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Obamacare Upheld—What's Next for Grants?

by Timothy Tiernan on July 9, 2012
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ACA, Affordable Care Act, individual mandate, Obamacare, health care legislation, healthcare legislationThe Affordable Care Act (ACA) is considered by many to be the signature piece of legislation for President Obama and has arguably been the greatest point of political contention during his presidency. So when the Supreme Court upheld Obamacare in a 5-4 decision on June 28, with Chief Justice John Roberts joining the liberal justices in declaring the individual mandate a constitutional tax, both sides of the political aisle were bolstered.

The umpteen opinions from the left, right, and center to follow from this decision need not be cited here; the purpose of this blog is not to delve into the political discussion but rather to help grant-active local governments and organizations secure more grants, more funding, and more time to procure those grant dollars. Naturally, what legislation may affect those opportunities is part of this blog’s purview.

 

Recap on Medicaid Expansion

Medicaid expansion, which is to take effect in January 2014, is a central element of the bill and expands Medicaid coverage to people under 65 whose income is at or below 133% percent of the federal poverty level. The federal government will pay 100% of states' costs for expanding Medicaid for the first three years, phasing to 90% federal funding in subsequent years.

While ACA could extend Medicaid to include millions of people who are currently medically indigent, the Supreme Court declared that states have the power to opt out of the Medicaid extension and that the federal government cannot penalize states by withholding all Medicaid funding; rather, opt-out states would not get the additional Medicaid money to cover newly eligible enrollees.

Now that the Court has granted the Affordable Care Act a more stable future, let’s recap what has been covered and what will be covered by the law.

 

What’s Been Funded

Since it was enacted in March 2010, ACA funding has been distributed to a wide range of grants. Here’s an annotated sample of the grants that the ACA umbrella has covered:

  • Health Center Controlled Networks Program: Supports the adoption and implementation of health information technology and supports quality improvement in health centers throughout the U.S. and its territories. Awards will support the adoption and use of certified electronic health records and technology-enabled quality improvement strategies in health centers. In Grants Network as US12329.
  • Consumer Assistance Program: Assists states with consumer assistance, including the education of consumers on their rights and responsibilities with respect to group health plans and health insurance coverage. In Grants Network as US9585.
  • State Loan Repayment Program: Helps states in the repayment of educational loans of health professionals who agree to provide full-time primary health services in federally designated health professional shortage areas (HPSAs). In Grants Network as US1911.
  • Childhood Obesity Research Demonstration: Investigates whether an integrated model of primary care and public health approaches can improve risk factors for obesity in underserved children. In Grants Network as US10099.

 

What Will Be Funded (2012-2013)

The continued ACA rollout will take place over the next couple years and includes the following changes to take effect starting October 1, 2012 (FY 2013):

  • Reducing Paperwork and Administrative Costs: Effective October 2012. Will simplify paperwork and lessen administrative hassle to minimize insurance company bureaucracy. Comes alongside investments in electronic health record adoption that will bring doctors’ offices and hospitals into the 21st century.
  • The Hospital Value-Based Purchasing Program: Effective October 2012. Will distribute an estimated $850 million to hospitals based on their overall performance on a set of quality measures that have been linked to improved clinical processes of care and patient satisfaction.  Funding to be taken from what Medicare otherwise would have spent for hospital stays, resulting in a shift from payments based on volume to payments based on performance. Intended to result in significant, additional savings to Medicare, taxpayers, and enrollees over time. Read more here.
  • Improving Preventive Health Coverage: Effective January 2013. Will expand the number of Americans receiving preventive care. Provides new funding to state Medicaid programs that choose to cover preventive services for patients at little or no cost.
  • Increasing Medicaid Payments for Primary Care Doctors: Effective January 2013. States to pay primary care physicians no less than 100% of Medicare payment rates in 2013 and 2014 for primary care services. Increase is fully federally funded. Read more here.
  • Expanded Authority to Bundle Payments: Effective January 2013. Improves coordination and quality of patient care by establishing “bundling,” a payment structure in which different health care providers treating a patient for the same or related conditions are paid an overall sum for taking care of the patient’s condition rather than being paid for each individual treatment, test, or procedure.
  • Additional Funding for the Children’s Health Insurance Program (CHIP). Effective October 2013. States will receive two more years of funding to continue coverage for children who are not eligible for Medicaid.

 

The Big Year: 2014

Major features of ACA, including Medicaid expansion, are set to occur in January 2014. Here are some of the anticipated changes:

  • Individual Mandate: Individuals who can afford it will be required to obtain basic health insurance coverage or pay a fee to help offset the costs of caring for uninsured Americans. Read more here.
  • Affordable Insurance Exchanges: Exchanges will be provided to individuals and small businesses so they can compare price and quality for private health insurance options. (A map of state grant distribution to establish these exchanges can be found here.) Qualifying individuals may be eligible for exception or assistance.
  • Medicaid Expansion: For opt-in states, Americans who earn less than 133% of the poverty level will be eligible to enroll in Medicaid. The federal government will pay for the first three years to support this expanded coverage; states will pay 10% in subsequent years.
  • Ensuring Insurance, Eliminating Limits: Insurers will be prohibited from dropping or limiting coverage because an individual chooses to participate in a clinical trial. Annual dollar limits on the amount of coverage an individual may receive will be prohibited for new plans and existing group plans.
  • Defeating Discrimination: Insurance companies will be prohibited from refusing to sell coverage or renew policies because of an individual’s pre-existing conditions; for individual and small group market, insurance companies will be prohibited from charging higher rates due to gender or health status.
  • Tax Credits for the People: This tax credit will become available to those with income between 100% and 400% of the poverty line who are not eligible for other affordable coverage.
  • Tax Credits for Small Businesses: This is the second phase of the small business tax credit for qualified small businesses and small nonprofit organizations. In this phase, the small business tax credit for qualified small businesses and small nonprofit organizations is up to 50% of the employer’s contribution and will provide health insurance for employees. There is also up to a 35% credit for small nonprofit organizations.
  • Physician Payments Tied to the Quality of Care: Those who provide higher value care will receive higher payments than those who provide lower quality care. (Effective January 2015.) 

Sources

For more details on the Affordable Care Act, see the timeline of the health care rollout. The link to the bill itself is at the top of this article.

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