Obamacare Update: Changes to Expect in 2013

 February 14, 2013
Posted by M&LAdmin4

Thursday, February 14, 2013

I’m sure that many of you reading this blog are, by now, very familiar with the Patient Protection and Affordable Care Act, commonly referred to as the “Affordable Care Act”, but known to the majority of Americans simply as Obamacare.  In case you aren’t familiar with Obamacare, it is an act which was passed by congress and signed into law by President Obama in March of 2010. Obamacare was created with the intention of providing the millions of Americans living without medical insurance with greater access to affordable medical care. The controversial bill was denounced as unconstitutional by critics, and brought before the United States Supreme Court. In July 2012, the Supreme Court ruled in favor of Obamacare, and upheld most of the reforms that it proposed.

In July, M&L Special Needs Planning published a blog titled What Obamacare Really Does for Individuals with Disabilities. In this blog we outlined the ways in which the Affordable Care Act would positively impact individuals living with a disability. Our discussion included the abolition of the pre-existing condition clause – which allowed insurance companies to deny coverage – and the elimination of the insurance coverage limit, which removed the right for insurance companies to cease coverage once a certain cap was reached, among other benefits. While the majority of Obamacare’s reforms, including those discussed in the aforementioned blog, will be enacted in 2014, we can expect a number of changes under the Act this year. As such, we felt that that called for an Obamacare update – a discussion of some of the changes you will be facing in 2013.

Changes to expect from Obamacare in 2013

The majority of the Obamacare changes in 2013 are tax related. To begin with, high wage earners (those who earn more than $200,000 a year or $250,000 for couples) will now face a 0.9% tax hike.[i] There is a new medical device tax; artificial joints, bed pans, and defibrillators, as well as many other medical devices, are now subject to a 2.3% tax[ii]. Changes have also been made to the ways in which Americans calculate medical deductions. Previous to this year, Americans could claim a deduction if total medical expenses added up to more than 7.5% of their earnings; as of 2013, that amount has risen to 10%[iii]. (Note: We are not tax professionals. Please verify all information with your accountant.)

Of all the tax related changes that came into effect on January 1st, the one that is perhaps of the most interest to the special needs community is the Flexible Spending Account (FSA) cap. The FSA is an account that is established by an employer for the benefit of an employee. In this account, an employee can deposit pretax dollars that are intended to pay for qualified medical expenses not covered by health insurance. Previous to this cap, the amount of money that could be deposited by an employee to his or her FSA was technically unlimited – it was up to the discretion of the employer, however, and most employers did enforce a limit[iv]. As of January 1st, FSA contributions are limited to $2500 per year.  While critics say that this is detrimental to the special needs community, supporters say that the decision was based on the national average amount of the FSA and claim that increased insurance coverage will eliminate the need for a higher FSA cap amount.

In addition to these tax regulation changes, a number of new programs are being implemented under Obamacare in 2013. One program, Payment Bundling, proposes that an “episode of care is billed as a whole, rather than paying for each service separately.[v]” It is intended to streamline the process of receiving medical care by facilitating a higher level of cooperation between medical professionals, while increasing the quality of care and lowering costs[vi]. Another program, one intended to promote preventative services, is also in effect. State Medicaid programs offering preventative services, such as cancer screenings, counseling for weight loss, addiction, and smoking cessation, routine vaccinations, and testing for diabetes, high blood pressure, and other preventative services for free, or at little cost to the patient, will now receive money from the federal government.[vii]

As well, as of 2013 CHIP, the Children’s Health Insurance Program, has been extended for another two years. The program is a collaboration between state and federal government that ensures that “children in families with incomes too high to qualify for Medicaid, but cannot afford private healthcare insurance, have healthcare coverage.”[viii] Funding has been extended until 2015.

These are just a few of the changes facing Americans this year under the Affordable Care Act healthcare reforms. A complete list of tax related changes expected under Obamacare in 2013 can be found on the IRS website . For a complete listing of other changes in 2013, click here. If you have any questions on how the Affordable Care Act can affect you, your family, or your child with special needs, please contact us. We are here to help you plan for a happy, healthy and financially secure future for you and your family. Thank you for taking the time to stop by our blog today. From the staff of M&L Special Needs Planning, have a great day!

[i] http://www.cnn.com/2013/01/04/health/obamacare-2013
[ii] http://www.cnn.com/2013/01/04/health/obamacare-2013
[iii] http://www.forbes.com/sites/kellyphillipserb/2012/11/26/tax-breaks-for-medical-expenses-under-obamacare/
[iv] http://www.investopedia.com/terms/f/flexiblespendingaccount.asp
[v] http://www.cnn.com/2013/01/04/health/obamacare-2013
[vi] http://www.healthcare.gov/glossary/p/payment-bundling.html
[vii] http://www.cnn.com/2013/01/04/health/obamacare-2013
[viii] http://www.cnn.com/2013/01/04/health/obamacare-2013

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  1. isabel jocher

    Relative Obamacare, is it so that starting 1/1/14 all people whose income is in a certain very low bracket (not sure if 130% of FPL?) become automatically elligible for Medicaid? If that were the case, I am wondering if people that get Medicaid that way (but do not qualify for SSI) would have access to the same community programs funded with Medicaid funds as those who get Medicaid through SSI? In essence, the question is, will there be any difference in terms of getting services between Medicaid through SSI or Medicaid through the Obamacare?

    • specialneeds

      Medicaid Waivers are administered through having Medicaid. There is no difference between receiving Medicaid through SSI or through low income.

  2. |

    I’ll immediately grab your rss feed as I can’t find your email subscription hyperlink or newsletter service. Do you’ve any? Please let me know so as that I could subscribe. Thanks.

  3. T1Mom

    I am trying to look at this from both sides. I understand the need for a reformed healthcare system since I work for a family practice.I see the amount of “non covered” people daily. I also have a special needs child. It seems that there is still a “gap” for us. I make too much to get assistance, but barely enough to get by. I now have a cap on flex money to pay for her needed supplies – and will probably end up floating out of pocket another $1000- $2000 a year for diabetic DME , WHICH some things needed , insurance wont even cover. I feel frustated over the whole thing. Do you have any insight, links, or knowledge to shed light on this for me?

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