The Patient Protection and Affordable Care Act passed on March 23, 2010
​             represents over 2000 pages of legislation and addresses healthcare in both the private
​             and public markets.  Healthcare is a $2.2 trillion industry, and represents 1/6 of the U.S.
​             Gross Domestic Product.  It is important that consumers and business owners familiarize
​             themselves with the key points of this historic legislation.  Below is a highlight summary 
​             of the bill.

​                                                             2010 Reforms
​            * Insurers may not arbitrarily cancel your coverage when you get sick, except
              in cases of fraud, or intentional misrepresentation.

​           * Insurers must cover certain preventive and immunization services with no
             co-payments or deductibles as determined by the U.S. Preventive Services
             Task Force.  

​          * Children who can't get coverage from their employers may stay on their parents
             plan until age 26.

​          * No more lifetime maximums on insurance plans effective 9/23/2010.

​         * New high-risk pool options (insurance plans) will be available for people
           with serious pre-existing conditions and have been uninsured for at least six months.
           These pools will limit out-of-pocket costs to $5,950 for individuals and $11,900 for

​         * A temporary re-insurance program will be created to help employers offset the
           cost of expensive retiree health benefit premiums for people over 55.

​         * Insurers can no longer deny children coverage based on pre-existing
           conditions, or exclude a particular condition (effective 9/23/2010).

​         * Businesses with 25 of fewer full-time employees that pay for at least 50%
           of premiums and pay average annual wages of below $50,000 may be
           eligible for a tax credit up to 35% of the premiums the business pays.

​         * The bill authorizes more funding for community health centers as well as
           developing programs to expand nurses, doctors, and other healthcare workers.

​         * People on Medicare Part D who are in the "donut hole" will receive a $250

​         * A new 10% tax on tanning booth operators will take effect.

​                                                              2011 Reforms

​        * Medicare reimbursements to doctors will increase 10%.

​        * There will be a 50% discount on brand name drugs for people in the Medicare
          Part D doughnut hole.

​        * Grants for small business wellness programs will be made available.

​        * Medicare will introduce free annual wellness visits for its' members.

​        * Over payments for Medicare Advantage will start to be phased out.

​        Minimum loss ratios will require insurance comanies to pay out a 
          minimum of 80% of all premiums collected in the form of paid claims 
          (individual and small group markets), and a 85% pay out requirement 
          in the large group market.

​        * There will be a fee (tax) assessed on pharmaceutical manufacturers.

​        * Funding will be made available to the states to evaluate alternatives to
           tort litigation.

​        * Over the counter drugs can no longer be acquired through your FSA or
          Health Reimbursement Arrangement accounts unless prescribed by a doctor.

​                                                            2012 Reforms

​        * Penalties will be assessed to hospitals under Medicare for excessive
          re-admission rates.

​        * New standards will be required to explain policy definitions and coverage 
          benefits in health plans.

​        * Doctors will be encouraged to join accountable care organizations.

​        * Rebates will be reduced in Medicare Advantage plans.

​                                                            2013 Reforms

​        * Increase the Medicare Part A tax from 1.45% to 2.35% for individuals
          making over $200,000 and families making over $250,000.

​        * A special 3.8% tax on unearned (investment) income on high-income

​        * Limit FSA accounts to $2500 annually.

​        * Impose a 2.3% tax on all medical devices. 

​        * Medicare will slowly phase in reimbursements based on deisred medical 
          outcomes ("payment bundling"), as opposed to the traditional fee for service      
          reimbursement model.

​        * Create Consumer Operated and Oriented Plans (health insurance "co-ops")
          which are member run non-profit health insurance companies.

​        * Start phasing in Medicare Part D subsidies that eventually hit 25% in 2020.

​        * Increase the floor for deductible health expenses from 7.5% of AGI, to 10%. 

​                                                            2014 Reforms

​        * All insurance applicants must be accepted regardless of pre-existing conditions.

​        * Annual plan benefit caps must be eliminated.

​        * Individuals and families that don't have health coverage will pay a penalty
          that is phased in starting in 2014, and tops out at 2.5% of income in 2016.

​        * There will be susbsidies to purchase health insurance for people that
           are between 133% - 400% of the Federal Poverty Level (FPL).  This
           would be incomes of $14,404 (Ind.)/$29,326 (Family) on the low
           end, to $43,320 (Ind.)/$88,200 (Family) on the high end.

​        * Small businesses with 100 or fewer employees can purchase health
           insurance on purchasing exchanges ( SHOP - Small Business Health
           Options Program).

​        * Individuals can purchase insurance on the American Health Benefit Exchanges.

​        * There will be a health insurance provider fee assessed on carriers based 
          on market share.  Additionally, carriers must keep premiums structured so
          that the highest premiums charged individuals are no more than a 3:1 ratio
          compared to the lowest premiums (i.e. - premiums for the oldest policyholders
          can't be more that three times that of premiums for the youngest policyholders).

​        * The U.S. Office of Personnel and Budget will oversee two different national
           health plans offered by carriers who want to participate in the program.

​        * For businesses with more than 50 employees that have no health coverage
          program, a penalty will be assessed of $2000 per employee for each employee
          over 30 employees as long as there is at least one employee in the company who   receives           federapremium tax credits.

​        * For businesses with more than 50 employees that do offer health coverage,
          a penalty o $3000 will be assessed for each employee who receives federal
          premium tax credits, or the employer can pay a penalty of $2000 for each 
          full-time employee, whichever is the lesser.

​        * Deductibles in the small group health insurance market will be limited to
          $2000 for individuals, and $4000 for families.

​        * There will be four different levels of health insurance plans offered through
          the exchanges:

​        Bronze - Covers 60% of the benefit costs with an out-of-pocket limit
        of $5,950 for individuals, and $11,900 for families.

​        Silver -   Covers 70% of the benefit costs with the same out-of-pocket 
        caps above.

​        Gold -    Covers 80% of the benefit costs, caps as above.
​        Platinum - Covers 90% of benefit costs, caps as above.

​        For people with incomes between 133% - 400% of the federal poverty
​        level, out-of-pocket limits will reduced by a portion 1/3 - 2/3 of $5,950 
​        for individuals and $11,900 for families.

​                                                            2015 - 2018 Reforms

​        * States can participate in healthcare choice compacts to allow carriers
          to sell their plans in any state (2016).

​        * The "Cadillac Tax" will take effect  in 2018 which is a tax on insurance plans that
           are over $10,200 per year in premiums for individuals, and over $27,500
           per year in premiums for families.  This tax is assessed directly to the insurance

​        * Medicare payments will be reduced to certain hospitals by 1% for patients
          that develop hospital acquired medical condition (2015). 



Summary of
the 2010
Healthcare Reforms