Mar 25, 2011
March 23rd marked the one-year anniversary of the Patient Protection and Affordable Care Act (PPACA). The date was marked with numerous events on Capitol Hill and around the country, some celebrating its enactment and others urging its repeal. With one year of implementation finished and seven more ahead, it is clear that the law has lost none of its power to polarize. There have been numerous challenges to the law on Capitol Hill and in the courts, none of which have slowed the Obama administration in its implementation of the various provisions of the law. For the latest information read summaries below about: A Year of Change Re-Capped, More Change to Come, Repeal Unlikely, and The Big “I” Defense of Small Business & Consumers.
A Year of Change Re-Capped
Over the last year, numerous provisions of the PPACA have been put into effect spanning from the popular but narrowly-applicable temporary small business tax credits to the detrimental and misguided Medical Loss Ratio (MLR) regulations. The rules on what plans can be “grandfathered” were hashed out last summer, followed shortly thereafter by the launch of the federal government’s “Web portal” (www.healthcare.gov). Last fall brought with it the “Sept. 23 market reforms,” including allowing young adult coverage on parents’ plans until age 26, the ban on lifetime limits and pre-existing condition coverage for children. Jan. 1, 2011, was also notable in that the MLR requirements went into effect, leading to a squeeze on agent compensation as carriers scramble to meet the mandated formula. The Big “I” is actively advocating for H.R. 1206, the “Access to Professional Health Insurance Advisors Act of 2011,” by Reps. Mike Rogers (R-Mich.) and John Barrow (D-Ga.), which would exclude agent compensation from the MLR formula.
More Change To Come
Looking ahead, if Congress does not enact a targeted repeal bill, the onerous 1099 reporting mandated will go into effect on Jan. 1, 2012. Then on Jan. 1, 2013, the small business tax hikes of 0.9% for the Medicare payroll tax and 3.8% on investment income will take effect. Each of these tax increases will affect those earning more than $200,000 ($250,000 for joint filers), and this dollar amount is not indexed to inflation. 2014 is arguably the most significant year for implementation, as this will be the year of the dramatic expansion of Medicaid, the creation of state exchanges, guaranteed issue and the individual and employer mandates. Implementation of the PPACA is scheduled to end with the excise tax on high-cost plans (the so-called “Cadillac tax”) in 2018.
Meanwhile, the challenges to the PPACA continue on Capitol Hill and in the courts. As one of its first actions this year, the Republican-controlled House of Representatives passed a bill to repeal the law in its entirety. However, this effort is not likely to succeed since Democrats control the Senate and President Barack Obama would be expected to veto any such bill. Additionally, a veto override requires a two-thirds vote in both the House and the Senate. Various constitutional challenges are also working their way through the courts, with the rulings in federal court now standing at three in favor of upholding the PPACA (in Washington, D.C., West Virginia and Michigan) and two in favor of striking down either parts of or the entirety of the law (in Virginia and Florida). A showdown in the U.S. Supreme Court is likely at some point in the future.
The Big ‘I” Defense of Small Business & Consumers
Despite these challenges to the law, the Obama administration is pressing ahead with implementation. The Big “I” is working at the federal and state level to mitigate the burdens on small businesses, and to ensure that consumers will continue to have much-needed access to agents and brokers no matter how the health care landscape shifts.
Other than minor edits and headlines this article was written by Ryan Young , Big “I” senior director of federal government affairs.
The original article was published on March 24, 2011 in Independent Insurance Agents Magazine titled “PPACA Hits One-Year Anniversary Milestone”.