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Affordable Care Act (ACA) Summary and Updates

By Julia Day, MSW
Contributions from Bryon MacDonald
Disability Benefits 101 Information Services
California Work Incentives Initiative, World Institute on Disability


May 28, 2010

In late March of 2010, the U.S. Congress finished passing the Patient Protection and Affordable Care Act (H.R. 3590) and the Health Care and Education Reconciliation Act of 2010 (H.R. 4872). Soon after, President Obama signed these pieces of legislation into law, creating Public Law 111-148 (the Patient Protection and Affordable Care Act) and Public Law 111-152 (the Health Care and Education Reconciliation Act of 2010). Together, these laws are commonly known as the Affordable Care Act (ACA).

These laws will result in significant reform of our nation’s health care system, including extending health care coverage to many more millions of Americans.

The changes in the new laws do not all happen immediately, but will take effect over a period of years, through 2019. We are providing this timeline, showing when major reforms are expected to take effect, so that you can prioritize what to focus on first. This tool is designed to give more detailed information about changes that are coming soon, while briefly summarizing the changes you can expect down the road.

We will update this timeline periodically and share more information on the reforms as it becomes available.

Changes Important for People with Disabilities

Many changes brought about by these new laws are of particular significance to people with disabilities.

            These items important to people with disabilities will be marked using this arrow bullet.

Implementation Timeline for Major Health Care Reforms

In Progress Now:

            Creation of High-Risk Pools

            Starting on July 1, 2010, people who can’t get insurance because of pre-existing conditions will have immediate access to high-risk pools that don’t exclude people with pre-existing medical conditions.

            The creation of high-risk pools is a temporary measure; the pools will end on January 1, 2014, when government-regulated insurance exchanges start operating. By this date, the law also mandates that insurance companies will no longer be able to deny people coverage because of pre-existing conditions.

            To apply to a high-risk pool, you must be a U.S. citizen or lawfully present in the United States; have had no health coverage for the last 6 months; and have a pre-existing condition, which will be defined by the U.S. Department of Health and Human Services.

            People will have to pay premiums to participate in the pools. However, the law limits premiums to “standard rates”, defined as the average amount private insurers in the state charge for premiums for similar coverage.

            The law says that older people can’t be charged more than four times what younger people are charged to participate in the plan.

            There are limits on annual out-of-pocket expenses for participants in the pools ($5,950 for an individual) and plans have to cover at least 65% of the costs allowed by the plan.

            The federal government gave each state the option to run the high-risk pools on their own, with federal funding, or else to have the eligible people living in their state use a federal fallback high-risk pool that the federal government will run. 29 states chose to run the pools themselves, 19 states chose to let the federal government run them, and two have not responded. A list of these states can be found at HealthReform.gov.

            34 states already currently run high-risk pools. They may continue to run these pools if they meet the standards in the law, or they may change them or set up new pools. Regardless of which option a state chooses, the pools will be 100% federally funded. The law sets aside $5 billion in federal funding to help pay for these pools. This funding becomes available on July 1, 2010.

            High-risk pools in each state will operate under the standards described in the law. However, the pools may be different in each state. On May 10, 2010 states received applications for state-run pools, so the process of designing these pools and deciding on the details is happening now.

            Currently, Medicaid’s Money Follows the Person grants provide flexible funding that allows a person who needs long-term care services to receive services that are the most appropriate to their needs and preferences. As a person’s needs change over time, a person has the flexibility to move from institutional to community-based services and still keep this funding. Health care reform extends these grants until September 2016.

By September 2010:

            Rescission Outlawed

            Starting on September 23, 2010, insurance companies won’t be allowed to drop people’s coverage when they get sick (this is known as “rescission”), something that currently happens to thousands of Americans each year.

            The Obama Administration, leaders in Congress, and the Department of Health and Human Services Secretary have urged health insurance companies to voluntarily make changes required by health care reform right now, instead of waiting until the law requires them to.

            Many health insurance companies have announced that they will stop using rescissions. Among the companies that have agreed to voluntarily end using rescissions before the law requires them to do so are UnitedHealthcare and WellPoint, the nation’s largest insurer.

            Insurance companies won’t be allowed to deny coverage to children under 19 because of pre-existing conditions.

            Insurance companies won’t be allowed to put caps on the amount they will spend on lifetime coverage costs. This means that treatments for ongoing medical conditions such as cancer, AIDS, or diabetes will be protected from these coverage caps.

            Children will be able to stay on their parents’ insurance policies until they are 26. Right now, health plans often drop children from their parents’ plans when they turn 19 or finish college.

            Starting June 10, 2010, each beneficiary of Medicare’s prescription drug plan who falls into the coverage gap known as the “donut hole” will get a $250 rebate this year; over time, the law will close the gap, reducing out-of-pocket drug costs for people on Medicare Part D.

            All new group health plans and plans in the individual market will have to provide preventive services, free from deductible or copayment charges.

By 2011:

            Beginning on October 1, 2011, the Medicaid Community First Choice (CFC) Option will give states the option to allow people with disabilities who are eligible for institutional care to choose community-based services instead.

            This will allow more people with disabilities who are on Medicaid to stay in their homes, instead of going into an institution.

            The CFC Option makes community-based services the primary option for people with disabilities who are on Medicaid and have income below 150% of the Federal Poverty Level, who would otherwise have to be in institutional care.

By 2012:

            The CLASS Act Begins

            The Community Living Assistance Services and Support Act (CLASS Act) provides for voluntary, self-funded, long-term care insurance through the workplace. This insurance will help pay for long-term care costs for people with disabilities and elderly people.

            People who participate in the program will have to pay premiums for five years before they are eligible to collect benefits. There will be no income or asset limit in order for people to participate in this program or collect payments.

            There will be no screening for pre-existing conditions. People with disabilities who participate will be able to start receiving cash benefits from this insurance after five years, and they will also be able to use their insurance to provide for their long-term care in the future.

            After five years, if they meet the eligibility criteria, people can begin collecting payments, which will be a minimum of an average of $50 a day. There will be no lifetime benefit limit.

            People will be able to use the cash benefit to pay for their choice of a wide variety of their long-term care needs, including home health care workers, assistive technology, adult day care, or transportation. It can also be used to pay for the cost of assisted living. 

            The program will be run by Departments of Health and Human Services (HHS) who will write the rules about how much the premiums will cost and what disabilities qualify for the insurance benefits. These rules must be written by October 1, 2012.

            This program will make long-term in-home support services more affordable, and will help people with disabilities remain in their homes and communities.

            People on Medicare who fall within the prescription drug coverage gap (the “donut hole”) will get a 50% discount on brand name prescription drugs.

            People on Medicare will be able to get free prevention and wellness services each year.

By 2014:

            The Access Board develops accessibility standards in a variety of settings, according to the ADA and other laws.  The Access Board has been authorized to establish new accessibility standards for medical equipment, which will be developed by 2014. The new standards should provide for independent access to medical equipment to the greatest extent possible.

            Insurance companies will no longer be able to deny anyone coverage because of a pre-existing condition, or to cancel coverage because of the onset of a new health condition. This will allow people with disabilities more access to private health coverage.

            Medicaid, which provides health care coverage to low-income people, will become more widely available. It will expand to cover more low-income people, including adults without children and adults without a disability.

            Because Medicaid will include low-income adults without disabilities, people with disabilities will no longer have to go through a complicated disability determination process to become eligible for Medicaid. This will also benefit people with disabilities who did not meet the former Medicaid definition of disability.

            The expansion will include people with incomes up to 133% of the Federal Poverty Level (about $28,000 for a family of 4).

            Insurance companies will be limited in their ability to charge higher rates because of health status, gender, or other factors. Higher premiums will be permitted based on age (no more than three times the amount charged for young people), geography, family size, and tobacco use.

            States will create health insurance exchanges, which will provide a way for individuals and small businesses to buy more affordable coverage. The exchanges will allow people to comparison shop for standardized health packages, and will give tax credits to help people afford coverage.

            Most employers will be required to provide coverage, or pay a fine if they don’t (although there will be exceptions for small businesses with less than 50 employees). This will make employer-sponsored health coverage more widely available.

            Most individuals will be required to get coverage, or to pay a fine if they don’t. However, there will be healthcare subsidies to help people buy coverage if their income is below 400% of the Federal Poverty Level (about $88,000 a year for a family of 4). If affordable coverage is not available to an individual, they will not be penalized.

By 2019:

            The “donut hole” gap in Medicare Part D drug coverage will be fully phased out, significantly reducing out-of-pocket costs for people on Medicare.

            Health coverage is expected to have expanded to an additional 32 million people by the end of 2019, and to cover 95% of non-elderly legal U.S. residents.


Sources:

Patient Protection and Affordable Care Act (Public Law 111-148)

Kaiser Family Foundation

The New York Times

Speaker of the House

HealthReform.Gov

Centers for Medicare & Medicaid Services

Departments of Health and Human Services

McClatchy Newspapers

The National Council on Independent Living

California HealthCare Foundation

Congressional Budget Office

House Committees on Ways and Means, Energy and Commerce, and Education and Labor

 

Additional Information:

For additional information and updates, please visit: www.HealthReform.Gov