A Brief Timeline of Changes Wrought by Health Care Reform Bill

The health care reform bill signed into law by President Obama last year brings with it several changes to the way that insurance and medical care issues are handled. Below is a brief timeline of changes as they happen. They include projects carried out behind the scenes regarding analysis of how to modernize and improve insurance regulation.

Jan. 1, 2011:

1. Federal subsidies begin for generic prescriptions filled in the Medicare Part D "donut hole" coverage gap. Drug companies must now also provide a 50 percent discount on brand-name prescriptions for patients who are in the Medicare Part D coverage gap.

2. Seniors on Medicare will now receive free preventive services. These services include annual wellness visits and personalized management plans.

3. The new Federal Insurance Office (FIO) begins evaluating how to modernize insurance regulation. The FIO will monitor most lines of the insurance industry for risk throughout the financial system. It will then make recommendations to the Federal Stability Oversight Council (FSOC) about insurers that may pose a risk; that report is due in October. Another report on modernizing insurance is due in January 2012.

4. This is the start of a five-year program to provide a ten-percent bonus payment for primary care services, and similar ten-percent bonus for general surgeons who practice in an area where there is a shortage of health professionals.

5. Changes in some Medicare premiums start now. Premiums for Medicare Part B will be frozen at 2010 levels through 2019. However, premiums for Medicare Part D will go up for those with incomes above $85,000 for individuals and $170,000 for couples.

6. Private Medicare Advantage plans will have premiums frozen at 2010 levels but only for this year. MA will pay less for Medicare services.

7. A Center for Medicare and Medicaid Innovation (CMMI) is established. It will test new payment and delivery system models with the goal to raise quality while reducing costs.

8. Rules about minimum medical loss ratios (MLR) take effect. Both group and individual health insurances must spend a minimum percentage of premiums on medical expenses. If they do not, they may be forced to rebate funds to their policyholders. This is a controversial and confusing regulation, with insurers wondering if agent compensation is to be included in the formula. Some states have already applied for an exemption from this rule. Iowa is one example.

9. A long-term care benefits program commences. This will be a national and voluntary insurance program for employers and self-employed people. The plan is called the Community Living Assistance Services and Supports (CLASS) plan. Again, there is already some resistance to this offering, with some pushing for repeal.

10. Tax-free Health Savings Accounts have new limits. HSAs, whether they are Health Reimbursement Accounts or Flexible Spending Accounts, nor Medical Savings Accounts, may no longer reimburse for over-the-counter medications not ordered by a physician. Taxes on non-qualified distributions from HSAs or Archer MSAs increase to 20 percent of the amount used.

11. New York state's controversial Insurance Regulation 194 takes effect. This rule requires insurance agents to disclose how much they are compensated to consumers.

January 21:

1. Public companies, including public insurance companies, are now bound by rules regarding "say on pay" and "golden parachute" provisions of the Dodd-Frank law.

2. The Securities and Exchange Commission (SEC) reports to Congress on regulation of brokers, dealers, and investment advisors when they provide advice about securities. The SEC analyzes whether the fiduciary standard should apply to investment advisors as well as brokers and dealers. Insurance companies argue for using a suitability standard rather than the fiduciary standard.

March 23:

1. The federal government begins making grants available to states for ACA-required establishment of American Health Benefits Exchanges and Small Business Health Options Program Exchanges. Enrollment in these exchanges will begin on Jan. 1, 2014.

July 1:

1. The new Office of Financial Research (OFR) created by Dodd-Frank is scheduled to complete setting up its office and systems. This will be the research arm of Federal Stability Oversight Council (FSOC), collecting information from regulatory agencies, bank holding companies, and non-bank financial companies. It will provide periodic reports on its findings.

2. Startup of the new Bureau of Consumer Financial Protection (CFPB). Under Dodd-Frank, it will write rules on implementing consumer protection laws on finances, and supervise big banks and non-bank financial service providers.

3. The new FSOC submits its first annual report to Congress on the results of its monitoring program on systemic risk in the financial system.

4. New Department of Labor rules take effect. All defined contribution plan administrators and service providers that are subject to ERISA (Employee Retirement Income Security Act) will have to make certain disclosures.

September 30:

1. The FIO submits its first annual report to Congress regarding preemption of inconsistent state insurance measures.

2. The FIO also submits to Congress its first annual report on the insurance industry. Both reports are mandated by Dodd-Frank.

October 1 and 3:

1. On October 1, funding becomes available for administering the new Independent Payment Advisory Board. This board will develop and submit proposals on reducing the growth of Medicare spending (on a per capita basis) IF spending exceeds targeted growth rates. Their first recommendations are due Jan. 15, 2014.

2. On October 3, the Supreme Court begins its 2011 session, with some observers expecting challenges to health care reform to have made their way to the top court. The court has rejected one attempt to to move a case straight to the Supreme Court, and it is difficult to see how any of the cases now in the appeals process could be eligible for top review in this fall session.

December:

The Federal Insurance Office (FIO) finishes its study on how to improve and modernize insurance regulation. The report, required by Dodd-Frank, is due to be submitted to Congress in January, 2012.