Health Care Reform

Despite many signs pointing to a bumpy year ahead for the healthcare industry, one thing is certain: technology will play a dominant role in whatever comes next. In fact, healthcare providers will feel its impact more strongly in 2017.

Transparency measures on drug pricing, blockchain-aided healthcare information management systems, artificial intelligence-powered diagnostic imaging equipment, and a technology-assisted patient-carer-infrastructure deployment and coordination systems are among the most predicted healthcare eventualities for the year. Technology giant Apple is also expected to enter the healthcare information space with new offerings on the horizon.

In addition, venture capital firms are projected to make more investments in healthcare technology, thanks to promising emergent technology, policy changes to the FDA and access to cash. Behavioral medicine won’t be left behind in terms of technology, as digital health toolkits get adopted in post-care settings and rehabilitation facilities. Consumer-friendly devices for point-of-care testing are also expected to take off. Lastly, consumers’ decision will have more weight in their participation and decision in all stages of their treatment.

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Timeline for PPACA AKA Obama Care

September 1, 2013 to March 31, 2014 - Open enrollment for individual/family plans. Rating factors are age, zip code and whether you are a smoker (50% rate up). Applies to persons aged under 65.

Coverage starts January 1, 2014 - If you have no coverage for all or part of 2014 you will be subject to a tax penalty as follows:

  • 2014 - 1% of Line 32 (adjusted gross income)
  • 2015 - 2% of Line 32 (adjusted gross income)
  • 2016 - 2.5% of Line 32 (adjusted gross income)

In 2014 enrollment closes on April 1st except for ‘special circumstances’ such as moving house, loss or change of job, divorce etc. Enrollment re-opens October 15, 2014 until December 7, 2014.

In California the government insurance exchange is Covered California. There are 5 tiers of plans in both individual and group exchanges. In the individual exchange you may qualify for a subsidy if your income is less than 400% of the FPL (Federal Poverty Level). Incomes at or under 100% of the FPL will be assigned to Medicaid.

To qualify for a subsidy you will need to complete a questionnaire detailing the occupants of your home and household income.

You may purchase coverage outside the exchange if you don’t wish to complete the questionnaire, or if your income exceeds the FPL by 400% (i.e. is more than $92K per year for a family of 4.) The government estimates 60% or more of the population will qualify for a subsidy.

The plans inside Covered California will have smaller networks than the current plans. For example, Anthem Blue Cross will introduce a second PPO network that will be about 30% of its current Prudent Buyer network. (Currently 82% of California physicians are in the PB network.) All carriers except Kaiser Permanente have more than one HMO network, which allows them to price plans differently.

Some doctors or other providers will not accept Covered California plans. Employers who provide group plans will only be able to offer 1 tier to all employees. There may be 5 carriers and 25 plans within that tier. If employers use Covered California they can receive tax credits. It is anticipated that employers who employ a high number of low-wage workers will use Covered California, but it is also thought that many won’t due to the limited amount of plan choice/providers.

Insurance brokers must be certified to sell plans within Covered California. Many agents that don’t specialize in health insurance may not bother since figuring out the options for clients will be time-consuming and commissions may be reduced. Clients who are not particularly computer savvy may have an extremely confusing time dealing with the entire process.

The rating scheme has been modified to favor older individuals. Younger persons will pay more than at present and older people will pay less. (The PPACA has a 3-to-1 rule for rating.) The rates within the exchange will be artificially low in 2014 and will likely increase in 2015 since it is anticipated that many uninsured people who need treatment will enroll immediately and seek assistance. Younger, healthier people may ignore the law and pay the penalty and not enroll. People who don’t enroll during an election period won’t be able to enrol until the next one.

The rules are still being written for the PPACA and less than half the states in the USA are implementing the law. States have the option of implementing it or letting the FEDS do it. California is leading the U.S. in implementation.

If you are currently on an individual or family plan you will be transitioned to a PPACA compliant plan effective January 1, 2014. However, group plans will be transitioned at plan renewal. Small group plans refer to employers with under 50 employees. Large group plans have a different set of extremely complex rules.

To find out what your options are, contact us today.

Patrick and Joann Freeman
Certified Health Care Reform Specialists

*Information correct as of June 11th 2013. All information is subject to change.

Latest Update : August 20, 2014