Over the first 10 years, the program adds $940 billion to the Federal budget. However, a study by the Congressional Budget Office said the Affordable Care Act will lower the budget deficit by $143 billion over these same ten years. How? The Act was designed to offsets its costs by lowering payments to hospitals, increasing Medicare tax payments from higher income households, and consolidating the higher education loan program with the Pell Grant program.
Despite these seeming benefits, there has been tremendous opposition before, during and after its becoming law. Lawsuits arguing that it is unconstitutional have been filed to stop it, and the case will be reviewed by the Supreme Court in 2012. The House of Representatives voted to repeal it in 2011. There has been so much opposition, in fact, that 22% of Americans think the law has already been repealed. What changes does the Affordable Care Act create, when are they rolling out, and how do they affect you?
Patient Affordable Care Act Changes That Occurred in 2010
Small businesses received tax credits to cover up to 35% of their total employee premium payments. This increases to 50% in 2014.(For details, see Small Business Tax Credit.)A re-insurance program offset the costs of health benefits for workers age 55-64 who were forced into early retirement.
Medicare beneficiaries who fell into the Medicare Part D Prescription Drug "doughnut hole" received a $250 rebate. They receive a 50% discount on brand name drugs in 2011, and the doughnut hole is eliminated in 2020.
Insurance companies were prohibited from dropping coverage if someone got really sick. They couldn't create lifetime coverage limits. They could no longer deny coverage to children with pre-existing conditions. The same will apply to adults in 2014. Until then, adults with pre-existing conditions who have been denied coverage will get access to temporary health insurance coverage until the exchanges are set up. (To see how to sign up, go to Pre-Existing Conditions.)Children could stay on their parents' health insurance until they turn 26.
New private plans were required to cover preventive services with no co-payments, and they are exempt from deductibles. Consumers who applied to new plans have access to an external appeals process if coverage is denied.
Patient Affordable Care Act Changes in 2011
Medicare-covered preventative services are exempted from deductibles and the co-pay is eliminated.Insurance companies must prove they spend at least 80% of the premium payments on medical services, rather than on things like advertising and executive salaries. If they don't they must provide rebates to policyholders.
Provides grants to states so they can require health insurance cmopanies to submit justification for all rate hikes.
The bill also provides funding to increase the number of doctors and nurses, and more community health centers - enough to double the number of patients the can treat in the next five years.
Tax Increases for the Wealthy
The Senate must still approve higher taxes to pay for the additional benefits. Specifically, the 1 million people who make more than $200,000 and the 4 million couples filing jointly who make more than $250,000 will pay 3.8% Medicare taxes on dividends, capital gains, rent and royalties and 2.35% (up from 1.45%) Medicare taxes on income. These taxes replace the Senate bill's excise high-cost specialty health insurance plans.Changes in 2012 and Beyond
In 2013, medical expenses must reach 10% of income before they are deductible for those under 65. People who don’t buy insurance must pay fines of $325 in 2015 and $695 in 2016. Businesses with 50+ workers must pay $2,000 per worker if they don’t offer health insurance. There is a tax credit to offset the cost. (Source: HealthReform.gov, Ryan Donmoyer, "New Health Care Taxes," Bloomberg, March 22, 2010)In 2014, the state-run health exchanges will be set up. New subsidies will become available for those working families who make too much to qualify for Medicaid, but can't afford private insurance. To find out how this will work, see Affordable Care Act from the About.com Guide to Health Insurance.
