Obama 2.0 – What’s Next for Healthcare?

It’s always exhilarating watching a Presidential inauguration.

The pomp and pageantry celebrates more than 200 years of orderly transition of government.

It’s always exhilarating watching a Presidential inauguration.

The pomp and pageantry celebrates more than 200 years of orderly transition of government.

Under the mantle of our 44th President, the next four years hold some exciting changes for health care. Here’s a brief look at what 2013 will bring.

2013 is primarily a transition year. By February 15, states must notify the Department of Health and Human Services whether they intend to partner with the federal government to establish Health Exchanges — or let the federal government do it for them. These exchanges must be up and running by December 14, because starting January 1 next year, about 30 million more people will be able to get health coverage – including those that could not previously afford it, or get insurance because their employers didn’t offer it, or were excluded due to pre-existing conditions.

Consumer Operated and Oriented Plans (CO-OP), funded by the department of Health and Human Services, will be created by July 1. These co-ops are non-profit, member-run health insurance companies. More preventive services covered under Medicaid at no cost to beneficiaries. States receive a 1 percent increase in Medicaid payments to cover this expense. States must pay primary care physicians who treat Medicaid patients no less than current Medicare reimbursement rates for the next two years. The goal is to encourage PCPs to treat lower income patients without financial penalty.

Medicare:  Recipients get more part D discounts for prescriptions, as the “donut hole” shrinks. Physicians will get  a flat fee to treat an illness, instead of by episode of care. This is an important change, as it sets the stage for “wellness” care, rather than “sick care.”

Funding is also earmarked for a national pilot program of “bundled” care — which encourages the entire health team – primary care doctors, specialists, hospitals, and other providers – to work together to deliver the best possible care without unnecessary duplication of services or tests. Providers share one combined, or bundled, payment, that encompasses all care for that patient for that episode of care.  Ideally it incentivizes them to improve care while constraining costs.

Another two years of federal funding to the states for the Children’s Health Insurance Program. means that kids ineligible for Medicaid continue to get health care. New funding is slated to begin in October.

Individuals earning over $200,000 annually ($250,000 for married couples filing jointly) are paying a higher Medicare tax rate (from 0.9% to 1.45%) as of January 1st of this year. Medical devices are also subject to a new excise tax. And if you itemize your medical deductions, the threshold for unreimbursed expenses jumps to 10 percent from 7.5 percent of your adjusted gross income.

Many of these activities are precursors to full implementation of the Affordable Care Act in 2014 :

• health insurance marketplaces
• a requirement for most people to obtain coverage, with an increased emphasis on individual responsibility
• increased Medicaid access by low-income earners
• tax credits to partially offset the cost of insurance
• elimination of annual coverage limits by insurance companies
• prohibiting insurers to “cherry pick” only the healthiest patients
• a ban on discrimination in insurance rates because of gender or health status
• additional tax credits for small businesses

and many more efforts, large and small, that are designed to set this country, and its citizens, on a path towards healthier lives, while finally taming the cost beast. Will it work?

Stay tuned.