• Improving Access to Care
• New, Draft Form W-2, and Another Assurance that Health Coverage is Not Taxable
• Helping 1,000 More Businesses Help Early Retirees
• Ensuring Access to Health Insurance for Children with Pre-Existing Conditions
• Putting Patients Back in Charge
• Improving Care and Preventing Abuse in Long-Term Care Facilities
• Legal Challenges to the Affordable Care Act
• Additional Information

Previous updates on health reform implementation and other information are available from the DPC. [DPC]

Improving Access to Care

Community Health Centers

The Affordable Care Act creates an expanded and sustained national investment in community health centers by providing $11 billion over five years to these critical health care providers. [P.L. 111-148; P.L. 111-152]  The country’s 1,250 community health centers provide quality health care to 20 million Americans without regard to a patient’s ability to pay or health insurance coverage. [National Association of Community Health Centers, accessed 8/23/10]  The Affordable Care Act’s investment in community health centers will allow them to nearly double the number of patients they serve.  By providing primary care and focusing on preventive services, health centers estimate they save our health care system $9.9 billion – $17.6 billion each year.

Recently, HHS announced awards of $727 million to 143 community health centers nationwide for construction and renovation projects that, when complete, will allow the health centers to provide care for an additional 745,000 patients. [HHS, 10/8/10]  Community health centers are a constant source of quality, affordable health care to millions of Americans, but especially during this economic downturn, health centers can be a critical source of care for those who have lost their health insurance, who are in between jobs, or who face other financial difficulties.

School-Based Health Centers

HHS and the Health Resources and Services Administrative (HRSA) also recently announced the availability of $100 million in funding for the construction and renovation of school-based health centers. [HRSA, 10/4/10]  The Affordable Care Act includes funding to assist school-based health centers in providing comprehensive and accessible preventive and primary health care services to medically-underserved children and families.  HRSA anticipates 200 grants will be awarded to construct, renovate, or purchase equipment in school-based health centers.  Grant applications are due December 1, 2010, and more information is available at Grants.gov. [Grants.gov, accessed 10/18/10]

New, Draft Form W-2, and Another Assurance that Health Coverage Is Not Taxable

To provide Americans with more information about the value of their health insurance, the Affordable Care Act requires employers to disclose the value of any employer-sponsored health insurance for each employee, on the employee’s annual Form W-2.  Despite an onslaught of rumors to the contrary, employer-sponsored health benefits are absolutelynottaxable, and the Affordable Care Act does not change the tax-free status of these benefits.  Reporting the cost of coverage will be optional in 2011, and, in 2012, all employers who offer health insurance will be required to report the value to each worker on their Form W-2.

Last week, the Internal Revenue Service (IRS) released a draft Form W-2 for 2011. [IRS, 10/12/10]  The new draft form looks a lot like the existing Form W-2, except that it includes a space for employers to report the cost of employer-sponsored health coverage. [IRS, undated]  And, the form itself clarifies that the cost is provided for information purposes only:

Cost of employer-sponsored health coverage (if provided by the employer).  The reporting in Box 12, using Code DD, of the cost of employer-sponsored health coverage is for information only.  The amount reported with Code DD is not taxable.

Helping 1,000 More Businesses Help Early Retirees

The Affordable Care Act creates a $5 billion Early Retiree Reinsurance Program to support employer health plans that provide coverage to retirees who are not yet eligible for Medicare, helping to protect access to coverage while reducing costs for employers and retirees. [P.L. 111-148; P.L. 111-152]  HHS recently announced that another 1,000 employers were accepted into the program, bringing the total number of participating employers to nearly 3,000. [HHS, 10/4/10]  Participating employers come from all 50 states and the District of Columbia, representing large and small businesses, state and local governments, educational institutions, non-profits, and unions.  A fact sheet explaining the program and a list of all participating employers in each state is available at HealthCare.gov and the list will be updated each week as new employers join the program.  Applications are still being accepted, and more information on the Early Retiree Reinsurance Programs is available at ERRP.gov.  This month, participating employers will begin to submit claims and receive reimbursement payments for qualifying expenses.

The Early Retiree Reinsurance Program is another bridge to the Health Insurance Exchanges and reformed health insurance markets effective in 2014, which will make it easier for earlier retirees to access affordable health insurance.  Skyrocketing health care costs have made it difficult for employers to continue to provide health benefits for employees and retirees, and this temporary program will provide financial assistance until 2014.  Earlier this year, a survey found that 76 percent of large employers that offer retiree benefits planned to pursue participation in the program, and that the average federal reimbursement for each early retiree will represent between 25 and 35 percent of each early retiree’s health care costs. [Hewitt Associates, 5/25/10]

Ensuring Access to Health Insurance for Children with Pre-Existing Conditions

On September 23, 2010, the six month anniversary of the enactment of the Affordable Care Act, the Patients’ Bill of Rights took effect.  One of the most critical protections included in the Patients’ Bill of Rights prohibits insurers from denying coverage to children who have pre-existing conditions, for all new plans and for existing plans in the group market.  Before enactment, insurers were free to deny health insurance to children who had a pre-existing condition, such as asthma, or could offer to cover the child but refuse to pay for any treatment related to the pre-existing condition.  The Affordable Care Act ended this practice, providing children and their parents the peace of mind that comes with knowing they can always access coverage.

Despite a March 29, 2010, letter in which AHIP expressed its commitment “to make pre-existing condition exclusions a thing of the past,” some health insurers are still choosing to deny coverage to children who need it by refusing to offer new “child-only” policies.  These types of policies are issued in the individual market and cover only children, not an entire family.  Last week, HHS Secretary Sebelius sent a letter to the National Association of Insurance Commissioners outlining efforts by HHS, working with states, to ensure that children with pre-existing conditions continue to have access to health insurance. [HHS, 10/13/10]  The letter clarifies a range of insurer practices related to child-only policies that are permissible under the Affordable Care Act and highlights answers to frequently asked questions, available online. [HHS, 10/13/10]  In addition, the letter outlines steps some states have taken and other states might consider, including the establishment of open enrollment periods, offering unsubsidized buy-in to a state’s Children’s Health Insurance Program (CHIP), and seeking coverage through existing state high-risk pools.  The Affordable Care Act also created the Pre-Existing Condition Insurance Plan (PCIP) which is available to eligible children and adults with pre-existing conditions who have been uninsured for at least six months.   Information is available at PCIP.gov.

Putting Patients Back in Charge

The Affordable Care Act protects consumers by ending some of the worst health insurance industry abuses.  One way the Affordable Care Act protects consumers and puts patients back in charge of their health care is by providing grants to states to establish or expand offices of health insurance consumer assistance or health insurance ombudsman programs. [P.L. 111-148; P.L. 111-152]  These independent offices will assist consumers with enrolling in coverage and with filing complaints and appeals, educate consumers on their rights and responsibilities, and collect, track, and quantify consumer problems and inquiries.

Earlier this year, HHS issued a grant notice, and on October 19, 2010, HHS announced awards of nearly $30 million for state consumer assistance programs. [HHS, 10/19/10]  Thirty-five states, four territories, and the District of Columbia applied for and received this funding.  More information about this grant program and summaries of how each grantee will use this new funding is available at HealthCare.gov. [HealthCare.gov, accessed 10/19/10; HealthCare.gov, accessed 10/19/10]

Improving Care and Preventing Abuse in Long-Term Care Facilities

In order to improve care and prevent abuse in long-term care facilities, the Affordable Care Act requires the Secretary of HHS to establish a nationwide program for national and state background checks on employees with direct access to patients at certain long-term supports and services facilities or providers. [P.L. 111-148; P.L. 111-152]  Earlier this month, HHS announced it had awarded $13 million to six states to design comprehensive applicant criminal background check programs for jobs involving direct patient care. [HHS, 10/6/10]  The Affordable Care Act provides a total of $160 million for the background check program, which should allow all states to participate.   Another round of grants is expected in the near future.

Legal Challenges to the Affordable Care Act

Since the Affordable Care Act became law, several state Attorneys General have filed lawsuits to challenge its constitutionality.  Opponents of health reform, having failed to prevent it from becoming law, are now taking their opposition to the courts.  But constitutional law scholars are confident these suits have no merit, and that, as President Reagan’s Solicitor General Charles Fried wrote, “the health care law’s enemies have no ally in the Constitution.” [DPC, 3/26/10; Boston Globe, 3/21/10]

On October 7, 2010, in the first substantive ruling on the individual responsibility policy, Judge George Caram Steeh of the U.S. District Court, Eastern District of Michigan, determined that the Affordable Care Act is constitutional.  In considering the Commerce Clause, Judge Steeh wrote:  “Far from ‘inactivity,’ by choosing to forgo insurance plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars, $43 billion in 2008, onto other market participants.” [Opinion available here]  In dismissing the lawsuit Judge Steeh concluded:  “The minimum coverage provision, which addresses economic decisions regarding health care services that everyone eventually, and inevitably, will need, is a reasonable means of effectuating Congress’s goal.”

On October 14, 2010, Judge Roger Vinson in Florida dismissed four of the six claims brought by several Republican Attorneys General and issued a procedural ruling allowing the two remaining claims to proceed. [Washington Post, 10/15/10]  The ruling does not address the merits of the constitutional claims raised by the suit, but allows the process to continue to a summary judgment hearing later this year.

Additional Information

The Democratic Policy Committee has released 13 previous updates on health reform implementation, available on the DPC website here.  In addition, DPC maintains a centralized listing of health reform implementation resources which is frequently updated and is available here.

Republican Repeal Costs $143 billion

Health Reform Reduces the Deficit

The nonpartisan Congressional Budget Office, the official scorekeeper of Congress, determined that the Affordable Care Act reduces the federal deficit by $143 billion over the first ten years of enactment. [CBO, 3/20/10]  The Affordable Care Act reduces the deficit while ensuring that 94 percent of Americans have health insurance and reducing the rate at which health care costs grow.

Republican Repeal Plan Increases the Deficit

Extrapolating from CBO’s estimate of the deficit savings resulting from the Affordable Care Act, repeal of health reform is likely to increase the deficit by $143 billion.

Republican Repeal Raises Drug Costs for Seniors

Health Reform Fills in the “Donut Hole”

More than 1.2 million Medicare beneficiaries who have entered the “donut hole” have received their $250 rebate checks, the first of the Affordable Care Act’s steps to completely fill in the “donut hole” by 2020. [HHS, 9/23/10]  Checks will continue to go out monthly for the rest of the year as beneficiaries enter the coverage gap. [White House, 6/8/10]  The $250 rebate check is tax-free and seniors do not need to do anything to receive it; Medicare automatically mails a check when the beneficiary reaches the “donut hole.” [Centers for Medicare & Medicaid Services, 5/10]  Seniors who do not receive Medicare Extra Help should expect their check in the mail within 45 days or less of hitting the coverage gap.  Information on the number of seniors in your state who may qualify for the rebate check is available from the DPC. [DPC, 6/22/10]

Beginning next year, Medicare beneficiaries who do not receive Medicare Extra Help will receive a 50 percent discount on brand-name drugs and biologics they purchase when they are in the coverage gap.  In addition to the discount, coverage in the “donut hole” will increase until 2020, when 75 percent coverage on all drugs purchased in the gap will completely fill in the “donut hole.”  More information on filling in the “donut hole” and other benefits of health reform for seniors is available from the DPC. [DPC, 6/10/10]

Republican Repeal Raises Drug Costs for Seniors

The Republican scheme to repeal health reform would deny seniors the $250 rebate check and rescind the 50 percent discount on brand-name drugs and biologics purchased in the “donut hole” next year to help them afford their medication.  The Republican plot to repeal reform would ensure the “donut hole” remains in place, rather than being closed by 2020 as under the health reform law.

Republican Repeal Revokes Tax Credits for Small Businesses

Health Reform Provides Small Business Health Insurance Tax Credits

The Affordable Care Act provides tax credits for up to 35 percent of premium costs for small businesses that offer coverage to their employees.  Effective this year, the full credit is available to firms with 10 or fewer employees and average annual wages of up to $25,000, while firms with up to 25 employees and average annual wages of up to $50,000 will also be eligible for a credit.  Beginning in 2014, tax credits are available for up to 50 percent of premium costs.  In April, the Internal Revenue Service began mailing postcards to more than four million small businesses and tax-exempt organizations that may be eligible for the credit, and provided answers to frequently asked questions about the credit. [IRS, 4/19/10; 5/5/10]  Information on the number of small businesses in your state who may qualify for the tax credit is available from the DPC. [DPC, 6/22/10]

Republican Repeal Plan Revokes Tax Credits for Small Businesses

The Republican scheme to repeal health reform would deny small businesses this tax credit, putting small business owners right back where they were before health reform was enacted, struggling to find affordable coverage options to offer their employees, or simply not offering coverage because affordable plans are unavailable.

Republican Repeal Rescinds Coverage for Young Adults

Health Reform Expands Coverage for Young Adults

The Affordable Care Act allows young adults to stay on their parents’ health insurance plan until their 26^th birthday.  Before passage of the new law, many plans dropped young adults from their parents’ policies at age 19 or upon graduation from high school or college. [National Conference of State Legislatures, 4/10]  Thirty percent of young adults age 19 through 29 are uninsured, the highest rate of any age group.  This provision is effective for all policies issued or renewed after September 23, 2010, and more than 65 insurance companies voluntarily started providing this coverage to young adults earlier this year, before the deadline. [The White House, 5/10/10]  Information on the number of young adults in your state who may benefit from this coverage extension is available from the DPC. [DPC, 6/22/10]

Republican Repeal Plan Rescinds Coverage Expansion for Young Adults

The Republican scheme to repeal health reform would revoke the new health insurance coverage options that health reform offers for young adults.  For young adults, especially new college graduates facing a challenging job market, the option to stay on a parent’s health insurance could be the only reasonably priced insurance option they have.  Without it, many will be forced to go uninsured.

Republican Repeal Revokes Coverage for Children with Pre-Existing Conditions

Health Reform Guarantees Coverage for Children with Pre-Existing Conditions

The Affordable Care Act prohibits health insurers from denying or excluding coverage of pre-existing conditions for children, effective for policies and plan years beginning on or after September 23, 2010, and applying to all group plans and all new plans in the individual market.  The Administration has worked with the health insurance industry, which has agreed to ensure that children with pre-existing conditions are not denied coverage. [HHS, 5/10/10]  This means that children, no matter their health status, and their parents will soon have the peace of mind that comes with knowing coverage of a child’s pre-existing condition cannot be denied.

Republican Repeal Plan Revokes Protections for Children

The Republican scheme to repeal health reform would revoke the protection children now have from having their health insurance coverage denied or limited due to a pre-existing condition.  The Republican effort to repeal reform gives insurance companies the freedom to deny coverage of a child’s pre-existing condition, including congenital conditions a child may have at birth.  No child should be denied health care for a condition they were born with, and every parent deserves the peace of mind that comes with knowing their child’s health care is covered.

Republican Repeal Revokes the Patients’ Bill of Rights

Health Reform Guarantees Patients’ Rights

The Affordable Care Act includes numerous consumer protections and a Patients’ Bill of Rights – provisions that Senate Democrats have been fighting to enact for nearly a decade.  These patient protections take effect for policy or plan years beginning on or after September 23, 2010, and apply to various types of health insurance plans, as noted.

·         No lifetime limits on coverage. Insurers will be prohibited from imposing lifetime limits on benefits.  This provision applies to all new and existing plans in all markets.

·         No coverage rescissions when Americans get sick. Insurers will be prohibited from rescinding health coverage when a beneficiary gets sick as a way of avoiding paying that person’s health care bills.  This provision applies to all new and existing plans in all markets.

·         Required coverage of preventive care with no cost-sharing. Insurers will be required to provide coverage of preventive health care services without cost-sharing.  This provision applies to all new plans in all markets.

·         Regulated annual limits on coverage. Insurance plans’ use of annual limits will be tightly regulated to ensure access to needed care.  This provision applies to all new plans and existing employer plans, until 2014, when the Exchanges are operational and use of any type of annual limit will be banned for all new plans and existing employer plans.

·         Fair opportunity to appeal coverage and claims decisions. Health insurers will be required to develop an appeals process that, at a minimum, provides beneficiaries with a notice of internal and external appeals processes and allows beneficiaries to review their file and present evidence in their appeal.  This provision applies to all new plans in all markets.

·         Right to choose your doctor. Patients’ rights are protected by allowing health insurance plan members to choose any participating primary care provider, or in the case of children, any participating pediatrician, prohibiting insurers from requiring prior authorization before a woman sees an ob-gyn, and ensuring access to emergency care.  This provision applies to all new plans in all markets.

Republican Repeal Plan Revokes Patients’ Rights

The Republican scheme to repeal health reform would deny all Americans the consumer protections and patients’ rights that will soon take effect as a result of the new health reform law.  The Affordable Care Act puts control over health care decisions in the hands of the American people, not insurance companies.  It seems Republicans advocating for repeal of the new law are on the side of insurance companies, not patients.

Republican Repeal Raises Costs for Early Retirees

Health Reform Lowers Costs for Early Retirees

The Affordable Care Act created a $5 billion re-insurance program for employer health plans that offer coverage to retirees who are not yet eligible for Medicare, to help protect access to coverage while reducing costs for employers and retirees.  This temporary program will provide financial assistance until 2014, when health insurance Exchanges will make it easier for early retirees to access affordable health insurance options.  Early retirees are at particular risk of becoming uninsured, or of being forced to pay exorbitant premium costs until they become eligible for Medicare, and the percentage of large firms offering retiree coverage has dropped precipitously, from 66 percent in 1988 to just 31 percent in 2008. [The White House, 5/4/10]  The program began on June 1, 2010, in advance of the June 22, 2010, effective date required by law. [Federal Register, 5/5/10; The White House, 5/4/10]  Information on the number of early retirees in your state who may benefit from this program is available from the DPC. [DPC, 6/22/10]

Republican Repeal Plan Leaves Early Retirees Without Critical Protections

The Republican scheme to repeal health reform fails to protect early retirees, who will continue to be at a very high risk of becoming uninsured or of paying excessive premiums if they are lucky enough to maintain their health insurance coverage.  Employers are struggling to continue providing health benefits to retirees, and Republicans are working to repeal the assistance that the health reform law provides them to do the right thing.