Restructure payments to Medicare Advantage plans by setting payments to different percentages of Medicare fee-for-service rates.
• Prohibit Medicare Advantage plans from imposing higher cost-sharing requirements for some Medicare covered benefits than is
required under the traditional fee-for-service program.
• Provide Medicare payments to qualifying hospitals in counties with the lowest quartile Medicare spending for 2011 and 2012.
• Freeze the income threshold for income-related Medicare Part B premiums for 2011 through 2019 at 2010 levels, and reduce the
Medicare Part D premium subsidy for those with incomes above $85,000/individual and $170,000/couple.
• Create an Innovation Center within the Centers for Medicare and Medicaid Services.
Medicaid
• Create a new Medicaid state plan option to permit Medicaid enrollees with at least two chronic conditions, one condition and risk
of developing another, or at least one serious and persistent mental health condition to designate a provider as a health home. Provide states taking up the option with 90% FMAP for two years for health home related services including care management, care
coordination and health promotion.
• Create the State Balancing Incentive Program in Medicaid to provide enhanced federal matching payments to increase noninstitutionally based longterm care services.
• Establish the Community First Choice Option in Medicaid to provide community-based attendant support services to certain people with disabilities.
Quality Improvement
• Establish the Community-based Collaborative Care Network Program to support consortiums of health care providers to coordinate and
integrate health care services, for low-income uninsured and underinsured populations.
• Establish a new trauma center program to strengthen emergency department and trauma center capacity.
• Improve access to care by increasing funding by $11 billion for community health centers and by $1.5 billion for the National Health Service Corps over five years; establish new programs to support school-based health centers and nurse-managed health clinics.
Workforce
Tax Changes
account or health flexible spending account and from being reimbursed on a tax-free basis through a health savings account or Archer
Medical Savings Account.
• Increase the tax on distributions from a health savings account or an Archer MSA that are not used for qualified medical expenses to 20% of the disbursed amount.
• Impose new annual fees on the pharmaceutical manufacturing sector.
2012
Medicare
• Allow providers organized as accountable care organizations (ACOs) that voluntarily meet quality thresholds to share in the cost savings they achieve for the Medicare program.
• Reduce Medicare payments that would otherwise be made to hospitals by specified percentages to account for excess (preventable)
hospital readmissions.
• Reduce annual market basket updates for home health agencies, skilled nursing facilities, hospices, and other Medicare providers.
• Create the Medicare Independence at Home demonstration program.
• Establish a hospital value-based purchasing program in Medicare and develop plans to implement value-based purchasing programs
for skilled nursing facilities, home health agencies, and ambulatory surgical centers.
• Provide bonus payments to high–quality Medicare Advantage plans.
• Reduce rebates for Medicare Advantage plans.
Medicaid
Quality Improvement
2013
Insurance Reforms
companies in all 50 states and the District of Columbia to offer qualified health plans (Appropriate $6 billion to finance the program and award loans and grants to establish CO-OPs by July 1, 2013).
• Simplify health insurance administration by adopting a single set of operating rules for eligibility verification and claims status (rules adopted July 1, 2011; effective January 1, 2013), electronic funds transfers and health care payment and remittance (rules adopted July 1, 2012; effective January 1, 2014), and health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, and referral certification and authorization (rules adopted July 1, 2014; effective January 1, 2016). Health plans must document compliance with these standards or face a penalty of no more than $1 per covered life (Effective April 1, 2014).
Prevention/Wellness
U.S. Preventive Services Task Force and recommended immunizations with a one percentage point increase in the federal medical assistance percentage (FMAP) for these services.
Medicare
• Establish a national Medicare pilot program to develop and evaluate paying a bundled payment for acute, inpatient hospital services, physician services, outpatient hospital services, and post-acute care services for an episode of care.
Medicaid
Quality Improvement
Tax Changes
adjusted gross income for regular tax purposes; waive the increase for individuals age 65 and older for tax years 2013 through 2016.
• Increase the Medicare Part A (hospital insurance) tax rate on wages by 0.9% (from 1.45% to 2.35%) on earnings over $200,000 for
individual taxpayers and $250,000 for married couples filing jointly and impose a 3.8% assessment on unearned income for higher income taxpayers.
• Limit the amount of contributions to a flexible spending account for medical expenses to $2,500 per year increased annually by the cost of living adjustment.
• Impose an excise tax of 2.3% on the sale of any taxable medical device.
• Eliminate the tax-deduction for employers who receive Medicare Part D retiree drug subsidy payments.
2014
Individual and Employer Requirements
• Assess employers with 50 or more employees that do not offer coverage and have at least one full-time employee who receives a
premium tax credit a fee of $2,000 per full-time employee, excluding the first 30 employees from the assessment. Employers with 50
or more employees that offer coverage but have at least one full-time employee receiving a premium tax credit, will pay the lesser of $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee, excluding the first 30 employees from the assessment. Require employers with more than 200 employees to automatically enroll employees into health insurance plans offered
by the employer. Employees may opt out of coverage.
Insurance Reforms
by a governmental agency or non-profit organization, through which individuals and small businesses with up to 100 employees can
purchase qualified coverage.
• Require guarantee issue and renewability and allow rating variation based only on age (limited to 3 to 1 ratio), premium rating area, family composition, and tobacco use (limited to 1.5. to 1 ratio) in the individual and the small group market and the Exchanges.
• Reduce the out-of-pocket limits for those with incomes up to 400% FPL to the following levels:
– 100-200% FPL: one-third of the HSA limits ($1,983/individual and $3,967/family in 2010);
– 200-300% FPL: one-half of the HSA limits ($2,975/individual and $5,950/family in 2010);
– 300-400% FPL: two-thirds of the HSA limits ($3,987/individual and $7,973/family in 2010).
• Limit deductibles for health plans in the small group market to $2,000 for individuals and $4,000 for families unless contributions are offered that offset deductible amounts above these limits.
• Limit any waiting periods for coverage to 90 days.
• Create an essential health benefits package that provides a comprehensive set of services, covers at least 60% of the actuarial value of the covered benefits, limits annual cost-sharing to the current law HSA limits ($5,950/individual and $11,900/family in 2010), and is not more extensive than the typical employer plan.
• Require the Office of Personnel Management to contract with insurers to offer at least two multi-state plans in each Exchange. At least one plan must be offered by a non-profit entity and at least one plan must not provide coverage for abortions beyond those permitted by federal law.
• Permit states the option to create a Basic Health Plan for uninsured individuals with incomes between 133-200% FPL who would
otherwise be eligible to receive premium subsidies in the Exchange.
• Allow states the option of merging the individual and small group markets.
• Create a temporary reinsurance program to collect payments from health insurers in the individual and group markets to provide
payments to plans in the individual market that cover high-risk individuals.
• Require qualified health plans to meet new operating standards and reporting requirements.
Premium Subsidies
between 133-400% FPL to purchase insurance through the Exchanges.
Medicare
• Establish an Independent Payment Advisory Board comprised of 15 members to submit legislative proposals containing
recommendations to reduce the per capita rate of growth in Medicare spending if spending exceeds a target growth rate.
• Reduce Medicare Disproportionate Share Hospital (DSH) payments initially by 75% and subsequently increase payments based on the
percent of the population uninsured and the amount of uncompensated care provided.
• Require Medicare Advantage plans to have medical loss ratios no lower than 85%.
Medicaid
dependent children) with incomes up to 133% FPL based on modified adjusted gross income (MAGI) and provide enhanced federal
matching for new eligibles.
• Reduce states’ Medicaid Disproportionate Share Hospital (DSH) allotments.
• Increase spending caps for the territories.
Prevention/Wellness
Tax Changes
Insurance Reforms
Medicare
Tax Changes
Source: The Henry J. Kaiser Family Foundation