Health Care Reform Summary and How It Will Impact Hospitals
Overview:
- The bill that passed was more than 2,000 pages long and touches numerous areas of our organization. It will take us some time to filter through the bill and assess the realistic impact.
How will it impact hospitals?
- For hospitals, reform holds the promise of better access to quality care for all.
- The bill will extend coverage to 32 million people who have no medical care coverage, possibly reducing those who present to the hospital without any way to pay for it.
- In FY2009: Trinity gave away 12.166 million in financial assistance (those who qualify for a discount) + $6.371 million in charges written off because people didn't pay their bills. This doesn't include costs of uncompensated Medicare and Medicaid charges.
- This could theoretically also mean that people won't wait to seek care for a health problem until it becomes a critical health emergency, making the condition cheaper to treat or avoiding a hospital visit altogether.
- Hospitals face reductions in payments from the federal Medicare health insurance program for the elderly under the proposed legislation.
- However, the bill also includes a last-minute provision worked on by Rep. Bruce Braley that will actually bring more Medicare reimbursement to Iowa and other high-quality, low-cost states by evening out Medicare reimbursement rates.
- Many initiatives are included in the language, for example, rewarding accountable care organizations and reimbursing sites that train medical school graduates (Trinity has a family practice residency program)
- Under the legislation, Medicaid will be expanded. While this sounds good in theory, some states still have difficulty keeping up with their Medicaid reimbursements to hospitals under the current program.
How will it impact insurers?
- Insurers won't be able to place lifetime limits on coverage.
- Insurers can't exclude those with pre-existing conditions.
- Children will be able to stay on their parents' insurance policies until their 26th birthday.The changes could be bumpy, because insurers warn they won't be able to make them so quickly.
When will it take effect?
- The bulk of the legislation wouldn't take effect until 2014.
- Under the legislation, consumers will see some changes within months.
Who is required to carry/provide health insurance coverage?
- Once the tax credits and Medicaid expansion are in place, most Americans will be required to carry health insurance or pay a fee, topping out at either $695 a year or 2.5% of income.
- Employers would have to provide affordable insurance or pay a penalty of up to $3,000 per worker. Those figures assume the Senate ultimately adopts the package of changes the House approved.
Business tax increases:
- Tax increases needed to finance the program would hit a range of industries, from insurers to tanning services.
- Over the next decade, $108 billion in new fees will fall on insurers, drug makers and medical-device companies.
- This will make us one of the highest-taxed regions in the world, and that's going to have an impact on the appetite for people to invest in medical innovation. (Medtronic CEO, predicting his company could lose 1,000 jobs due to 2.9% tax on medical device companies.)
Personal tax increases:
- Families earning more than $250,000 a year will pay a higher Medicare payroll tax, and see that tax expanded to investment income such as dividends.
- High-value insurance plans would be hit with a 40% tax starting in 2018.
