Health Care Reform 2013

A summary of health reform initiatives which become effective in 2013.

Health Care Reform 2013:  Insurance Reforms

• Create the Consumer Operated and Oriented Plan (CO-OP) program to foster the creation of nonprofit, member run health insurance companies in all 50 states and the District of Columbia to offer qualified health plans. (Appropriate $6 billion to finance the program and award loans and grants to establish  CO-OPs by July 1, 2013)
• Simplify health insurance administration by adopting a single set of operating rules for eligibility verification and claims status (rules adopted July 1, 2011; effective January 1, 2013), electronic funds transfers and health care payment and remittance (rules adopted July 1, 2012; effective January 1, 2014), and health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, and referral certification and authorization (rules adopted July 1, 2014; effective January 1, 2016). Health plans must document compliance with these standards or face a penalty of no more than $1 per covered life. (Effective April 1, 2014).

Health Care Reform 2013:  Prevention/Wellness

• Provide states that offer Medicaid coverage of and remove cost sharing for preventive services recommended (rated A or B) by the U.S. Preventive Services Task Force and recommended immunizations with a one percentage point increase in the federal medical assistance percentage (FMAP) for these services.

Health Care Reform 2013:  Medicare

• Begin phasing in federal subsidies for brand name prescriptions filled in the Medicare Part D coverage gap (to 25 percent in 2020, in addition to the 50 percent manufacturer brand name discount).
• Establish a national Medicare pilot program to develop and evaluate paying a bundled payment for acute, inpatient hospital services, physician services, outpatient hospital services, and post-acute care services for an episode of care.

Health Care Reform 2013:   Medicaid

• Increase Medicaid payments for primary care services provided by primary care doctors for 2013 and 2014 with 100 percent federal funding.

Health Care Reform 2013:   Tax Changes

• Increase the threshold for the itemized deduction for unreimbursed medical expenses from 7.5 percent of adjusted gross income to 10 percent of adjusted gross income for regular tax purposes; waive the increase for individuals age 65 and older for tax years 2013 through 2016.
• Increase the Medicare Part A (hospital insurance) tax rate on wages by 0.9 percent (from 1.45 percent to 2.35 percent) on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly and impose a 3.8 percent assessment on unearned income for higher income taxpayers.
• Limit the amount of contributions to a flexible spending account for medical expenses to $2,500 per year increased annually by the cost of living adjustment.
• Impose an excise tax of 2.3 percent on the sale of any taxable medical device.
• Eliminate the tax deduction for employers who receive Medicare Part D retiree drug subsidy payments.

For More Information

“Focus on Health Reform: Health Reform Implementation Timeline,” The Henry J. Kaiser Family Foundation.

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