The Simple Reader's Guide to Understanding the Affordable Care ACT (ACA) Health Care Reform


The Simple Reader’s Guide to Understanding the Affordable Care Act (ACA) Health Care Reform seeks to help you understand:

• What is health care reform?

• Why is the Affordable Care Act (ACA) Health Care Reform here?

• What is the ACA, a.k.a Obama Care?

• What are things you must know about ACA?

• How will ACA affect your individual, family and group health insurance plans?

• How can you purchase health insurance after 2013?

• How does a small or large business become and remain compliant?

• What is happening to ...

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The Simple Reader's Guide to Understanding the Affordable Care Act (ACA) Health Care Reform

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The Simple Reader’s Guide to Understanding the Affordable Care Act (ACA) Health Care Reform seeks to help you understand:

• What is health care reform?

• Why is the Affordable Care Act (ACA) Health Care Reform here?

• What is the ACA, a.k.a Obama Care?

• What are things you must know about ACA?

• How will ACA affect your individual, family and group health insurance plans?

• How can you purchase health insurance after 2013?

• How does a small or large business become and remain compliant?

• What is happening to the US health care system?

• How will the reform affect hospitals, physicians, and patient care?

• What are the overall benefits and challenges of ACA?

“By writing The Simple Reader’s Guide to Understanding the Affordable Care Act (ACA) Health Care Reform, Denecia Jones has provided a tremendous public service to the millions of Americans whose lives are profoundly affected by the Affordable Care Act. Knowledge is power, and Ms. Jones is certainly providing power to the people.”

—Wallace Ford, JD, professor in the School of Public Administration, Metropolitan College of New York

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Product Details

  • ISBN-13: 9781458210821
  • Publisher: Abbott Press
  • Publication date: 8/30/2013
  • Pages: 108
  • Product dimensions: 6.00 (w) x 9.00 (h) x 0.26 (d)

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The Simple Reader's Guide to Understanding the Affordable Care Act (ACA) Health Care Reform

By Denecia A. Jones

Abbott Press

Copyright © 2013 Denecia A. Jones
All rights reserved.
ISBN: 978-1-4582-1082-1


History of U.S Health Care Reform

Prior to the 1960s, seniors and the disabled did not receive health care to treat their health conditions because insurance plans were expensive and unaffordable to most. To fill the major void in the health care system, John F. Kennedy publicly discussed the concept of Medicare and Medicaid programs in 1962. With public support, Lyndon B. Johnson signed the amendment to the social security act, TITLE XVIII—Health Insurance For The Aged And Disabled, to the Social Security Act to add Medicare into our national health care system in 1965.

What is the difference between the Medicare and Medicaid? Medicare is our public health program that insures senior citizens and disabled people. Medicaid is our public health program that insures lower income individuals and their dependents as well as people with certain disabilities.

Health Maintenance Organization (HMO) Act of 1973

In 1973, President Richard Nixon signed the Health Maintenance Organization (HMO) Act of 1973. President Nixon helped fund the growth of the HMO system in the U.S. because he wanted to give Americans health insurance plan options. In President Nixon's statement on signing the HMO Act of 1973, he stated, "Health maintenance organizations provide health care to their members on a prepaid basis with emphasis on essential preventive services. The establishment of HMO's will allow people to select for themselves either a prepaid system for obtaining health services or the more traditional approach which has served the American people so well over the years." In the 1980s, HMOs plan options were a very popular plan design with employers. Today, the employer and individual plan market prefers PPO health insurance over HMO.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Prior to the 1990s, employees who decided to leave their employer were not able to take their health insurance plans with them. For those individuals who had an illness or had dependents who were ill on the insurance plans, getting health insurance coverage elsewhere was not an option. In the individual and family health insurance market, if someone had an illness and did not have insurance to cover expenses, insurance carriers declined to offer them coverage. In other words, the healthy could get health insurance coverage after they were removed from their employer plan, and the ill were left in the cold. Because of this loophole in the health care system, the Consolidated Omnibus Budget Reconciliation Act (COBRA) was signed into law in 1996. COBRA requires employers to extend group health benefits to employees who may no longer work for the company but who still want to maintain and pay for their health insurance plans. I cannot imagine a world without COBRA and wonder how the ill workforce survived when their group plan coverage ended.

Children's Health Insurance Program (CHIP)

In 1997, voters approved the Children's Health Insurance Program (CHIP). This program helps cover children who lack private insurance. CHIP allows low- to moderate-income families the ability to provide health insurance to their children through this public program. The program was created because families were living uninsured, especially if they could not get their children insurance. The program allowed children to be covered free or at a low rate because the federal government subsidizes the cost to make it affordable. Today, The Children's Health Insurance Program (CHIP) provides health coverage to nearly 8 million children in families with incomes too high to qualify for Medicaid but who can't afford private coverage.

Medicare Modernization Act (MMA)

In the early 2000s, The United States had a major dilemma with senior citizens. The costs of prescription drugs were very expensive for most people who did not have insurance. As a result, many seniors would travel across the U.S. border to Mexico and Canada to purchase more affordable drugs. I remember traveling to Costa Rica and meeting a citizen of Canada on my trip, and we started to discuss health care. He mentioned that seniors from the U.S. would go to use their health care system for the affordable drugs it offered to anyone so much that Canadians had to pay additional co-pays for drugs because there was a shortage for Canadians. I was very surprised. I never would have thought that in the golden years, the most established part of their lives for some, senior citizens would have to travel to another country to get prescription drugs because they simply could not pay the expensive rates for them in the United States. Once the United States was notified by Canada about the issue, Congress created a bill to resolve it.

The Medicare Modernization Act of 2003 (MMA) was created and approved by Congress. George W. Bush signed it into law that same year. The Medicare Modernization Act is also known as the Medicare Part D law; this program expanded prescription drug benefits to senior citizens. If a senior had the Medicare supplemental health insurance plan from an insurance carrier, that senior would also need to purchase a Medicare Part D health insurance plan and pay for drugs through that Part D plan. Senior citizens who purchased a Medicare supplemental plan who did not purchase a Part D at the time of the original enrollment would be subject to a penalty of 1%. "The late enrollment penalty is calculated by multiplying 1% of the "national base beneficiary premium" ($31.17 in 2013) times the number of full, uncovered months you were eligible but didn't join a Medicare Prescription Drug Plan and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium." Senior citizens who do not enroll in time and do so at a later date are unaware of this penalty until they enroll. Once enrolled, those seniors are notified by the Medicare Part D plan because their penalty is incorporated into their monthly premiums.

Affordable Care Act

If you are unaware of the true dilemma of our current health care system, here is the information you need to increase your knowledge. Health monthly premiums and health care expenses with insurance have skyrocketed in the past 10 years. When I say skyrocketed, I don't mean like a paper airplane flight only a few degree above the ground. When I say skyrocketed, I mean the cost of health care has gone straight up like watching a space shuttle flight flying straight into outer space. Our health care system cost is increasing so much that there is no end in sight. For example, "The Kaiser Family Foundation reported that from 1999 to 2009, health insurance premiums for families rose 131%." I am sure you are wondering if the ACA reform is helping with slowing down that increase. Based on reports, the answer is yes. Monthly premiums have increased due to additional benefits required by law, such as dependent coverage until 26 years old and maternity coverage on all policies. The cost has also increased because of the insurance taxes incorporated in the new insurance rates that are used to pay for establishing the federal and state health insurance exchanges. ACA rates have shown a track record of health care cost increases, but those increases are less than previous years. It may be because ACA took effect in the middle of one of our worst recessions, and it may be because the ACA requires insurance carriers to pay policy holders money back if they did not spend premiums on their claims, a process called medical rebates. Another reason the rates may be steadily increasing instead of the previous drastic increases is government monitoring on how much insurance carriers can increase policy holders health insurance premiums. In the end, The Kaiser Family Foundation has shown that whatever is being done, it is slowing down the cost of health care.

The one thing that we have to remember when we compare rates of increases is that no one can put a number of the amount of money it costs to maintain someone's life. Life is priceless. It is nearly impossible to explain the difference of inflation on a car versus inflation on adequate health care to maintain someone's lifestyle or life. These two things are not an apple-to-apple comparison. When you try to compare these two subjects, it is more like an apple to an elephant. The elephant will always be more expensive and breathtaking.

On March 23, 2010, President Barack Obama signed the Patient Protection and Affordable Care Act (PPACA), or ACA into law. The law includes numerous health-related provisions to take effect over an eight -year period, including prohibiting denial of coverage and claims based on pre-existing conditions, insurance taxes and penalties for insurance carriers, businesses, and individuals. ACA also expands Medicaid eligibility, subsidizes insurance premiums, provides incentives for businesses to provide health care benefits, and establishes health insurance exchanges and support for medical research. Senior citizens will see a discount of up to 53.5% for brand-name prescription drugs once they meet their drug plan deductible, also known as the prescription donut hole.

Health Care System Past and Future

In the beginning of the Health Care System in the United States, the main objectives were to have a system that allowed physicians to assist their patients and insurance carriers to help both their community of patients and their doctors. One of the ways that insurance carriers did this was to create the prepaid health insurance plan where patients pay a monthly premium for their health insurance to pay for future health insurance expenses from a doctor or hospital. The insurance carriers would market doctors to new patients and remind patients of any out-of-pocket payment that was due to the physician(s). The setup was very simple when health insurance plans were first established over 200 years ago in the U.S.

As physicians' cost increased physicians increased their rates for services to pay for expenses. Soon after this change, patient ability to pay doctors became unmanageable. It was at this point that the insurance carriers got into the cost management side of the business. This portion of their business is when an insurance carrier reviews a physician's rate and study's the average rate in that physician's geographical area. Then the insurance carrier determines the in-network doctor's rate for that particular service, even if the doctor wants more money for that particular service.

Soon after this change of claim processing, physicians not only had difficulty collecting money for past services from patients, but also faced difficulty in collecting from insurance carriers on past services provided. During this time, physicians had the opportunity to work with pharmaceutical companies on making additional streams of income by prescribing prescription drugs to patients. Physicians not only got money back for drugs prescribed, but there also were nice trips and kickbacks given to them by pharmaceutical companies. For a short time, these helped physicians with supplementing their income until now.

You see, part of the reason health care costs are so high is many Americans use prescription drugs. As a result, the cost of prescription medications spending in the U.S. was $259.1 billion in 2010 and is projected to double over the next decade. The current rate of growth has slowed from the highs of the 1990s and early 2000s to a more modest rate, but it is expected to increase sharply in 2014 after the individual and family insurance coverage mandate in each state becomes effective. In 2010, 90% of seniors and 57% of non-elderly adults had a prescription drug expense. Additionally, as the number of medicines being prescribed increased: from 1999 to 2011, the number of prescriptions rose 43% (from 2.8 billion to 4 billion), outpacing U.S. population growth by 9%. Although still only a modest part of total health care spending in the U.S (10%), with so many people relying on prescriptions, the cost implications loom large for the American public and health insurers.

Prescription drugs are a huge cost to health insurance carriers. One of the things we will see to reduce the cost is tier prescription drug models that are manage by pharmaceutical providers like CVS and Express Script. These providers create a tier system that allows patients to get brand-name prescriptions only by moving up through several tiers of preferred generic drugs before they are all allowed to purchase expensive brand-name prescription drugs.

I had the chance to check out the system myself in the spring of 2013. I was on a brand-name drug for acid reflux for a year through the insurance of my husband's old employer when he enrolled to the same insurance carrier in a PPO plan similar to what we had before. However, this plan had a different pharmaceutical administrative company. My access to the brand-name drug that I had been using was now denied. When I asked why the pharmaceutical administrative company denied it, they said it was because I had not gone through the lowest tier yet. When I asked for clarification, they told me that I needed to try a prescription drug-generic prescription tier 1 and if the drug wasn't effective, I would need to go through the appeal process. Once the appeal process was complete on my end and approved on theirs, they would allow me to go to the next tier. This tier contained strengthened versions of the first tier drugs. When I asked how many tiers it would take for me to appeal to get brand-name drugs, I was told three.

I was very unhappy with this approach and the results. I personally don't like taking prescription drugs for any reason unless I need them to function. I only wanted to function on my healthy diet without feeling like my digestive system was in pain all the time. So for the next few months, I was busy going through the appeal process. My doctor had to submit the appeal paperwork to the pharmacy and the pharmaceutical administrative company. Then we would just wait to make sure they received proper paperwork and make a decision on my request for an appeal. The Pharmaceutical administrator approved my third request for appeal in three months. I was glad they approved my request but I was very disappointed with the process.

From a company perspective, I understand that they were trying to cut health care costs for everyone by using this system that has been utilized by the military for many years. On a consumer side, my husband and I pay for our own health care through his employer. If the company wants happy employees, then their best bet is to not give the wife of an employee the run around when she needs her existing prescription drugs. The company has since changed the pharmaceutical administrator due to employee complaints. It was nice to know that I was not the only one who had an issue with the new drug tier system. It is also nice to know that my husband's employer acknowledged and changed company policy to make sure staff and their families were happy with the results. In this case, change was a good thing.

Today, a once simplified health insurance system is so complicated that it took the U.S. government months to create a 1000-page document explaining the new PPACA health care reform law. Consumers who once trusted the insurance carriers and saw them as the hero when consumers needed to use their insurance are now weary after past reports show that insurance carriers drop ill patients from insurance policies. Granted, there were some individuals who falsified information on their applications, such as not disclosing illnesses that were required by law, and the carrier would drop coverage and retroactively collect the amounts covered by the insurance. However, some of the people who the insurance carriers dropped did not falsify their applications.

Physicians and Hospitals

When the American health care system was created many decades ago, a physician's main purpose was to heal the ill with traditional Western medicine. The American Medical Association (AMA) was created by physicians to find ways to best care for people in each community. Prior to the formation of AMA, physicians had an issue with providing care to clients who had no money to pay for their care. The dilemma for physicians was that they weren't able to pay their business expenses to continue caring for their clients. As a solution to the issue, the first health insurance plan was established in Houston, Texas. Blue Cross was a prepaid health insurance program similar to what most Americans use on a daily basis today. The goal of the plan was to help physicians receive payment for services prior to patient visits. It helped patients with a pay-as-you-go plan that was strictly used for medical expenses.

This program was such a success that it spread across the nation like a wild fire. With new regional locations being added to the program and new insurance carriers repeating the same structure or creating alterations to the structure, insurance carriers became the heroes of the communities in which they worked. They helped connect physicians and hospitals for the purpose of helping the community by caring for the ill. This concept created a way to see the patients before they were chronically ill. Today, physicians' current insurance payments that they once applauded have shrunk, and as a result, physicians and hospitals get less reimbursement for their provided services. Furthermore, most physicians and hospitals must have a staff or collection agency to collect the payment promised by the insurance carriers for the services. As a result, these solution increase that physician expenses and pressure to see more patients or find alternative routes to increase their revenue.

Excerpted from The Simple Reader's Guide to Understanding the Affordable Care Act (ACA) Health Care Reform by Denecia A. Jones. Copyright © 2013 Denecia A. Jones. Excerpted by permission of Abbott Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents


History of U.S Health Care Reform....................     1     

Health Maintenance Organization (HMO) Act of 197....................     33     

Consolidated Omnibus Budget Reconciliation Act (COBRA)....................     5     

Children's Health Insurance Program (CHIP)....................     7     

Medicare Modernization Act (MMA)....................     9     

Affordable Care Act....................     11     

Health Care System Past and Future....................     13     

Physicians and Hospitals....................     17     

Concierge Medicine....................     19     

Physicians' View Point....................     23     

Medical Trends....................     25     

Bi-Socialized Medicine....................     29     

Agents and Navigators....................     31     

What Will Happen to Our Health Care System?....................     33     

ACA Affordable Health Care?....................     35     

Individual and Family Plans after ACA....................     37     

Grandfathered and Non-Grandfathered Plans....................     39     

Guaranteed Issuance....................     41     

Balance of Cost and Patient Care....................     43     

Senior Citizens....................     45     

Accountable Care Organizations (ACO)....................     49     

Businesses and ACA....................     51     

ACA Health Care Reform and Business Response....................     53     

Auto Enrollment....................     58     

ACA Large Group Penalties:....................     59     

Health Insurance Exchanges....................     59     

ACA Health Reform Time Line....................     61     

Employer Reporting Tool....................     67     

ACA Benefits....................     69     

ACA Challenges....................     75     

Hospitals and Physician Changes....................     79     

Why was the ACA created?....................     81     

Tax Changes....................     83     

Business "must haves" for ACA Compliance....................     87     

Simplify ACA regulations for employers with more than 50 FTE...............     89     

Purpose....................     93     

Endnotes....................     97     

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