Patient Protection and Affordable Care Act
The Patient Protection and Affordable (PPACA), which was signed into law by President Barak Obama in March of 2010, is also popularly known as “Obamacare.” It is one of the most significant changes that has made been on the modern U.S. healthcare system, along with the 1965 passage of Medicare and Medicaid. Currently, the PPACA is divided into nine implementation titles or phases; intended changes are to occur over a series of years (from 2010 to 2018), with the bulk of these changes occurring between 2010 and 2014. The PPACA’s main objective is to decrease the number of uninsured Americans, which at 2009 was at about 17 percent of the population (or just shy of 51 million people). The Congressional Budget Office has also predicted that the PPACA will lower overall deficit costs within the healthcare system, as well as Medicare spending, in the long-term.
The main provisions of “Obamacare” include:
- An increase in federal subsidies. Families 100 to 400 percent above the federal poverty level will receive federal subsidies in order to purchase insurance.
- A Guaranteed Issue. This provision will enforce insurers to offer the same premium to all applicants of the same age and geographic location, despite pre-existing conditions (with the exception of tobacco) and/or issues related to gender.
- Healthcare Exchange. A health insurance “marketplace” will be offered to all individuals and small businesses so that comparisons of policies and premiums can be made before insurance is purchased.
- Individual Mandate. All individuals not covered by insurance must purchase approved health insurance or they will be subjected to penalties (this can be waived in cases of financial hardship).
- Bundling. Several Medicare reimbursements will be changed from “fee-for-service” to “bundled payments.”
The funding of PPACA’s provisions will mainly be provided through key and minor tax increases (although it is important to note that since income levels are not adjusted for inflation, this also means increasing taxes will mainly affect middle incomes) during the next ten-year period. There will also be increased taxes on pharmaceuticals and a ten percent federal sales tax increase on indoor tanning services.
The main tax increases include:
- An increased Medicare tax rate of about .9 percent and an additional tax of 3.8 percent on unearned income for high-income taxpayers.
- Annual fee charges on health insurance providers.
- A 40 percent excise fee on health insurance annual premiums in excess of $10,200 for an individual or $27,500 for a family.
- Annual fees on manufacturers and importers of branded drugs.
- Offsets include reducing Medicare policies, hospital payments and Advantage policies.
For those wanting to learn more about the ins-and-outs of the PPACA, the following is a brief collection of links that will help you untangle the nuances and details of the health care reform act.
- CNN, Basics of Health care reform issues: CNN gives a broad overview of the issues involved with Obama’s healthcare overhaul and reform.
- CNN, Timeline of the health care law: CNN also provides a useful timeline explaining the nine different phases or titles of the PPACA.
- Kaiser Family Foundation, Health Reform Subsidy Calculator: The Kaiser Family Foundation provides a helpful “health reform subsidy calculator,” which allows users to estimate associated healthcare costs, as well as unsubsidized health insurance premium.
- HealthCare.gov: The Department of Health and Human Services website provides a website explaining the PPACA, including coverage and pricing options.
- HealthReformGPS.org: Provided by the analysts at the Hirsh Health Law and Policy program of the George Washington University School of Public Health and Health Services, this online tool allows you to explore different dimensions of the healthcare reform act.