Patient Protection and Affordable Care Act

The Patient Protection and Affordable Care Act (often referred to as Obamacare, healthcare reform, PPACA, or the ACA) was a law that passed on March 23, 1010. In this United States law, new regulations were put in place regarding how healthcare coverage was offered, administered, and accepted.

This act has designed specific rules for employers and employees as well as insurance companies and healthcare providers. Because so many different groups are regulation, it makes sense that there are also many different provisions.

There are three primary departments that regulate PPAA, each of which offer guidance on regulations:

  1. The Internal Revenue Service (IRS)
  2. The Department of Labor (DOL)
  3. Department of Health and Human Services (HHS)

The Purpose of Patent Protection and Affordable Care Act

The major focus of PPACA is to broaden healthcare coverage so that more people living in the United States would benefit from a better health care plan. Progress in building PPACA included putting in place certain restrictions on insurance companies. These new regulations and restrictions put on insurance companies make it easier to offer more improved coverage to individuals. Because of more regulations, healthcare coverage prices have gone up.

These new mandates were designed to make sure that more individuals would obtain better health coverage. When more people are pursuing health insurance coverage, the cost of that coverage goes down.

This new healthcare coverage balance has raised quite a few questions and create a handful of arguments who wish to learn more about the effects of said balance. As PPACA continues to build and improve, the arguments that currently exist will adjust with the new modifications.

Some people worry about ancillary matters including issues that could raise from healthcare exchanges or smaller networks for healthcare. Other wonder if PPACA will truly better the health care of the United States.

Patient Protection and Affordable Care Act Obstacles

Since the very beginning of PPACA, this relatively new law has already faced many obstacles and been the subject of controversy. The PPACA is routinely challenged by countless groups and individuals for various reasons. The PPACA has faced challenges with implementation, legalities, and politics. Above all, the biggest question that has come to the table of whether or not the individual mandate of PPACA is constitutional.

This matter was brought to the Supreme Court of the United States in National Federation of Independent Business, et al. v. Sebelius, Secretary of Health and Human Services et al. The Supreme Court provided its stance on the case on June 28, 2012.

Some people have worried about how well PPACA would be able to issues excise taxes and subsidies in the states that do not maintain an exchange of health insurance. Both the Pruitt v. Sebelius and the Halbig v. Sebelius case challenged these issues.

The HHS mandates also require employers to provide their employees with contraceptive coverage, which has also been repeatedly challenged by various entities.

On the political landscape, different groups and individuals have routinely made efforts to completely repeal the act. Other avenues people have explored include attempting to defund the implementation of the bill and amending some of the provisions.

There have been a certain number of implementation problems with PPACA including technical difficult with the enrollment on www.healthcare.gov, inefficient regulation clarity, and the ability to attract more insurance companies to take part in the state exchange of health care coverage. Some of these matters could be resolved in the future while others might never be fully resolved.

Grow Access to Coverage 

  • Mandate that the overwhelming majority of legal residents and U.S. citizens have adequate health coverage.
  • Allow people to buy health care coverage through state-based American Health Benefit Exchanges. If an individual or family has an annual income that is 133-400 percent above the poverty level (which, as of 2013, is set at $19,530 for a three-member family), allow them to have access to premium and cost-sharing credits. Along allow small business, to buy health care coverage through a separate exchange program
  • Penalize employers when their employees get tax credits from an Exchange.
  • Broaden Medicaid so it includes 133 percent of the current federal poverty level.
  • Penalize any citizens who do not enroll in health care coverage. This penalty must be $695  every year with a three time puerility maximum ($2085) or tax 2.5 percent of household income

Requirements for Coverage

In 2014, the penalty for not having health insurance is $95.

For 2015, the penalty goes up to $35, and by 2016 the fee is $695. An alternative to the flat-fee penalty would be 1 percent tax on income in 2014, 2 percent tax on income in 2015, and 2.5 percent tax on income in 2016.

The penalty fees went up in 2016 and will continue to go up based on the cost-of-living adjustment.

There are potential exceptions for the following groups of people or reasons: undocumented immigrants, religious objections, incarcerated people, anyone who is not enrolled in coverage for three months or less, and someone experiencing financial hardship,

Medicaid Basics

Broaden Medicaid to anyone who is not eligible for Medicare and under 65 years of age including pregnant women, children, parents, and adults who do not have dependents, so long at their income does not exceed 133 percent of the current poverty level.

Though the exchanges, every adult eligible for coverage receive a benchmark benefit package.

The Supreme Court rules in favor of the Medicaid Expansion, however it reduces HHS’s power to enforce this expansion. This means the options to expand Medicaid is now done a state-by-state basis.

In order to afford coverage the every new, eligible adult, states will receive the following funding:

  1. 100 percent federal funding from 2014-2016
  2. 95 percent federal funding in 2017
  3. 94 percent federal funding in 2018
  4. 93 percent federal funding in 2019
  5. 90 percent federal funding in 2020 and every year after that

If a state has already initiated the expansion of eligibility for anyone with in with income no higher than 100 percent above the poverty line, there is an incremental increase in FMAP (federal medical assistance percentage. This increase is implemented to ensure that these state are granted the same amount of other states.

As of April 2010, states were granted the ability to expand Medicaid to any adult without children, while still receiving FMAP for four years.

Implementing CHIP

States are required to provide various income eligibility levels to benefit children in both Medicaid and CHIP (Children’s Health Insurance Program) from now until 2019. The benefits and regulations of CHIP continue to be maintained by the government. As of 2015, states received a point increase of 23 percent in with a cop of 100 percent in the CHIP. If a child is eligible for CHIP but it not able to be in the program because of caps on enrollment, they can receive tax credits through Exchanges.

Premium and Cost-Sharing to Individuals

Through Exchanges, citizens who have met the income limits have less access to both cost-sharing subsidies and premium credits. Anyone who is offered health care coverage by their employer does not qualify for premium credits either. The only exception is if the actuarial value employer’s health plan isn’t at least 60 percent.

Premium credits are granted to legal residents of the United States are not able to benefit from Medicaid in the first five years of living in the country. 

Premium credits are connected to the silver plan’s second love's level. It is set on a moving scale so all premium contributions cannot exceed the income percentages specified below:

Up to 133 percent FPL: 2 percent of income

133-150 percent FPL: 3 – 4 percent of income
150-200 percent FPL: 4 – 6.3 percent of income
200-250 percent FPL: 6.3 – 8.05 percent of income
250-300 percent FPL: 8.05 – 9.5 percent of income
300-400 percent FPL: 9.5 percent of income

Anyone receiving subsidies every year will experience an increase in their premium contributions. This increase should represent the dramatic premium growth. As of 2019, there will be even more changes added to premium contributions to correlate with the premium growth. For anyone to be able to receive federal premiums credits, that will need to provide proof of both citizenship status and level of income. According to the Hyde amendment, if a woman needs an abortion to save her life or for cases regarding incest or rape, offer extended coverage.

If someone want to purchase health care coverage that also covers abortion services that exceed the federal funds already put in place, those funds cannot go toward the purchase of the abortion. These funds have to be separate from state funds and private premium payments.

New Taxes for Health Insurance

Apply taxes to anyone who does not have the proper health care coverage, starting with a fee of $695 for every year they do not have coverage. Do not include the cost of any drugs that were not doctor-prescribe and do not permit them to be refunded thought the health FSA or HRA. These over-the-counter drug purchases also cannot be reimbursed because of an HAS or Archer Medical Savings Account tax-free basis. This became as effective on January 1, 2011.

On that same date, there was an increase in taxes of health savings account distributions as well as Archer MSA distributions that weren’t directed towards 20 percent of specified medical costs.

As of January 1, 2013, flexible spending account contribution sizes were minimized. The rate was $2,500 every year. On that same date, the itemized deduction limit was upped for medical costs that were not refunded. This increase did not apply to senior citizens (anyone over the age of 56 years). On January 1, 2013 the part A of Medicare (hospital insurance) experienced an increased on taxes. This applied to anyone who earned over $200,000 for individuals and $250,000 for married couples. Anyone over the age of 55 who was not eligible for Medicare now experience a growth in their threshold amounts. This also applies to anyone working a high-risk job. Their threshold amounts went up by $1,650 for single person coverage and $3,450 for family health care coverage. In the event that health care expensive continue to go up, specifically higher that was previously anticipated for the year of 2018, these threshold amount could go up as well. If a firm experiences increased costs in health care due to age or gender of their employees, the threshold amount will go up. The tax amount is equivalent to more than a third of the health plan’s value, should that plan be higher than the threshold limit. The tax must also be required of the entity or individuals issuing the health insurance policy. In regards to self-insured plans, the personnel responsible for this would be either the employer or the plan administrator.

With flexible spending accounts for health FSA, the health insurance plan’s value encompasses reimbursements. This also applies to the HRA as well as the HAS and any supplementary coverage. This does not, however, cover vision or dental care. If any employers is the recipient of retiree drug subsidy payment under Medicare Part D, the tax deductions must be removed.

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