What Wonders Have What Wonders Have

They Wrought?They Wrought?

The Patient Protection and

Affordable Care Act

The Affordable Care and Patient The Affordable Care and Patient

Protection Act Protection Act

o 2,409 pages

o 477,520 words

o Reconciliation Package• 153 pages• 34,000 words

o 13,000 Pages of Regulations

Prepared by the Joint Economic Committee Republicans

Health Care After Health Care After ReformReform

5 Key Components5 Key Components• Individual Mandate

• Employer Mandate

• Insurance Regulation

• Subsidies & Medicaid Expansion

• Insurance Exchange

How Much Will It How Much Will It Cost?Cost?

Paying for PPACA

• New Taxes $1 Trillion

• Debt $1.48 Trillion

$1 Trillion in Taxes Under PPACA

1. Excise Tax on Charitable Hospitals2. “Black liquor” tax hike, a tax on a type of

biofuel3. Tax on Innovator Drug Companies4. Blue Cross/Blue Shield Tax Hike5. Tax on Indoor Tanning Services6. Codification of the “economic substance

doctrine” This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans

7. Medicine Cabinet Tax: HSAs, FSAs and HRAs taxed when buying over the counter medicine

8. HSA Withdrawal Tax Hike9. Surtax on Investment Income10. Hike in Medicare Payroll Tax

11. Tax on Medical Device Manufacturers12. High Medical Bills Tax13. Flexible Spending Account Cap – aka “Special

Needs Kids Tax”14. Elimination of tax deduction for employer-

provided retirement Rx drug coverage in coordination with Medicare Part D

15. $500,000 Annual Executive Compensation Limit for Health Insurance Executives

16. Individual Mandate Excise Tax17. Employer Mandate Tax18. Tax on Health Insurers19. Excise Tax on Comprehensive Health

Insurance Plan

The Law Imposes 19 New Taxes

Source: Americans for Tax Reform

My Insurance My Insurance Premium?Premium?

• Premiums Will Double in Next 6-10 YearsPremiums Will Double in Next 6-10 Years

• Change as Result of PPACAChange as Result of PPACA

o Big Business:Big Business: No Change to 3% Savings No Change to 3% Savings

o Small Business:Small Business: No change to 1% Savings No change to 1% Savings

o Individual Policy:Individual Policy: 10-13% Increase 10-13% Increase

o Young & Healthy:Young & Healthy: 17-95% Increase 17-95% Increase

Does PPACA Ration Care?

No Direct Rationing

Independent Payment Advisory Board (IPAB)

• Starting in 2017

• Not a “death panel”

• Base Closing-Style Panel

• If Medicare spending exceeds GDP + 1, IPAB must recommend cuts.

• Congress can reject recommendations in total. If Congress does not act, recommendations are implemented

• Cannot recommend cuts in benefits, increase out-of-pocket expenses or premiums, or restrict eligibility. Cannot cut hospital payments until 2020. What’s left?

Potential Problems• No Judicial Review

• Physicians may stop accepting Medicare patients

• 15 percent of hospitals and nursing homes that provide Medicare services could “become unprofitable” over a decade, according to CMS

Universal Coverage?Universal Coverage?

Some PPACA Benefits• “Donut Hole” closing

• Improved coverage for screening and preventive care

• Experiments in cost reduction: ACOs, Medical Homes, P4P

• $ for community health centers

Issues for North Carolina

• Should North Carolina Establish an Exchange?

• Should North Carolina Expand Medicaid?

Status of Health Insurance Exchanges

Status of Medicaid Expansion Decisions

Medicaid Expansion in North Carolina

2010• Medicare Beneficiary

Drug Rebate• Dependent Coverage

Extended to Age 26• Health Plans Required to Cover

Preventive Benefits2011

• Minimum Medical Loss Ratio for Insurers

• Medicare Advantage Payment Reductions

• Increased Medicare Premiums for High-Income Beneficiaries

2012• New annual fees on pharmaceutical

industry• Medicare Value-Based

Purchasing• Reduced Medicare Payments for

Hospital Readmissions

2013• Begins Phasing in Subsidies to Close

Medicare Part D 'Donut Hole'• Establishes Flexible Spending Account

Limits• Medicare Part A Tax Increase• Tax on Medical Devices• Cuts in Medicare DSH Payments

2014• Expanded Medicaid Coverage• Health Insurance Exchanges• Individual Mandate• Employer Mandate• No Annual Limits on Coverage• Essential Health Benefits• New Fees on Health Insurance Sector

2017• IPAB

2018• New Tax on Comprehensive Insurance

Plans

PPACA Timeline

Enacted

Pending