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Title I - Quality, Affordable Health Care For All Americans
Title I is estimated to insure 16 million additional Americans, with a projected cost of $509B and projected
revenue and savings of $80.6B between 2010 and 2019 (as estimated by the CBO).
Subtitle A: Immediate Improvements in Health Care Coverage for All Americans
Establishes improvements and new benefits for most Americans with private insurance, taking effect in
2010-2011.
- Prohibits lifetime and annual benefit caps in all new and existing plans.
- Prohibits rescission unless true fraud or deliberate misrepresentation has been identified.
- Parents can keep their children on their health insurance plans until the child reaches age 26.
Subtitle B: Immediate Actions to Preserve and Expand Coverage
Focuses on the currently uninsured. Creates new programs and improve coverage, taking effect in 2010-
2011.
- Establishes the Pre-Existing Condition Insurance Plan ($5B cost through 2014).
- Establishes the Early Retiree Reinsurance Program ($5B cost through 2014).
- Internet portal developed by DHHS for individuals and businesses to find coverage
(http://www.healthcare.gov).
- New standards for the electronic exchange of information, effective Jan 2, 2013 ($11.6B in revenue).
Subtitle C: Quality Health Insurance Coverage for All Americans
Defines the major health insurance market reform beginning in 2014... guaranteed issue.
- No discrimination or pre-existing condition exclusions based on health status (permitted within specified
limits for tobacco use, age, and wellness program participation). In other words, no more underwriting.
- Guaranteed availability and renewal of coverage.
- Required inclusion of specified "essential health benefits" in policies
- Grandfathering: the right to maintain most coverage that was in effect before the ACA's enactment
Subtitle D: Available Coverage Choices for All Americans
Establishes a new marketplace in each state called the American Health Benefit Exchange beginning in
2014.
- A "qualified health plan" must contain a list of "essential health benefits" unless it is a grandfathered plan.
- Establishment of these exchanges by Jan 1, 2014 by each state or by the HHS secretary if a state fails to
act.
- Definitions of "qualified individuals" and "qualified employers" eligible to obtain coverage through an
exchange.
- Members of Congress and their staff are required to purchase a health plan offered through an exchange.
- Establishment of reinsurance and risk adjustment so that insurers, in the early years of each exchange, do
not suffer financial harm if their plans attract a higher number of expensive, high-risk individuals ($106B
cost).
Subtitle E: Affordable Coverage for All Americans
Helps low-income Americans buy private coverage and supports small businesses in the form of tax credits.
- For eligible individuals and families with incomes under 400% of the federal poverty level (88K for a
family of 4 in 2010), there are premium tax credits and maximum premium contributions. Also, there is a
requirement that participants contribute between 2-9.5% of income. These provisions cost $350B.
- Reduced cost-sharing for individuals enrolled in qualified health plans, based on income. Maximum outof-
pocket limits ($5,950 for individuals and $11,900 for families) reduced to 1/3 for those between 100-
200% of the FPL, to 1/2 for those between 200-300% of the FPL, and to 2/3 for those between 300-400%
of the FPL.
- New tax credit for small businesses that provide health insurance to their workers, currently limited to
35% of the employer's contribution, rising to 50% beginning in 2014 ($37B cost).
Subtitle F: Shared Responsibility for Health Care

 

 

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Defines the responsibilities of individuals and employers in the new market beginning in 2014.
- Individual mandate: individuals must purchase minimum essential health insurance or face a tax penalty
of $95 or 1% of income in 2014, $325 or 2% of income in 2015, and $695 or 2.5% of income in 2016
($17B revenue).
- Free rider provision: employers with >200 employees must enroll new full-time workers in coverage and
notify all workers about exchanges; employers with >50 workers will be assessed a penalty for each worker
obtaining a premium-subsidized plan through an exchange.
- Free choice voucher: any worker whose premium for employer coverage would cost between 8-9.8% of
income may buy insurance through an exchange and use the employer contribution to lower the cost.
Subtitle G: Miscellaneous Provisions
Protects individuals against discrimination based age, sex, race, nationality, disability, etc.

 

 

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Title II: The Role of Public Programs
12 subtitles and 42 sections which allow for Medicaid eligibility expansion and uniformity
Background:
• Medicaid expansion first proposed by Baucus in 2008
• Medicaid and CHIP currently cover 15% of the U.S. population. The 25% of enrollees who are
elderly or disabled account for 68% of total Medicaid spending. The 18% who are dual-eligible for
Medicare account for 46% of Medicaid spending.
Subtitle A: Improved Access to Medicaid
• Requires all states by 2014 to make Medicaid eligible to households with incomes up to 133% of
the federal poverty level
• Federal gov’t will pay states for newly eligible individuals at: 100% 2014-2016 decreasing to 90%
after 2019
• States which already cover additional populations phase into higher rates paid to other states and
reach 90% federal payment for these populations after 2019
• 15.9 Million Americans predicted to enroll in Medicaid through this expansion. Cost expected to
be $434B for federal gov’t, 21.1B for states
Subtitle D, E: Improvements to Services and New Options for Long-Term Services
• Requires coverage of services by freestanding birth centers and allows children who are enrolled
in either Medicaid or CHIP to receive hospice services without forgoing curative treatment
• Community First Choice Option: optional Medicaid benefit (began 10/2011) to provide
community-based attendant services for Medicaid patients with disabilities who otherwise would
require care in hospital, nursing home or other care facility ($6B)
Subtitle F, G: Medicaid Prescription Drug Coverage, Disproportional Share (DiSH) Payments
• Increased required rebates for outpatient prescription drugs (-$38B)
• Removal of smoking cessation drugs, barbiturates and benzodiazepines from Medicaid’s
excludable drug list
• Reduces federal DiSH payments beginning in 2014 as Medicaid and exchange expansions take
effect. (-$14B)
Subtitle H: Improved Coordination for Dual Eligible Beneficiaries
• Improved care and services to individuals dually enrolled in Medicare and Medicaid
• Directs HHS to establish federal Coordinated Health Care Office (CHCO) within CMS to 1) more
effectively integrate benefits and 2) improve coordination between federal and state governments
to ensure enrollees have full access to entitled services.
Subtitle I: Improving the Quality of Medicaid for Patients and Providers
• New health quality measures and requirements including prohibiting payments related to healthcare
acquired conditions
• Allows states to enroll Medicaid beneficiaries with chronic conditions into a “health home”
• Pilot study of bundled payments for hospitals and physicians to test new payment structures for
safety-net hospitals
Subtitle B: Enhanced Support for the Children’s Health Insurance Program (CHIP)
• Extends life of CHIP through 2019
• From 2014-2019, states get 23% increase in match rate up to 100% cap
Subtitle C, J: Medicaid and CHIP Enrollment Simplification and Improvements (MACPAC)
• Streamlines and simplifies enrollment by allowing individuals to apply for and enroll in
Medicaid, CHIP or private exchange through state-run websites
• Topics to be reviewed by Medicaid and CHIP Payment and Access Commission (MACPAC)
include: regulations, reports of state-specific data, assessment of adult services in Medicaid

 

 

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• Strengthens the capacity of MACPAC to advise congress on improvements to these programs
Subtitle K: Protections for American Indians and Alaska Natives
• New protections including decreased cost-sharing for these groups.
Subtitle L: Maternal and Child Health Services
• Funding to develop and implement evidence-based maternal, infant and early childhood visitation
models to reduce infant and maternal mortality by improving prenatal, maternal and newborn
health, parenting skills, school readiness, juvenile delinquency and family economic selfsufficiency
• Funding for programs to educate adolescents on abstinence and contraception

 

 

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Title III – Medical Care, Medicare, and the Cost Curve
-Designed to improve the quality and efficiency of health care, specifically Medicare.
-$449 billion in health care system savings are embedded in Title III.
-Within Title III’s 7 subtitles and 98 sections are changes to every part of Medicare, which improve the
benefits and operation of the program for beneficiaries, improve the efficiency and quality of care provided
to them, and generate savings that are a large part of the ACA’s overall financing scheme.
Subtitle A: Transforming the Health Care Delivery System
Implements new strategies to improve the quality and efficiency of medical care and instigates changes in
how Medicare pays providers to promote quality and better outcomes rather than promoting more services
to Medicare patients.
• Quality reporting: beginning in 2014, physicians who do not submit data to the Physician Quality
Reporting Initiative to assess the quality of their care will have their Medicare payments reduced.
• CMS Innovation: a new Center for Medicare and Medicaid Innovation is established within the federal
Centers for Medicare and Medicaid Services (CMS) to research, develop, test, and expand innovative
payment and delivery arrangements to improve quality and reduce the cost of care provided to patients.
• Shared Savings: a program to share savings with Medicare providers to reward Accountable Care
Organizations that take responsibility for the cost and quality of care received by their patients.
• Bundling: a national pilot program on payment bundling to encourage hospitals, doctors, and post
acute-care providers to combine their current separate payments into “bundles” to improve care and
savings.
• Hospital readmissions: hospitals with high levels of preventable patient readmissions face penalties.
Subtitle B: Improving Medicare for Patients and Providers
Implements other specific program changes to Medicare, including savings provisions such as those
affecting the home health industry.
• Home Health Care: payments for home health care services will be restructured to achieve $40 billion
in payment reductions through 2019.
• Disproportionate Share Hospital (DiSH) Payments: To be account for hospitals’ uncompensated care
costs, Medicare DSH payments will be reduced to reflect lower hospital uncompensated care costs due
to increases in the numbers of insured.
Subtitle C: Provisions Related to Part C
Alters the financing of Medicare Advantage, the private insurance option used by ~25% of Medicare
enrollees.
• Medicare Advantage: MA payments were frozen for 2011. For 2012, it established a new set of
benchmark payments for MA plans at different percentages of Medicare fee-for-service rates, by area,
with bonuses for quality and enrollee satisfaction, and lower plan payments for “low-quality” plans.
o New benchmarks vary from 95-115% of Medicare fee-for-service spending. (-$135.6B)
• From January 1 to March 15 of each year, MA beneficiaries may disenroll from an MA plan and return
to the fee-for-service program from Jan 1 to March 15 of each year.
Subtitle D: Medicare Part D Improvements for Prescription Drug Plans and MA Drug Plans
Eliminates the “Medicare Part D doughnut hole” and makes other changes to Medicare prescription
plans.
• Part D: Drug manufacturers will provide a 50% discount to Part D enrollees for brand-name drugs and
biologics purchased during the coverage gap in order to fill the doughnut hole (+42.6B).
• Other: Part D premium subsidy is reduced for beneficiaries with income above Part B income
thresholds (-$10.7B); Cost sharing is eliminated for beneficiaries receiving care under a home- and
community- based waiver program who would otherwise require institutional care (+$1.1B); Part D
plans must develop drug-dispensing techniques to reduce prescription drug waste in long-term care
facilities (-$5.7B).

 

 

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Subtitle E: Ensuring Medicare Sustainability
Changes Medicare market basket (payment) updates for hospitals, home health agencies, and other
providers; increases Part B premiums for higher-income beneficiaries; and establishes the Independent
Payment Advisory Board (IPAB).
• Market Basket Updates: A productivity adjustment is added to the market basket payment update for
inpatient hospitals, home health providers, nursing homes, hospice providers, inpatient psychiatric
facilities, long-term care hospitals, and inpatient rehab facilities (-$156.6B).
• Higher-income beneficiaries: for higher-income beneficiaries who pay a higher Part B premium rate,
income thresholds are frozen at 2010 levels through 2019 (-$25B).
• Independent Payment Advisory Board: a new 15 member IPAB will present Congress with proposals
to reduce excess cost growth and improve quality of care for Medicare beneficiaries.
Subtitle F: Health Care Quality Improvements
Implements provisions to improve the quality of medical care and treatment for the entire U.S. health care
system.
Subtitle G: Protecting and Improving Guaranteed Medicare Benefits
Provides a statement of intent by Congress on the impact of Title III provisions on Medicare benefits.

 

 

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Title IV: Prevention of Chronic Disease and Improving Public Health
3 types of Preventive measures (Primary—eliminating risk factors e.g. smoking/obesity, secondary—
colonoscopy, diabetes screening, tertiary—reduce morbidity for those with illness already, e.g. preventing
unnecessary hospitalizations with those who have cancer already). Monetary savings really on seen in
Primary or Tertiary.
• Subtitle A: Modernizing Disease Prevention and Public Health Systems
o Prevention and Public Health Investment Fund (Costs 12.5 B). Originally 80 B, but only
15 B in hard $, rest of 65$ available in appropriations.
o Federal council to promote prevention and health strategies. Will expand USPSTF and
US Task Force on Community Preventive Services
o Public-Private partnerships to increase public awareness, set up by states but coordinated
by HHS secretary. Especially to educate Medicaid enrollees re preventive services
• Subtitle B: Increasing Access to Clinical Preventive Services
o Medicare Preventive Services: NO EXTRA COSTS (e.g. copayments, deductibles) for
annual wellness visit and personalized health risk assessment (+3.6 B). COINSURANCE
cost is WAIVED for Grade A or B services according to USPSTF (+800M). Outreach to
community re what services are covered (-700M).
 Coverage for Services recommended by the USPSTF
 Grade A (high certainty) and B (moderate certainty) that net benefit is
substantial. Examples include Alcohol screening, Paps (how often though?),
CRC screening STD screening, T2DM screening.
o Medicaid Preventive Services: State programs are allowed to provide diagnostic,
screening, preventive services for any Grade A or B or adult immunizations (+100M).
States that do this will receive 1% payment increase in Federal Medicaid Assistance for
these services. MUST cover counseling and pharmacotherapy at no cost for tobacco
cessation for pregnant women (-100M). Grants for healthy lifestyle programs for
Medicaid beneficiaries (+100M).
o Grants for school based health clinics (+200M).
• Subtitle C: Creating Healthier Communities
o Calorie Labeling on Chain Restaurant Menus (Similar to NYC), any chain >20 locations
must show calories of each item on menu/menu board.
o Healthy Aging, Living well program to improve health of Pre-Medicare individuals
(+100M)
o Employers with >50 employees must provide breaks and breastfeeding locations.
• Subtitle D: Support for Prevention and Public Health Innovation
o HHS, through the CDC, funds research for public health/services
o All new federal health programs must collect data by race, ethnicity, primary language,
and all other indicators of disparity (income?) (+200M)
o Childhood obesity demonstration program through 2014 (+25M).
• Incentives for Healthy Behaviors and Wellness
o Employers can vary premiums up to 30%, up from 20% under HIPAA provisions, to
incentivize healthy behaviors (tobacco use, weight, blood pressure, cholesterol levels)
o 50% MORE premiums for tobacco users.
• Menu Labeling
o Preempts state laws/city ordinances (e.g. NYC). Provides national standard (very similar
to NYC).
Much of the funding for this portion must come from appropriations, and is therefore not scored by the
CBO (above estimates are likewise skewed down). Possibility that congress will not appropriate the
necessary funds…
Except for 15 B hard money, up to 80 B in appropriations.
Possibility that this portion may not get funded by an unwilling congress.

 

 

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Title V: Health Care Workforce
• Subtitle A: Purpose and Definitions
• Subtitle B: Innovations in the Health Care Workforce
o National Health Care Workforce Commission*—Permanent commission to review
projected health care workforce needs and provide comprehensive, unbiased info to
congress about how to deal with that.
o State Healtcare Workforce Grants
 Helps increase number of skilled health care workers.
• Subtitle C: Increasing supply of Health Care Workforce
o 46,000 shortage in 2025.
o 21,000 shortage in 2015.
o AAMC says 91,000 shortage in 2020!
o Primary care, Allergy/Immunology, Cardiology, child psychiatry, dermatology,
endocrinology, neurosurgery, psychiatry.
o REDISTRIBUTION of unused primary care/gen surg GME positions (900) rather than
create more.
o Student Loans: Eases access for schools to apply for federally funded loan programs.
 Nursing Student Loans—Increase in amount
 Health care workforce loan repayment programs. Establishes a loan repayment
program for pediatric subspecialists and providers of mental and behavioral
health services to children and adolescents who are or will be working in a
Health Professional Shortage Area, Medically Underserved Area, or with a
Medically Underserved Population.
• Subtitle D: Enhancing Health Care Workforce Education and Training
o Training in family medicine, general internal medicine, general pediatrics, and physician
assistantship.
o Geriatric education and training; career awards; comprehensive geriatric education.
o Rural physician training grants.
o Nursing/PA training grants
• Subtitle E: Supporting Existing Health Care Workforce
o Health professions training for diversity. Provides scholarships for disadvantaged
students who commit to work in medically underserved areas as primary care providers,
and expands loan repayments for individuals who will serve as faculty in eligible
institutions. Funding is increased from $37 to $51 million for 2009 through 2013.
• Subtitle F: Strengthening Primary Care and Other Workforce*
o Medicare Payment for Primary Care. All primary care and general surgeons in “health
professional shortage” areas receive 10% bonus for 5 years (from 2011-2016). (+3.5B)
o Community Health Center Medicare Payments:* Prospective Payments system for
Federally Qualified Health Centers FQHCs (+400M)
 Ammendment (Community Health Centers and National Health Service Corps
Fund). Fund to create and expand health centers and National Health Service
Corps. (+11B). Funding goes up by ~350% for health centers (1-3.5B) and goes
from 290 M to 310 M for service corps from 2011-2015.
o Primary Care
 Redistribution of Residency positions that have been unfilled for Primary care
physician training (1.1 B). Grant for low income individuals to obtain education
and training for health care occupations projected to be in shortage or high
demand.
 Increases in nurse education (200M)
 Support of primary care residency programs at teaching health centers (400M)
 Redistribution of Primary
• Subtitle G: Improving Access to Health Care Services
o Via (FQHCs), National Health Service Corps etc.
• Subtitle H: General Provisions

 

 

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Title VI: Transparency and Program Integrity
-­‐ National Health Care Anti-Fraud Association estimates 3% of healthcare spending lost to fraud 
probably more
-­‐ Healthcare Fraud and Abuse Control implemented in 1996 for Medicare, expanded to Medicaid in
2005 with up to 2.04B in savings/year
-­‐ Healthcare Fraud Prevention and Enforcement Action ’09 to make fraud prevention a ‘cabinet
level priority’
Subtitle A: Physician Ownership and Other Transparency
-­‐ Limits participation in Medicare of physician owned hospitals. (-500M)
-­‐ Physician Payment Sunshine Act: Industry must report gifts and payments to physicians and
hospitals. Will be publicly available online.
o Preempts transparency laws already in place in several states
Subtitle B: Nursing Home Transparency and Improvement
-­‐ Nursing homes required to implement compliance and ethics programs for employees
-­‐ Will publish staffing and quality information
-­‐ National independent monitoring program to oversee facilities
-­‐ Upfront penalties to better enforce existing laws.
-­‐ Funding for demonstrations for smaller more personal nursing homes.
Subtitle C: Nationwide Program for National and State Background Checks on Direct Patient Access
Employees of Long Term Care Facilities
-­‐ Will fund implementation of consolidated background check programs in all States (+100M)
o Under MMA, federal government gave seven states grants for a pilot program to
streamline their background check systems. This funding now available to everyone.
Subtitle D: Patient Centered Outcomes Research
-­‐ Patient-Centered Outcomes Research Institute (public-private) to generate comparative clinical
outcomes research.
o Findings cannot be used to mandate care
o CMS can make decisions on coverage based on findings
Subtitle E: Medicare, Medicaid, and CHIP Program Integrity Provisions (- 2.9B)
-­‐ HHS to screen providers and suppliers of Medicare, Medicaid, and CHIP
-­‐ HHS to create a national healthcare fraud and abuse data collection system and give this
information to the National Practitioner Data Bank.
-­‐ National Provider Identifier numbers included when a patient is enrolled to monitor information.
-­‐ If fail to grant access to records for investigations, fine of $15,000 per day
-­‐ If fail to provide records on orders, payments, referrals, can be disenrolled from Medicare for a
year.
-­‐ $350 million over 10 years to Health Care Fraud and Abuse.
Subtitle F: Additional Medicaid Program Integrity Provisions
-­‐ States to terminate from Medicaid individuals already terminated from Medicare.
-­‐ States cannot use Medicaid dollars to pay for services that are not registered with HHS or that are
outside of the U.S.
-­‐ Requires that States make Medicaid Information System similar to Medicare’s coding system and
implement new fraud surveillance programs.
Subtitle G: Additional Program Integrity Provisions
-­‐ Penalties on multiple employer welfare arrangements who provide false information about
finances and benefits.
-­‐ Department of Labor can order cease and desist, especially if the welfare arrangement is
financially hazardous.
Subtitle H: Elder Justice Act
-­‐ Funding of $777 million dollars over 4 years with over half going to Adult Protective Service.
-­‐ Funding for ombudsman training and complaint investigation
-­‐ National Training Institute for Surveyors to create a nationwide standard.
Subtitle I: Medical Malpractice
-­‐ View of the Senate on medical malpractice and medical-liability insurance reform. Establishes
demonstrations to evaluate alternatives to tort litigation.

 

 

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Title VIII – CLASS Act
2 sections, no subtitles [-70.2 B]
Prior to CLASS, many disabled people could only receive nonmedical benefits if they were poor and
qualified for Medicaid. This title was meant to help these disabled individuals who may not yet require
skilled nursing home care. Community Living Assistance Services and Supports will be run by DHHS,
made available to all Americans, and enrollees will pay premiums for benefits
Section 1: Purpose
Establishes a national voluntary insurance program to purchase community living assistance
services and supports to:
a) Provide tools to individuals to maintain their independence and live in the community
b) Establish infrastructure to accomplish this
c) Alleviate burdens of family caregivers
d) Address institutional bias by providing a finance mechanism that supports personal choice
and independence
Section 2: Definitions
Eligibility restricted to people with >2 or 3 restrictions in ADLs (eating, toileting, transferring,
bathing, dressing, continence) Amount left vague so HHS could have flexibility for fiscal
solvency. Recipients must pay CLASS premiums for >5 years, 3 of which must have been spent
earning at least $1200
Section 3: CLASS Independence Benefit Plan
For individuals with income <100% FPL and full time students <22 yo, premiums cannot exceed
$5/month and will not change as long as individual remains enrolled. Enrollees will receive
benefits when they have >2/3 ADL restrictions for a period of >90 days. The minimum cash
benefit will be at least $50/day. Premiums only vary by age, not health status
Section 4: Enrollment and Disenrollment Requirements
Employers can enroll employees in CLASS automatically (deducting the premium from their
paycheck), but employees can waive out of it.
Section 5: Benefits
HHS will establish and eligibility assessment system to regulate benefits. Benefits will include
cash benefit, advocacy services, and assistance counseling. Provides for “Life Independence
Account” to pay for nonmedical needs to maintain independence in community.
Section 6: Class Independence Fund
To be maintained by the Treasury Secretary. Board of Trustees to include secretaries of treasury,
labor, and health and human services, and 2 public members (nominated by president, confirmed
by senate)
Section 7: CLASS Independence Advisory Council
Establishes 15 member council to advise HHS. Majority of members must participate or be likely
to participate in CLASS
Section 8: Solvency and Fiscal Independence Regulations; Annual Report
Benefits are to come entirely from premiums and associated interest, not taxpayers
Section 9: Inspector General Report
Yearly report to provide oversight
Section 10: Tax Treatment of Program
For tax purposes, IRS will regard CLASS as a qualified long-term care insurance contract

 

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Title IX: Paying for the ACA
2 subtitles, 20 sections
Subtitle A: Revenue Offset Provisions
• “Cadillac” Tax: 40% tax on health insurance plans >$10,200 or $27,500 for individuals or
families, respectively (tax is applied to the amount above the threshold).
• Value of health benefits must be disclosed on W-2 forms
• Definitions of qualified medical expenses must conform to the definitions used for medical
expense itemized deduction
• Health Savings Accounts withdrawals prior to age 65 not used for qualified medical expenses will
be taxed 20% (increased from 10%)
• Amount deposited in health Flexible Spending Arrangements cannot exceed $2500/year
• 1099 provision – requires more reporting to IRS
• New annual fee on the pharmaceutical sector
• New excise tax on sale of medical devices (2.3% of the sales rate)
• Annual fee on the health insurance sector
• Elimination of the deduction currently paid by the government for the subsidy of employers who
maintain Medicare D for retirees
• AGI threshold for claiming itemized deduction of medical expenses is increased from 7.5% to
10%
• Deductibility of executive compensation for insurance providers is limited if >25% of the gross
premium income comes from plans that meet minimal essential coverage requirements.
• Hospital insurance tax rate increases by 0.9 percentage points for individual earning more than
$200,000. Revenue will go to Health Insurance Trust Fund. Will also include 3.8% tax on income
from interest, dividends, annuities, royalties, and rents.
• Nonprofit Blue Cross Blue Shield organizations must have a medical loss ratio of >85% to take
advantage of tax benefits currently provided to them
• 10% tax imposed on indoor tanning services
Subtitle B: Other Provisions
• Establishment of cafeteria style plans so small businesses can provide tax free benefits to their
employees
• 2 year temporary tax credit ($1B cap) to invest in therapies for chronic disease
• Adoption tax credit and adoption-assistance exclusion increased by $1,000 and is made refundable
• $1.01 per gallon cellulosic biofuel producer credit is modified to exclude fuels with significant
water, sediment, or ash content.
• Clarification of “economic substance doctrine.” Used by courts to deny tax benefits for
transactions lacking economic substance. Now imposes a 40% strict liability penalty on
underpayments attributable to a transaction lacking economic substance

 

 

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Title X -- The Manager’s Amendment
Changes to Titles I-VI and VIII-IX
Subtitle A -- Insurance Coverage
○ Restructure ban on lifetime/annual insurance limits
○ New rules on coverage of abortion services
○ Insurers must provide coverage for participants in approved clinical trials
○ Office of Personnel Management will offer at least two nonprofit multistate plans
○ Workers who pay premiums of 8-9.8% of their income may obtain a voucher worth their
employer’s contribution and purchase a plan on a state exchange (+4B)
Subtitle B -- Medicaid and CHIP
○ 100% coverage of incremental Medicaid costs for Nebraska, assistance for Louisiana
○ Extension of CHIP funding through 2015
○ Incentives to shift Medicaid patients out of nursing homes into home- and comm-based
services
○ Pregnancy Assistance Fund
○ Indian Health Care Improvement Act -- enacted by reference
Subtitle C -- Medicare / Delivery System
○ Revisions of shared savings, payment bundling, and hospital readmission programs,
home health payment, market basket reductions.
○ Medicare coverage and screening for those exposed to enviro hazards (+0.3B)
○ Medicare hospital wage-index and practice expense floors for states where 50% of
counties are frontier (+2B)
○ HHS secretary may test value-based purchasing for various facilities and services (payfor-
performance)
○ Medicare Part D must include med reviews and summary
○ HHS Physician Compare website for medicare beneficiaries
○ Office of Minority Health
Subtitle D -- Prevention and Public Health
HSS National report card on diabetes
Substance Abuse and Mental Health Services Admin grants
National Congenital Heart Disease Surveillance System
NIH Cures Acceleration Network
CDC Breast cancer education
Subtitle E -- Health Workforce Needs
National Health Service Corps -- increased loan repayment, half-time
service, teaching up to 20%
Increased funding for community health centers (+11B)
CDC National diabetes prevention program
Subtitle F -- Fraud and Abuse
Grants for testing alternatives to tort litigation. Must emphasize pt. safety,
disclosure of medical errors, early resolution of disputes.
Liability protections in Federal Tort Claims Act extended to free clinics (+0.1B)
(NYUFC?)
Subtitle H -- Revenue
Modifications to excise tax on “Cadillac” policies, limits on flexible spending, fees
for devices and insurance, elimination of taxes on cosmetic procedures, new tax on indoor tanning

 

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The Reconciliation Sidecar -- Health Care and Education Reconciliation Act
Changes Titles I-X
Subtitle A -- Coverage (+161.4B) (Title I)
○ Tax credits -- Tweaks the premium tax credit table (e.g. tops out at 9.5% instead of
9.8%). Starting in 2020, cap is lifted and gov. subsidies get tacked to CPI, meaning
premiums may outpace CPI.
○ Lowers flat fee for not buying insurance and raises percentage fee
○ Adjusts employer-responsibility -- can subtract 30 employees from calculation. Must pay
$2K per employee if you don’t offer plan.
○ Implementation Funding (+1B) to HHS.
Subtitle B -- Medicare (Title III)
○ Donut hole rebate of $250. 25% subsidy, half-off brand-names(+24.8B)
○ Medicare Advantage benchmark reductions, requires MA spend 85% on care (-17B)
○ DSH cuts start later (+3B)
○ Hospital market basket reduction (-9.8B)
○ Hospitals in counties in bottom quartile of risk-adjusted spending per Medicare enrollee
get a payment (+400M)
Subtitle C -- Medicaid and public programs (Title II)
○ Strike the “Cornhusker compromise” (100% federal Medicaid matching)
○ Changes to federal matching rates for new Medicaid enrollees (+39B)
○ Medicaid payment rates to PCPs brought up to equal Medicare rates in 2013-14, Feds
must finance the difference (+8.3B)
○ DSH payment cuts reduced (+4.1B)
Subtitle D -- Fraud, Waste, Abuse (Title IV)
○ More funding for Health Care Fraud and Abuse Control Program (+0.3B)
Subtitle E -- Revenue (Title IX)
○ Lowers “Cadillac tax” threshold, generates more revenue (-32B)
○ 3.8% tax on unearned income (-210.2B)
○ Increased fees for pharmaceutical manufacturers (-27B)
○ Med-device manufacturer fee changed to 2.3% tax for each unit sold (-20B)
○ Increased fees on health insurance providers (-60.1B)