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Home / / 10 Healthcare Reforms Rolling Out In 2013

10 Healthcare Reforms Rolling Out In 2013

african female patient visiting doctorWith President Obama in the White House for another four years and the Supreme Court upholding the Affordable Care Act, Americans will continue to see changes in coverage and fees for healthcare.

Passed in 2010, we’ve already seen incremental changes: If you have a pre-existing medical condition that made it impossible for you to qualify for medical coverage before, you can no longer be denied coverage. Young adults can stay on their parents’ insurance plans up until age 26, and as of August 2012 there’s no more copay for your birth control pills or gynecological well-woman visits.

Here are 10 reforms set to launch this year:

Medicare

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1. Federal subsidies begin phasing in for brand-name prescriptions filled in the Medicare Part D coverage gap to reduce out of pocket costs for beneficiaries. Coinsurance will drop from the 2010 level of 100 percent of costs to co-payments of 25 percent in 2020.

Additionally, a 50 percent discount automatically will be applied at the pharmacy counter on Part D-covered prescription drugs while beneficiaries are in the doughnut hole.

2. The Medicare Part A (hospital insurance) tax rate will increase from 1.45 percent to 2.35 percent on earnings over $200,000 for single taxpayers and $250,000 for married couples filing jointly. When it comes to higher-income earners, there will also be a new 3.8 percent assessment on unearned income, such as investment returns.

3. Disproportionate share hospital (DSH) payments will fall initially by 75 percent. These are annual allotments states pass on to hospitals that serve disproportionate numbers of low-income patients. Medicaid DSH also will be reduced.

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Subsequently, payments will increase based on the percent of uninsured persons hospitals serve and the amount of uncompensated care that is provided.

Medicaid

4. Federal matching payments for preventative services will rise by 1 percentage point for states that offer Medicaid coverage with no patient cost sharing for services and immunizations they receive, as recommended by the U.S. Preventive Services Task Force.

Children’s Health Insurance Program

5. CHIP funding is authorized through 2013 but will be extended until 2015.

Taxes

6. The threshold for the itemized deduction for non-reimbursed medical expenses goes up from 7.5 percent of adjusted gross income (AGI) to 10 percent of AGI. That jump is waived, however, for taxpayers age 65 and older in tax years 2013 to 2016.

7. A 2.3 percent excise tax will be imposed on medical device manufacturers.

Flexible Spending Accounts

8. Contributions to health care flexible spending accounts to cover medical expenses will be capped at $2,500 per year, but could go up based on cost-of-living adjustments. Currently there is no legal limit, but there is a use-it-or-lose-it rule for contributed funds.

Retiree prescription drug subsidies

9. The tax deduction for employers who receive Medicare Part D drug subsidies for retirees will be eliminated. Some employers have been shifting more costs to retirees despite getting government dollars to offset their costs.

Penalties

10. Penalties will be imposed on employers who do not withhold sufficient Medicare payroll taxes for employees.

January 31, 2013 by Karissa Lang, BDO Contributing Writer

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