The Affordable Care Act: Reviewing Impacts and Opportunities
Berger, Barrie Tabin, Government Finance Review
Since the 2010 enactment of the Patient Protection and Affordable Care Act, the GFOA has monitored the release of both federal regulations on implementation and Congressional initiatives to amend the law in order to determine the opportunities and impacts state and local governments face, as employers. This article summarizes recent federal activity on the ACA, discusses how it may affect state and local governments, and reviews the GFOA best practices that will help state and local governments adapt to health-care reform.
ENROLLING IN THE EXCHANGES
The ACA had a significant year in 2013. Having passed constitutional muster in 2012, a key component of the law became effective on October 1, 2013, when the state exchanges, or marketplaces, opened to provide a place for individuals and small businesses, including smaller governments, to purchase health-care coverage (which would begin on January 1, 2014). Sixteen states and the District of Columbia are currently operating their own exchanges, while 15 states have cooperative federal-state partnerships, and 19 have exchanges run by the U.S. Department of Health and Human Services. Large employers--defined as those with more than 100 employees --will not be eligible to purchase coverage through the exchanges until 2017, and then only at the discretion of their state. To help communities take advantage of the new options in the health insurance marketplaces, HHS released a toolkit for local elected officials. (1) The toolkit includes an overview of the ACA, a sample outreach and enrollment plan that can be tailored to individual communities, a listing of frequently asked questions and answers, resources and information on training sessions, contacts for HHS regional offices, and sample materials that can be used for newsletters, social media, and public events.
While initial enrollment efforts were fraught with technical difficulties, the health insurance exchanges saw a surge of successful enrollments in December 2013, once all the glitches had been ironed out, pushing the number of enrollees to more than 2 million, according to HHS. Open enrollment will continue through March 31, 2014, and the Congressional Budget Office projected last year that 7 million people will have signed up by that date. (Information on enrollment can be found at www.healthcare.gov.)
The health insurance marketplaces have helped implement another of the ACA's most sweeping changes, the requirement that everyone in the United States, with certain exceptions, have health insurance coverage by January 1, 2014, or pay a penalty. According to HHS, starting in 2014, "the individual shared responsibility provision calls for each individual to have health insurance coverage (known as minimum essential coverage), qualify for an exemption, or make a shared responsibility payment when filing a federal income tax return. Individuals will not have to make a shared responsibility payment if coverage is unaffordable, if they spend less than three consecutive months without coverage, or if they qualify for an exemption based on hardship, religious beliefs, or certain other factors." This mandate was the chief objection to the ACA in the Supreme Court case that challenged the law's constitutionality. However, the Supreme Court upheld the constitutionality of the act, finding that the mandate to purchase health insurance was a valid exercise of Congressional power to impose taxes. The Treasury Department, the Internal Revenue Service, and HHS issued final rules on August 27, 2013, implementing the individual shared responsibility provision of the ACA. (2)
As of January 1, 2014, many other significant provisions of the ACA also took effect. In particular, the following "essential benefits" must be included under all insurance plans with no lifetime or annual dollar limits: emergency services; hospitalizations; laboratory services; maternity care; mental health and substance abuse treatment; outpatient or ambulatory care; pediatric care, including oral and vision; prescription drugs; preventive care; and rehabilitative services. …