The Federal Health Reform represents the biggest change in the federal health system since the enactment of Medicare in 1965.
The Patient Protection and Affordable Care Act, P.L. 111- 148 (PPACA), was signed on March 23, 2010 by President Barack Obama. The Health Care and Education Affordability Act of 2010, P.L. 111-152 (the “Reconciliation Bill”), which was signed on March 30, 2010, is a package of amendments to PPACA and it contains most of the provisions that address Puerto Rico. PPACA and the Reconciliation Bill are collectively referred to as ObamaCare, Affordable Care Act (ACA) or the Federal Health Reform.
The main purpose of ACA is to increase the number of U.S. citizens with health insurance coverage. It includes major provisions addressing coverage expansion, controlling health care costs, insurance market reforms, premium assistance, creation of health insurance exchanges, improving health delivery system reforms, among others. The Federal Health Reform represents the biggest change in the federal health system since the enactment of Medicare in 1965.
The MCS Health Policy Program was created for the purpose of conducting research and analysis on public policy at the federal and local level. It interprets the policy’s impact on the local market and individual level in Puerto Rico. The program counts on the support of graduate students in master's and doctoral level from the Graduate School of Public Health, Medical Sciences Campus of the University of Puerto Rico.
Individuals
New Patient Protections & Bill of Rights such as:
- Expansion of dependent coverage for young adults until they reach 26 years of age.
- Elimination of Lifetime & Annual Dollar Limits.
- Coverage of preventive health care services with $0 cost sharing (deductible, copayments and coinsurances). New guidelines developed for coverage of recommended women preventive services with no cost sharing requirements.
- New Essential Health Benefits defined.
- Prohibition of exclusion because of preexisting conditions and guaranteed renewability of coverage (effective for adults starting 2014).
- New standardized grievances and appeals processes.
- No rescission of coverage, except for fraud or intentional misrepresentation.
More transparency and visibility for individuals and group plans with the establishment of standardized Summary of Benefits Coverage & Uniform Glossary of Insurance Terms.
Federal Individual Tax Credit Subsidies & Tax Penalties not applicable in Puerto Rico (Individual mandate).
Employers
Essential health benefits to employees.
Benefits enhancements may impact the cost of health care coverage.
Will require employers to inform the value of the employees’ health benefits in the W-2 form.
Establishes the Summary of Benefits Coverage (SBC) & Uniform Glossary of Insurance Terms, which requires providing employees with a standard document. Federal Tax Credit Subsidies & Tax Penalties not applicable in Puerto Rico (No employer mandate).
Federal Tax Credit Subsidies & Tax Penalties not applicable in Puerto Rico (No employer mandate).
Health Care Providers
Establishes procedures for screening, oversight and reporting for providers that participate in Medicare and Medicaid.
Establishes a Medicare program to pay hospital based on performance on quality measures.
Reduces Medicare payments that would otherwise be made to hospitals to account for excess (preventable) hospital readmissions and hospital-acquired conditions by 1%.
New incentives for providers to adopt changes towards Electronic Health Records.
Medicare Beneficiaries
Authorizes Medicare coverage for personalized prevention plans, including a comprehensive health risk assessment.
Requires pharmaceutical manufacturers to provide a 50% discount on brand-name prescriptions filled in the Medicare Part D coverage gap beginning in 2011 and begins phasing-in federal subsidies for generic prescriptions (closing the donut hole).
Imposes rate reductions in payments to Medicare Advantage organizations, estimated to be over $5 billion by 2019.
Restructures payments to private Medicare Advantage and prohibits plans from imposing higher cost-sharing requirements for some Medicare covered benefits than is required under the traditional fee-for-service program.
Increase of Medicare payroll tax from 1.45% to 2.35% to those who earn more than $200,000 per year.
New stars rating System for MA Health Plans is focused on quality of care and improvements of member experience.
Health Insurance Organizations
New Patient Centered Outcome Research Institute (PCORI) Fee to be paid by heath insurance issuers which is equal to $1 for every covered life for the first plan or policy year ending on or after October 1st 2013; $2 for policy or plan years ending after September 30 2013; and for plan or policy years beginning on or after October 1st 2013, the fee will be indexed to increases in National Health Expenditures.
Imposes rate reductions in payments to Medicare Advantage organizations, estimated to be over $5 billion by 2019.
Restructures payments to private Medicare Advantage and prohibits plans from imposing higher cost-sharing requirements for some Medicare covered benefits than is required under the traditional fee-for-service program.
Requires Medicare Advantage plans to have medical loss ratios no lower than 85%.
Requires a health insurance issuer to provide an annual rebate to each enrollee if the ratio of the amount of premium revenue expended by the issuer on clinical claims and health quality costs is less than 85% in the large group market and 80% in the small group and individual markets.
Reduces rebates paid to Medicare advantage plans and provides bonus payments to high quality plans (Stars Rating System).
Starting January 2014, establishes a new 2% health insurance premium tax imposed by section 9010 of the ACA which applies to any covered entity providing health insurance.
Imposes new market changes in private insurance such as guaranteed issue and renewability, consumer protections, and regulation of rate adjustments.
Prohibits group and individual insurance plans to exclude coverage because of preexisting conditions in order to guarantee issue and renewability.
