Health care for (almost) everyone: Key elements of the law
Key Elements of the Law “An act to provide access to affordable, quality, accountable health care.”
For the first time in the United States, the law requires that anyone over 18 have “minimum creditable coverage” by end of 2007 and:
- exempts those who can document that no “affordable” policy is available (see table at far right for premiums established as affordable); even if affordable coverage is available, can appeal to the state for a waiver on religious grounds or by demonstrating hardship—such as fire, mortgage foreclosure, expenses due to illness;
- imposes a penalty for not complying with the mandate: in the first year, individuals lose 2007 individual income- tax exemption of $219; increases to a monthly fine in 2008, not to exceed more than 50 percent of the premium for the least expensive plan that provides “minimum creditable coverage.”
Commonwealth Health Insurance Connector Authority
An independent public authority governed by a ten-member board was established to:
- set policy on the individual mandate, including what services should, at a minimum, be covered by insurance plans, and to define what is affordable according to a sliding scale of premiums;
- approve new lower-cost insurance plans;
- create a mechanism for selling these plans to individuals and small businesses and help residents find the right plan for them.
Definition of what’s “affordable”
The Connector defines monthly premiums as affordable, based on income. Premiums are subsidized for those earning less than three times the federal poverty limit are expected to afford
Businesses with 11 or more full-time employees must:
- make a “fair and reasonable” contribution to their employees’ health insurance (either at least 25 percent of full-time employees must be enrolled in the employer’s health plan, or the employer pays at least 33 percent of employees’ premium costs) or else pay an annual charge of up to $295 per full-time employee who is uninsured, based on the amount of free care used by their uninsured employees;
- set up Section 125 plans, which allow employees to pay for insurance premiums with pre-tax dollars; if they don’t and their employees use free care, may be required to pay a surcharge.
Subsidized health care Insurance
A new program available to adults whose income is below three times the federal poverty level and who do not have employer coverage available to them. Eligible people enroll in one of four managed care plans, and their insurance premiums are subsidized on a sliding scale, based on annual income.
Three times the federal poverty level (FPL) is:
|Individual = $10,210||three times FPL = up to $30,630|
|Family of two = $13,690||three times FPL = up to $13,690|
|Family of three = $17,170||three times FPL = up to $51,510|
|Family of four = $20,650||three times FPL = up to $61,950.|
With eligibility expanded and past cuts restored, the program:
- covers children in families earning up to three times the federal poverty level;
- restores cuts in dental and vision benefits to 2001 levels;
- Increases Medicaid rates to hospitals and physicians, contingent on meeting quality-care performance benchmarks (e.g., reductions in racial and ethnic disparities).
New insurance plans
Reforms in the private-insurance market have yielded affordable insurance plans that:
- merge the individual and small-group insurance markets to reduce the nongroup premiums;
- create new low-cost (and lower-benefit) Young Adult plans for those age 19 to 26 not covered on the job or through a parent’s plan;
- extend dependent benefits to older children, by allowing those age 19-26 to stay on their parents’ plan up to age 26 or for two years after they are no longer dependent (e.g., a full-time student and not self-supporting), whichever comes first.
- Quality and Cost Council Committee convened to put into action health-care quality improvement goals and performance benchmarks aimed at containing costs and improving care quality (which also involves reducing ethnic/racial health disparities).
Health Safety Net
Replaces the Uncompensated Care Pool, retaining sufficient funds to provide assistance for people who still lack insurance (i.e., those who can document that they can’t afford insurance). But the ultimate goal is to move people from uncompensated care to insured care and reallocate funds from Uncompensated Care Pool to help pay for the subsidized programs.