CD048: The Affordable Care Act (Obamacare)

CD048: The Affordable Care Act (Obamacare)

Oct 12, 2013

For this episode, I read the entire Patient Protection and Affordable Care Act.

The following is a resource for finding information within the Patient Protection and Affordable Care Act. My goal was to highlight the portions of the bill that will most directly affect our lives and put them into plain, understandable English.

I’d also like for you to be able to find the text that makes these rules within the bill. The easiest way to search within a bill is by section number. You’ll have to read a bit to find exactly what you’re looking for, but this outline will tell you which section you can find the different provisions in. Anything “in quotes” is exact text from the bill.

There are two versions of the Patient Protection and Affordable Care Act (Public Law 111-148) you can read. This version is 906 pages. This version is 2,409 pages (the margins and the font are bigger).

If you are going to attempt to read the Patient Protection and Affordable Care Act, you must know that Title X amends the first nine titles and The Reconciliation Act amended the whole bill. This means that the law is often not what the text says. Here is a section by section summary of the changes made by Title 10 and the Reconciliation Act. This document was provided to the United States Senate for clarification.


Subtitle A: “Immediate Improvements in Health Care Coverage for All Americans”

Section 1001: Rules on health insurance minimums that became effective immediately

  • Insurance company can’t drop you when you get sick, unless you committed fraud
  • Health insurance plans have to provide – at no extra charge:
  • All of the preventatives services on this list
  • Immunizations
  • Preventative care screenings for kids
  • Kids can stay on their parent’s insurance plans until their 26th birthday
  • Insurance companies must cover at least 60% of medical payments
  • The health insurance companies need to provide customers with a summary of benefits, which can only be 4 pages long with a minimum of 12-pt font and must include limitations, co-payments, deductibles, and percentage of medical costs covered by the insurance company.
  • If they fail to provide the summary, the health insurer has to pay $1,000 for each customer who didn’t receive it
  • Employers are not allowed to only offer coverage to their high-paid employees

Section 1001 as changed by amendment (See Section 10101):

  • No lifetime limits or “unreasonable annual limits” on the value of benefits for any customer
  • They can place limits on things that are not essential health benefits
  • Gun ownership health dangers must be ignored:
  • Prevention programs can not collect information related to the presence of guns or ammunition in someone’s home
  • Premium rates can not be affected by the presence of a gun in someone’s home
  • Medical Loss Ratio
  • Health insurance companies covering large groups must spend 85% of your premiums on you, or they have to issue a rebate check.
  • Health insurance companies covering people in the individual market or small groups through exchanges have to spend 80% of your premiums on you or issue a rebate check.
  • Hospitals must publish a list of standard charges for their services.
  • Health insurance companies have to let you go to any primary care doctor that you choose and who can accept you
  • The insurance company must have an appeals process for customers and must continue coverage while claims are in appeals
  • If you get treatment in an out-of-network emergency room, your health insurance has to pay for those services.
  • Health insurance companies can’t require prior approval for emergency services.
  • Health insurance companies can not require advance approval to go to get gynecological services.

Section 1003: Premium Increase Reviews

  • The Federal government and the States will review annual premium increases.
  • States can recommend that a health insurance company be excluded from the exchange for unjustified premium increases.

Subtitle B: “Immediate Actions to Preserve and Expand Coverage”

Section 1101: Creates the “high risk health insurance pool program” to cover people with pre-existing conditions until January 1, 2014

  • Could only be run by non-profit private insurers or States
  • Insurer had to cover at least 65% of customer’s medical costs
  • Could vary premiums based on age no more than a 4:1 ratio
  • Only open to United States citizens or lawful residents who had no health insurance for the 6 months prior to enrollment
  • Provided $5 billion (this money ran out & the government stopped accepting new applicants on February 15, 2013 – the House Republicans would have added money only if the Public Health fund were defunded, as explained in episode CD026)
  • High risk pool ends on January 1, 2014 and customers will then buy their insurance on the exchanges, when health insurers will not be allowed to deny them coverage anymore

Section 1102: Reimbursement for employers who give health coverage to “early retirees”

  • Employers who provide health insurance to people over 55 years old but under 65 (when Medicare kicks in) will be reimbursed for a portion of that expense.
  • Payments will be 80% of the amount over $15,000 up to $90,000.
  • Payments must be used for health care expenses & can not be used as general revenue or count as income.
  • Provided $5 billion for this program
  • Program ends on January 1, 2014, when everyone can buy insurance on the exchanges

Section 1104:

  • Orders the Secretary of Health & Human Services to develop “uniform standards” for health information electronic data entry
  • The rules will be for communication between hospitals/doctors and the health insurance companies.
  • Allows for the creation of “machine readable identification cards”
  • Penalty fee will be assessed beginning on April 1, 2014 for health insurance companies that don’t comply
  • Fee is $1 per customer covered until they’ve completed the electronic information requirements. The fee is imposed for each day the plan is not in compliance.
  • The fee is increased annually and capped at $20 per customer or $40 per customer if the insurance company purposely provides false or incomplete information.
  • Penalty fees are paid to the Treasury Department and are due November 1 of each year starting in 2014.

Subtitle C: “Quality Health Insurance Coverage for All Americans”

Section 1201: Health Insurance Market Reforms

  • Health insurance companies can not exclude someone for having a pre-existing condition
  • This law became effective for children starting six months after the Affordable Care Act was signed
  • Premium rates are allowed to vary based on the following factors only:
  • The number of people covered by the plan (individual or family)
  • Location
  • Age, but the rate can not vary more than a 3:1 ratio for adults
  • Tobacco use, but the rate can not vary more than a 1.5:1 ratio
  • Health insurance companies must accept every employer or individual customer who applies for coverage during their open enrollment periods.
  • Health insurance companies can not deny a customer coverage due to health status, mental or physical illnesses, history of claims, medical history, genetic information, domestic violence history, disability, or any other health-related factor.
  • Health insurance companies also have to renew your insurance policy
  • Health insurance companies can offer rebates or premium discounts as a reward to customers’ participation in wellness programs including:
  • Reimbursement for fitness center memberships
  • A disease testing program that does not base the reward on outcomes
  • Waiving co-payments or deductibles for preventative care visits (prenatal care & well-baby visits)
  • Reimbursement for programs that help people quit smoking, regardless of whether or not they can actually quit
  • A reward for attending health education seminars
  • Waiting periods can not be longer than 90 days
  • This does not apply to the individual market  (added by Section 10103)

Section 1201 as changed by amendment (See Section 10103)

  • Health insurance companies can’t deny coverage for approved clinical trials for treatment of cancer or another life-threatening disease.

Section 1251: Grandfathered health care plans

  • Nothing in the Affordable Care Act forces an individual to cancel the coverage they currently have.
  • Grandfathered plans are exempt from the provisions of Subtitle A and Subtitle C, except for the provisions specifically listed below.
  • New employees and their families can be enrolled in health plans that existed before the Affordable Care Act was enacted.

Section 1251 as changed by amendment (See Section 10103)

  • Grandfathered plans must provide the easily understood summary of benefits from Section 1001 to their customers.
  • Grandfathered plans must issue rebate checks under the Medical Loss Ratio just like new plans
  • Health insurance companies covering large groups must spend 85% of your premiums on you, or they have to issue a rebate check.
  • Health insurance companies covering people in the individual market or small groups through exchanges have to spend 80% of your premiums on you or issue a rebate check.

Section 1251 as changed by the Reconciliation Act (See Public Law 111-152)

  • Grandfathered plans are prohibited from enforcing waiting periods over 30 days.
  • Grandfathered plans are prohibited from enforcing lifetime or annual limits to coverage (group plans only).
  • Grandfathered plans can not drop you when you get sick.
  • Grandfathered plans will also have to cover children until their 26th birthday.
  • Grandfathered plans can not refuse an employee with pre-existing conditions.

Subtitle D: “Available Coverage Choices for All Americans”

Section 1302: Essential Health Benefits Requirements

  • Essential health benefits to be included in all “qualified health plans”:
  • Ambulances
  • Emergency room services
  • Hospitalizations
  • Maternity and newborn care
  • Mental health
  • Substance abuse treatment
  • Behavioral health treatment
  • Prescription drugs
  • Rehabilitation services and devices
  • Laboratory services
  • Preventative care
  • Chronic disease management
  • Pediatric care, including dental and vision
  • Health insurance companies are allowed to cover more than these minimums
  • Coverage for emergency services  can not require prior authorization
  • Health insurance companies can’t limit coverage because the ambulance took you to an out-of-network emergency room
  • Out of pocket expense caps
  • In 2014, an individual can not be charged more than $5,000/year for out-of-pocket expenses (not including premiums); after that, it can be increased by the same percentage as premium increases.
  • Deductibles for employer-paid plans are capped at $2,000/year for individuals or $4,000/year for family plans. After 2014, these numbers can be increased by the same percentage as premium increases.
  • Out-of-pocket caps do not include amounts for non-network providers or non-covered services
  • Levels of Coverage
  • Bronze: Covers 60% of medical costs
  • Silver: Covers 70% of medical costs
  • Gold: Covers 80% of medical costs
  • Platinum: Covers 90% of medical costs
  • Catastrophic Coverage available only on the individual market
  • Plan provides no benefits until the person has spent the $5,000/year out-of-pocket limit (or whatever the limit is for that year, adjusted for inflation)
  • Available only to people under 30 years old
  • Available only if a monthly premium would exceed 8% of that person’s income

Section 1303 as changed by amendment (See Section 10104): Abortion Rules

  • States can prohibit abortions from being offered by health insurance plans offered through the exchange.
  • States must pass a law to do this.
  • Health insurance plans do not need to include abortions.
  • No Federal funds can be used to pay for abortions.
  • No hospital or doctor’s office can be discriminated against by insurance companies for not providing abortions.

Section 1311: Health Insurance Exchanges

  • States will be given Federal grants to set up their own health insurance exchanges, which are websites where people will compare and purchase their insurance plans.
  • Grants will stop being awarded on January 1, 2015.
  • Exchanges will include an “enrollee” satisfaction system for plans covering more than 500 people.
  • Secretary must determine yearly open enrollment periods
  • Stand-alone dental plans will be allowed on the exchanges.
  • States are allowed to require more benefits than the Federal government requires, but must make up cost to individuals for extra costs if they’re eligible for a tax credit.
  • By 2015, exchanges must be self-sustaining and can charge user fees.
  • Exchanges have to publish all payments required by the Exchange & the administrative costs.
  • Interstate and regional exchanges are allowed.
  • Creates “navigator” positions
  • They will inform the public on the health plans, help people enroll, and help people understand their tax credits.
  • Navigators are not allowed be employees of the health insurance industry

Section 1311 as changed by amendments (See Section 10104)

  • Health insurance companies need to publicly disclose – in plain language – information on claims payment policies, enrollment, denials, out-of-network charges, and customer rights.

Section 1312: Health Insurance Eligibility & Members of Congress

  • All customers in with a company’s individual plan will be considered part of a one risk pool.
  • All customers enrolled as employees of small businesses will be considered part of one risk pool.
  • The individual and small business pools may be merged if the State determines it appropriate.
  • Starting in 2017, States can permit large employers (over 101 employees) to offer insurance through the Exchange.
  • Health insurance companies can offer insurance outside of the Exchanges.
  • Only United States citizens and lawfully present foreigners will be allowed to purchase health insurance on the Exchange.
  • Prisoners will not be eligible to buy insurance on Exchanges while they’re still incarcerated
  • The Federal Government can only offer health plans to members of Congress that are offered through an Exchange.

Section 1312 as changed by amendment (See Section 10104)

  • Agents and brokers are allowed to enroll employers and individuals in health insurance plans and help them apply for tax credits and out-of-pocket reductions.

Section 1321: States Must Create Exchanges or Federal Government Will Do It For Them

  • Department of Health and Human Services will provide an exchange for a State if the State will not have it’s own operational by January 1, 2014.

Section 1322: Grants for Creation of Non-Profit, Member-Run Health Insurance Companies

  • The goal is to have at least one non-profit, member-run health insurance company in each State offer insurance on the individual and small business exchanges.
  • If a State doesn’t have a non-profit, member-run option, they will be loaned money to create one or to have one from elsewhere expand into their State.
  • The loan must be repaid within 15 years (added by Section 10104)
  • The non-profit, member-run health insurance companies are not allowed to use Federal funds for marketing.
  • A health insurance company will not count as a non-profit, member-run insurance company unless “any profits made by the organization are required to be used to lower premiums, to improve benefits, or for other programs intended to improve the quality of health care delivered to its members.”
  • Non-profit, member-run health insurance companies will be tax exempt.

Section 1323: Optional State Public Option (Killed by amendment: See Section 10104)

  • States are allowed to offer a public option, labeled “community health insurance”, but they are not required to.

Section 1331: States Can Buy Insurance for Low-Income People Who Don’t Qualify for Medicaid or Medicare

  • To qualify for this program, if offered by your State:
  • Must be a resident of the offering State
  • Must be under 65 years old
  • Your income needs to be between 133%-200% of the poverty level

Section 1332: Waiver for States That Develop A Better System

  • States that develop a system that covers as much and costs the same or less than the Federal system can apply for a waiver. If granted, they can enact their own system.
  • The new system could begin on January 1, 2017.

Section 1333: Allows Health Insurance Plans to Be Sold To Multiple States

  • Health insurance companies would have to be licensed in all the States where its plans are sold.
  • Health insurance companies would have to “clearly notify consumers that the policy may not be subject to all the laws and regulations of the State in which the purchaser resides.”
  • Plans sold in multiple states – “health care choice compacts”- can begin on January 1, 2016.

Section 1334 as added by amendment (See Section 10104): National Health Insurance Plans

  • The Director of the Office of Personnel Management will contract with at least two insurance companies to offer insurance to the individual and small group markets in every state.
  • At least one of these companies must be non-profit.
  • Plans need to be licensed in each State where they offer coverage.
  • States can require health insurance companies to offer additional benefits but must pay the additional cost.
  • The multi-state insurance plans will be nationwide within four years.

Section 1341: Insurance Companies Will Have Insurance for “High-Risk” Customers for First 3 Years

Subtitle E: “Affordable Coverage Choices for All Americans”

Section 1401 as amended by Section 1001 of the Reconciliation Act: Tax Credits

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  • The premium used for calculation is the second-lowest silver plan in the individual market where the taxpayer lives.

Section 1402: Out-of-Pocket Limits Reduced

  • Only applies to people who have purchased Silver Level coverage on an Exchange
  • The standard out-of-pocket limits ($5,950 for individuals and $11,900 for families) would be reduced for people making under 400% of the poverty level.
  • Reduction Levels:
  • People making 100%-200% of the poverty level will have their limit reduced by 2/3.
  • People making 201%-300% of the poverty level will have their limit reduced by 1/2.
  • People making 301%-400% of the poverty level will have their limit reduced by 1/3.
  • No health insurance company will ever pay more than 94% of medical costs (increased by Section 1001 of the Reconciliation Act).
  • The Federal Government will pay the health insurance companies for the amount they reduce out-of-pocket limits
  • Illegal immigrants are not eligible.

*Tax Credit / Premium Calculator

Section 1411: How Government Will Determine Eligibility & Grant Individual Exemptions

  • People or employers who disregard regulations and provide false information are subject to a $25,000 fine.
  • People or employers who purposefully provide false information are subject to a $250,000 fine.
  • No property can be taken away if the person or company doesn’t pay the penalty.

Section 1412: Advance Payment of Tax Credits and Out-of-Pocket Reductions

  • Premium tax credits can be claimed in advance to help pay for premiums.

Section 1415: Premium Tax Credits Don’t Count As Income

Section 1421 as changed by amendment (See Section 10105): Small Business Tax Credit

  • Eligible employers must:
  • Have fewer than 25 employees and
  • Pay average annual wages of less than $50,000/year.
  • Pay at least 50% of total premiums.
  • Eligible employers who purchase coverage through the State exchange can get a tax credit of up to 50% of their health insurance costs.
  • Tax-exempt eligible employers can get a tax credit of up to 35% of their health insurance costs.

Subtitle F: “Shared Responsibility for Health Care”

Section 1501 as changed by amendment (See Section 10106): The Individual Mandate

  • Individuals must ensure that they and their dependents have health coverage every month starting in 2014.
  • If individuals fail to get themselves and their dependents covered, they will pay a penalty for each month they and their dependents were uncovered. (see Section 1002 of the Reconciliation Act)
  • The penalty in 2014 will be $95 or 1% of income, whichever is higher
  • The penalty in 2015 will be $325 or 2% of income, whichever is higher
  • The penalty in 2016 and after will be $695 or 2.5% of income, whichever is higher.
  • Penalties are capped at the cost of the national average for a bronze plan premium.
  • Exemptions are allowed:
  • For people in an exempt religious sect
  • For members of a health care sharing ministry
  • For Native Americans
  • For people below 100% of the poverty level who can’t afford available health insurance options
  • People who have a coverage gap of less than three months (if the gap goes longer than three months, they get no exemption for any of that time)
  • People who have proven to the Department of Health and Human Services that they have an extraordinary hardship.
  • You can not be criminally prosecuted, thrown in jail, or have your property taken away if you fail to pay the penalty.

Section 1502: Health Insurance Companies Will Report Your Coverage Status to the Government

  • Every year, the Treasury Department will send notices to people who didn’t get coverage telling them what is available to them on their State’s exchange.

Section 1503: Automatic Enrollment for Workers with Large Employers

  • Companies with over 200 employees will automatically enroll their new full-time employees in one of the health plans they offer.
  • Employees are allowed to opt out of their employer provided coverage.

Section 1512: Workers Must Be Informed of Better Options

  • If a company’s health insurance plan doesn’t cover at least 60% of medical expenses, the worker might be eligible for premium tax credits and out-of-pocket limit reductions.
  • Companies need to inform their workers about the exchanges and provide a description of the exchange’s services.

Section 1513 as amended by Section 1003 the Reconciliation Act: Employers With Over 50 Employees

  • Starting January 1, 2014, they must offer their employees health insurance.
  • If one or more of their employees received tax credits or an out-of-pocket limit reduction on the exchange, the employer will be fined $2,000 per full-time employee.
  • They will not have to pay the penalty for the first 30 full-time employees.
  • If the employer offers health insurance but the employee claims tax credits and/or out-of-pocket limit reductions on the exchange, the employer will be charged either $3,000 per employee receiving tax credits or $2,000 per full-time employee minus the first 30 employees, whichever is less.
  • Employers can not have waiting periods for health coverage of over 60 days. (Eliminated by the Reconciliation Act)
  • Fines are not tax deductible.
  • Seasonal workers – that work less than 120 days per year -do not count as full-time employees.

Section 1514: Large Employers Must Report Your Coverage Status to Government

Section 1553: No One Can Discriminate Against Anyone Else For Not Providing Doctor Assisted Suicide

Section 1558: Protection For Employees

  • Employers may not fire or discriminate against any worker who reports, testifies, or helps the government prosecute an employer that has violated the Affordable Care Act.

Section 1560: Hawaii Can Keep Its Health Care System

Section 1563: CBO Estimates The Affordable Care Act Will Reduce Budget Deficits


Subtitle A: Improved Access to Medicaid

Section 2001 as amended by Section 10201: Medicaid for Poor People

        • Starting in 2014, anyone making under 133% of the Federal Poverty Level will be eligible for Medicaid’s health benefits.
        • Medicaid’s health benefits will include the essential benefits required of all health insurance plans on exchanges, prescription drugs, and mental health services.
        • The Federal Government will pay States for the new Medicaid expenses at the following rates (changed by Section 1201 of the Reconciliation Act):
        • 100% for 2014-2016
        • 95% for 2017
        • 93% for 2019
        • 90% for ever

*The June 28, 2012 Supreme Court ruling effectively made the Medicaid expansion optional for the States. The result is that unfortunate souls making under 133% of the Federal Poverty Level and living in States that have turned down the Federal Government money will not have health care coverage.

Where the States Stand

Via: The Advisory Board Company

Section 2004 as amended by Section 10201: Medicaid for Foster Children

  • Beginning in 2014, States must cover former foster children in their Medicaid programs

Subtitle B: “Enhanced Support For the Children’s Health Insurance Program”

Section 2101: Federal Financing of Children’s Health Insurance Program (CHIP)

  • Federal Government will increase its contribution to States’ CHIP programs by 23%, funding up to 100%.

Subtitle C: “Medicaid and CHIP Enrollment Simplification”

Section 2201: Electronic Enrollment

  • By January 1, 2014, States must create websites that allow individuals to apply and enroll in Medicaid and CHIP
  • States that fail to create the website will lose their Federal Medicaid money.

Section 2202: Hospital Enrollment in Medicaid

  • Allows hospitals to determine whether a person qualifies for Medicaid based on preliminary information in order to provide them with medical assistance.

Subtitle D: “Improvements to Medicaid Services”

Section 2301: Free-Standing Birth Centers

  • Requires Medicaid cover services from free-standing birth centers.

Section 2303: Family Planning Services

  • States can, but don’t have to, provide family planning services as part of Medicaid.

Subtitle E: “New Options for States to Provide Long-Term Services and Supports”

Section 2401: At Home Services Option

  • Allows States to cover at home services – the kind that would usually be offered in an institution – to people under 150% of the poverty level.

Subtitle F: “Medicaid Prescription Drug Coverage”

Section 2501: Prescription Drug Rebates

  • Increases rebates for prescription drugs up to 100% of the cost of the drug.

Section 2502: Additional Drugs Covered

  • Drugs to help quit smoking, barbiturates, and benzodiazepines will be covered by Medicaid starting on January 1, 2014.

Subtitle G: “Medicaid Disproportionate Share Hospital (DSH) Payments”

Section 2551: Payment Reductions

  • Reduces Federal payments to certain hospitals.

Subtitle H: “Improved Coordination for Dual Eligible Beneficiaries”

Section 2602: Medicaid and Medicare Coordination

  • Creates a Federal Coordinated Health Care Office to coordinate the benefits of individuals who qualify for both Medicaid and Medicare.

Subtitle I: “Improving the Quality of Medicaid for Patients and Providers”

Section 2703: Care for Medicaid Patients with Chronic Conditions

  • Gives States the option to create teams of health professionals to manage care for Medicaid patients with chronic conditions.
  • Chronic conditions include:
  • Mental health disorders
  • Substance abuse issues
  • Asthma
  • Diabetes
  • Heart Disease
  • Obesity

Subtitle K: “Protections for American Indians and Alaska Natives”

Section 2901: No Out-of-Pocket Costs for Certain Indians

  • Indians at or below 300% of the Federal Poverty Level will not have to pay out-of-pocket costs for insurance they get through a state exchange


Subtitle A: “Transforming the Health Care Delivery System”

Section 3001: Links Hospital Payments to Performance

  • Starting in 2013, a percentage of hospital payments will be tied to performance in treating common high-cost conditions (cardiac issues, surgeries, pneumonia, etc.)

Section 3007: New System for Physician Payments

  • Secretary of Health and Human Services must create a new budget-neutral payment system that will adjust Medicare payments to physicians based on the quality of care they deliver.
  • New system will be phased in over two years beginning in 2015.

Section 3008: Penalties for Poor Performance

  • Hospitals in the top 25th percentile for rates of diseases caught inside the hospital will have a payment penalty through Medicare.

Section 3011: National Strategy

  • Secretary of Health and Human Services has to establish our national strategy to improve health care delivery and overall population health.

Section 3025: Readmissions Reduction

  • Ties Medicare payments to hospitals with the hospitals percentage of potentially preventable readmissions to the hospital.
  • The Secretary of Health and Human Services will make readmission rates for certain conditions at every hospital available to the public.

Subtitle B: “Improving Medicare for Patients and Providers”

Section 3112: Eliminates “Medicare Improvement Fund”

  • Saves over $22 billion

Rest of Subtitle creates new systems and changes the way Medicare charges paid for by the government.

Subtitle C: “Provisions Related to Part C”

Section 3201: Limited Medicare Advantage Payments (Killed by Section 1102 of the Reconciliation Act)

Section 3202: Prevents Private Medicare Advantage Plans from Overcharging

  • Prohibits private Medicare Advantage plans from charging more for basic Medicare services than actual Medicare charges.
  • Medicare Advantage plans that offer extra benefits must prioritize reductions in out-of-pocket expenses and preventative care over their extra goodies.

Section 3204: Seniors Can Return to Actual Medicare

  • Seniors will be allowed to unenroll in their Medicare Advantage plans and return to real Medicare from January 1-March 15 of every year.

Section 3209: Medicare Advantage Plan Denial Allowed

  • Secretary of Health and Human Services now has the authority to prohibit Medicare Advantage plans that significantly increase cost to customers or decrease benefits offered to seniors.

Subtitle D: “Medicare Part D Improvements for Prescription Drug Plans and MA-PD Plans”

Section 3301: Donut Hole Discount Program

  • Medicare Part D private insurance plans pay 75% of drug costs up until $2,970 is spent and then start paying 95% once the senior has spent $4,750. Between $2,960 and $4,750, the insurance company pays nothing. This window is known as the “coverage gap” or “donut hole”.
  • This section requires drug manufacturers provide a 50% discount for brand name drugs for seniors while paying out-of-pocket for drugs in the coverage gap.
  • Even though they only pay 50% of cost, the full price of the drug will count as paid so that they get out of the coverage gap sooner.
  • The Secretary of Health and Human Services was put in charge of implementation.

Section 1101 of the Health Care and Education Reconciliation Act

  • Provides a $250 rebate to seniors who enter the “coverage gap””donut hole”.
  • Closes the Medicare Part D “coverage gap” “donut hole” by 2020.

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Section 3308: Reduces Medicare Subsidy for High-Income Seniors

Section 3311: Medicare Advantage & Medicare Part D Complaint System

  • Secretary of Health and Human Services will create a system so that seniors can submit complaints about the private Medicare Advantage and Medicare Part D drug plans

Subtitle E: “Ensuring Medicare Sustainablity”

Section 3401: Changes Payment Structures for Medicare Payments

Section 3402: Freezes Premiums for High Income Seniors at 2010 Levels until 2019

Section 3403: Independent Payment Advisory Board (IPAB)

  • Creates a 15 member board to propose ways to reduce the growth of Medicare spending.
  • The board’s recommendations will not go into effect during years that the Medicare growth rate is under control.
  • The board will make non-binding recommendations during years when the Medicare growth rate is under control (added by Section 10320).
  • The board is not allowed to propose anything that rations care, raises taxes, raises premiums for actual Medicare, increases out-of-pocket expenses for seniors, or reduces benefits.
  • The board’s suggestions will take effect unless Congress enacts alternative legislation that achieves the same level of  savings.

Subtitle F: “Health Care Quality Improvements”

Provides funding for a variety of programs.

Subtitle G: “Protecting and Improving Guaranteed Medicare Benefits”

Section 3601: Nothing in This Law Can Cut Medicare Benefits

Section 3602: Nothing in This Law Can Cut Medicare Advantage Benefits


Subtitle A: “Modernizing Disease Prevention and Public Health Systems”

Section 4002: Prevention and Public Health Fund

  • Will provide $2 billion a year (starting in 2015) for public health programs that include research, health screenings, and immunizations.

Subtitle B: “Increasing Access to Clinical Preventative Services”

Section 4103: Free Wellness Plan for Medicare Seniors

  • Seniors will get a physical their first year on Medicare and risk assessments every year following without having to pay a co-pay or deductible.

Section 4107: Help to Quit Smoking for Pregnant Women on Medicaid

  • States must provide counseling and products to help pregnant woman on Medicaid quit smoking with no out-of-pocket costs.

Subtitle C: “Creating Healthier Communities”

Section 4205: Nutrition Labeling at Chain Restaurants

  • Chain restaurants with 20 or more locations have to provide the number of calories (or a calorie range for combo meals) on menus, boards, and drive-thru boards.
  • Upon request by a customer, they must be able to provide calories from fat, saturated fat, cholesterol, sodium, total carbohydrates, sugars, fiber, and protein.

Section 4207: Break Time for Nursing Mothers

  • Employers must allow nursing mothers break time to milk themselves.
  • The employers do not have to pay the mothers for that time.
  • Employers with under 50 employees are exempt.

Subtitle D: “Support for Prevention and Public Health Innovation”

Funds research and other programs.


Subtitle A: “Purpose and Definitions”

Subtitle B: “Innovations in the Health Care Workforce”

Creates a commission and provides grants.

Subtitle C: “Increasing the Supply of the Health Care Workforce”

Section 5201: Federally Funded Medical Student Loans

  • Federal government will help pay medical student loans if the student agrees to practice as a primary care physician for 10 years.
  • Decreases the penalty for students who don’t comply.

Section 5202: Increases Student Loan Amounts for Nursing Students

Section 5203: Federal Government Loan Payback for Pediatric Medicine Students

  • If the student agrees to work full-time providing pediatric services, the Federal government will help pay their student loans up to $35,000 a year.

Section 5204: Federal Government Service in Return For Loan Repayment

  • If a medical student agrees to work for the government for 3 years or longer, the government will pay up to $35,000 of that student’s loans.

Subtitle D: “Enhancing Health Care Workforce Education and Training”

Subtitle E: “Supporting the Existing Health Care Workforce”

Subtitle F: “Strengthening Primary Care and Other Workforce Improvements”

Subtitle G: “Improving Access to Health Care Services”

Section 5601: Provides Funding for Community Health Centers


Subtitle A: “Physician Ownership and Other Transparency”

Section 6001: New For-Profit Doctor-Owned Hospitals Can Not Participate in Medicare

Section 6002: Reporting on Industry Payments to Doctors

  • Starting on March 31, 2013, pharmaceutical companies and manufacturers must report any kind of payments that they make to doctors.
  • Manufacturers must report any ownership or investment relationships their doctor customers have with the company.
  • Penalties for not reporting
  • Between $1,000 an $10,000 for each payment that was not reported, capped at $150,000.
  • If the manufacturer knowingly failed to report a payment, the penalty is $10,000-$100,000 for each payment that was not reported, capped at $1,000,000.
  • The payment information reported on by manufacturers must be posted on a searchable website by September 30, 2013 (this has been delayed one year).

Section 6004: Reports on Prescription Drug Samples

  • Drug manufacturers and distributors must report the identity and quantity of drug samples requested and distributed every year.

Section 6005: Pharmacy Reports

  • Pharmacies need to report on their generic drug dispensing rate, rebates, discounts, and price concessions.

Subtitle B: “Nursing Home Transparency and Improvement”

Section 6103: Nursing Home Comparison Website

  • The Department of Health and Human Services will operate a website that will allow customers to compare nursing homes by providing staffing data, certifications, complaints, and criminal violations.

Section 6105: Creates a Standard Complaint Form

Section 6111: Penalties Reduced for Self Reporting

  • Secretary of Health and Human Services will be allowed to reduce penalties by 50% for facilities that report their own violations

Subtitle C: “Nationwide Program for National and State Background Checks on Direct Patient Access Employees of Long Term Care Facilities and Providers”

Section 6201: Background Checks

  • Secretary of Health and Human Services will establish a system for doing background checks that include fingerprints on employees of long term care facilities.

Subtitle D: “Patient Centered Outcomes Research”

Subtitle E: “Medicare, Medicaid, and CHIP Program Integrity Provisions”

Section 6401: Provider Screenings

  • Secretary of Health and Human Services must establish procedures for screening providers and suppliers for Medicare, Medicaid, and CHIP
  • All screening will include license checks
  • Secretary can impose additional screenings including fingerprinting, background checks, and random visits.
  • Providers and suppliers will have to report shady affiliations, suspended payments, if they’re excluded from other Federal programs, and/or if they’ve had their billing privileges revoked.
  • There will be an application fee of $200 for individual doctors and $500 for institutions every five years.

Section 6404: Medicare Claims Must be Made Within 12 Months

Section 6407: Physicians Must Have Face-to-Face Meeting With Patient Before Certifying Home Services

Section 6411: Recovery Audit Contractors

  • Secretary of Health and Human Services will establish contracts with auditors who will identify under and overpayments and collect overpayments for Medicaid services.
  • The Secretary is required to include Medicare Advantage and Medicare Part D.

Subtitle F: “Additional Medicaid Program Integrity Provisions”

Section 6501: Medicaid Termination

  • States must terminate a Medicaid program if they were kicked out of Medicare or another State’s Medicaid program.

Section 6502: Medicaid Exclusions

    • Medicaid must exclude an individual or company that owns or manages something that:
  • Has unpaid overpayments
  • Is suspended or excluded from participation
  • Is affiliated with someone who is suspended or excluded from participation

Section 6505: No Payments Can Go Outside of the United States

Subtitle G: “Additional Program Integrity Provisions”

Section 6601: Prohibits False Statements

  • Insurance company employees can be prosecuted and sentenced up to 10 years in prison and fined if they lie about the plan’s financial solvency, benefits, or regulatory status.

Subtitle H: “Elder Justice Act”


Subtitle A: “Biologics Price Comparison”

Subtitle B: “More Affordable Medicines for Children and Underserved Communities”



Section 9001 as amended by Section 1401 of the Reconciliation Act: Excise Tax on High-Cost Employer Paid Insurance Plans

  • Starting in 2018, there will be a on insurance companies for any health plan that costs more than $10,200 for single coverage and $27,500 for family coverage.
  • The tax is 40% of the amount of the premium above $10,200 and $27,500.
  • The tax begins at $11,850 for individuals and $30,950 for families for plans covering people over 55 and in high risk professions.
  • The tax does not apply to plans sold on the individual market; it only applies to employer paid plans.
  • The tax does not apply to stand alone dental or vision plans.

Section 9002: Employer-Paid Health Benefits Will be Included on W-2 Forms

Section 9008 as amended by Section 1404 of the Reconciliation Act: Pharmaceutical Industry Fee

  • A fee of at least $2.8 billion a year will be divided by market share and paid by pharmaceutical manufacturers and distributors.

Section 9009 as amended by Section 1405 of the Reconciliation Act: The Medical Device Tax

  • There will be a 2.3% deductible tax on the sale of medical devices to be paid by the manufacturer or importer.
  • The tax is not applied to items sold directly to the public such as eyeglasses, contacts, etc.

Section 9010 as amended by Section 1406 of the Reconciliation Act: Tax on Health Insurance Companies

  • A non-deductible fee will be divided amongst all health insurance companies based on market share every year.
  • The fee will not apply to insurance companies that make less than $50 million in net premiums.
  • The fee will not apply to government or employers.
  • Non-profits who get more than 80% of their money from government programs are exempt.
  • The fee is:
  • $8 billion in 2014
  • $11.3 billion in 2015-2016
  • $13.9 billion in 2017
  • $14.3 billion in 2018
  • 2019 and beyond: The previous year’s fee increased by the rate of premium growth

Section 9012: Eliminate Incentives For Employers to Enroll in Medicare Part D

Section 9013: Raises Threshold for Medical Expenses Deduction

  • Increases from 7.5% to 10%
  • Individuals over 65 can claim the deduction at 7.5% until 2016

Section 9014 as changed by amendment (See Section 10906): Tax on Wealthy

  • Increases the hospital insurance tax on people earning over $200,000 a year individually or $250,000 married couples filing together by 0.9%.

Section 9014 as changed by Section 1402 of the Reconciliation Act: Tax on Wealthy Wall Street Income

  • The hospital insurance tax will include a 3.8% tax on income from interest, dividends, annuities, royalties, and certain rents on people earning over $200,000 a year individually or $250,000 married couples filing together.

Section 9017 as changed by amendment (See Section 10907): Tax on Elective Medical Procedures Indoor Tanning

  • There will be a 5% tax on elective cosmetic surgery
  • There will be a 10% tax on indoor tanning services.


Buried in Section 10104: Dismissal of Fraud Cases

Screen Shot 2013-10-10 at 2.54.38 PM

              • In it’s place, they put this:

Screen Shot 2013-10-10 at 2.56.28 PM

Section 10108: Free Choice Vouchers

  • If a worker’s health insurance contribution through their employer will be between 8%-9.8%, their employer has to offer them a voucher that will pay the employee’s share if the worker would like to pick their own plan on the exchange.

Section 10330: Update Computer Data Systems for Medicare and Medicaid

  • Secretary of Health and Human Services must make a plan and determine the budget for modernizing the computer and data systems for Medicare and Medicaid

Additional Provisions from The Health Care and Education Reconciliation Act

Section 1103: Stops Medicare Advantage Excessive Profits

  • Medicare Advantage plans must spend 85% of their revenue on medical costs rather than profit and overhead.

Additional Information:

Intro and Exit Music: Tired of Being Lied To by David Ippolito (found on Music Alley by mevio)

Music: Begging for Change – Healthcare Blues by Peter Alexander

Is Obamacare Enough? Without Single-Payer, Patchwork US Healthcare Leaves Millions Uninsured, Democracy Now, October 7, 2013.

Treasury Department Memo (describes why the large employer reporting requirements are delayed for a year), July 2, 2013.

Obamacare Medical Loss Ratio Saved $1.5 Billion in 2011, Insurance Journal, December 5, 2012.

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