What Wonders Have They Wrought? The Patient Protection and Affordable Care Act

The Affordable Care and Patient Protection Act o 2,409 pages o 477,520 words o Reconciliation Package 153 pages 34,000 words o 13,000 Pages of Regulations

Prepared by the Joint Economic Committee Republicans

Health Care After Reform

5 Key Components Individual Mandate Employer Mandate Insurance Regulation Subsidies & Medicaid Expansion Insurance Exchange

How Much Will It Cost?

Paying for PPACA New Taxes $1 Trillion Debt$1.48 Trillion

$1 Trillion in Taxes Under PPACA 1.Excise Tax on Charitable Hospitals 2.“Black liquor” tax hike, a tax on a type of biofuel 3.Tax on Innovator Drug Companies 4.Blue Cross/Blue Shield Tax Hike 5.Tax on Indoor Tanning Services 6.Codification of the “economic substance doctrine” This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans 7.Medicine Cabinet Tax: HSAs, FSAs and HRAs taxed when buying over the counter medicine 8.HSA Withdrawal Tax Hike 9.Surtax on Investment Income 10.Hike in Medicare Payroll Tax 11.Tax on Medical Device Manufacturers 12.High Medical Bills Tax 13.Flexible Spending Account Cap – aka “Special Needs Kids Tax” 14.Elimination of tax deduction for employer- provided retirement Rx drug coverage in coordination with Medicare Part D 15.$500,000 Annual Executive Compensation Limit for Health Insurance Executives 16.Individual Mandate Excise Tax 17.Employer Mandate Tax 18.Tax on Health Insurers 19.Excise Tax on Comprehensive Health Insurance Plan The Law Imposes 19 New Taxes Source: Americans for Tax Reform

My Insurance Premium? Premiums Will Double in Next 6-10 Years Premiums Will Double in Next 6-10 Years Change as Result of PPACA Change as Result of PPACA o Big Business: No Change to 3% Savings o Small Business: No change to 1% Savings o Individual Policy: 10-13% Increase o Young & Healthy: 17-95% Increase

Does PPACA Ration Care? No Direct Rationing

Independent Payment Advisory Board (IPAB) Starting in 2017 Not a “death panel” Base Closing-Style Panel If Medicare spending exceeds GDP + 1, IPAB must recommend cuts. Congress can reject recommendations in total. If Congress does not act, recommendations are implemented Cannot recommend cuts in benefits, increase out-of-pocket expenses or premiums, or restrict eligibility. Cannot cut hospital payments until What’s left?

Potential Problems No Judicial Review Physicians may stop accepting Medicare patients 15 percent of hospitals and nursing homes that provide Medicare services could “become unprofitable” over a decade, according to CMS

Universal Coverage?

Some PPACA Benefits “Donut Hole” closing Improved coverage for screening and preventive care Experiments in cost reduction: ACOs, Medical Homes, P4P $ for community health centers

Issues for North Carolina Should North Carolina Establish an Exchange? Should North Carolina Expand Medicaid?

Status of Health Insurance Exchanges

Status of Medicaid Expansion Decisions

Medicaid Expansion in North Carolina Costs Increased Enrollment North Carolina faces $3.075 billion in increased Medicaid costs from due to the Medicaid expansion in the ACA The federal government faces increased costs of $39.68 billion over the same period In 2022, 742,000 more Medicaid enrollees compared to the no ACA baseline: 568,000 more enrollees made newly eligible by Medicaid Expansion 174,000 more enrollees through the ‘woodwork effect’

2010 Medicare Beneficiary Drug Rebate Dependent Coverage Extended to Age 26 Health Plans Required to Cover Preventive Benefits 2011 Minimum Medical Loss Ratio for Insurers Medicare Advantage Payment Reductions Increased Medicare Premiums for High- Income Beneficiaries 2012 New annual fees on pharmaceutical industry Medicare Value-Based Purchasing Reduced Medicare Payments for Hospital Readmissions 2013 Begins Phasing in Subsidies to Close Medicare Part D 'Donut Hole' Establishes Flexible Spending Account Limits Medicare Part A Tax Increase Tax on Medical Devices Cuts in Medicare DSH Payments 2014 Expanded Medicaid Coverage Health Insurance Exchanges Individual Mandate Employer Mandate No Annual Limits on Coverage Essential Health Benefits New Fees on Health Insurance Sector 2017 IPAB 2018 New Tax on Comprehensive Insurance Plans PPACA Timeline Enacted Pending