The Supreme Court ruling largely upheld the Affordable Care Act, which will overhaul the U.S. healthcare system and affect consumers and business, including senior living providers, in a variety of ways. The creation of accountable care organizations (ACO), new employer penalties, as well as changes to the Medicaid program may significantly affect the way business is done in the coming years.
Employer Penalties and Tax Credits
According to reports, starting in 2014, the healthcare law requires employers with more than 50 workers to provide a health care plan that covers 60 percent of the covered health care expenses for a typical population and costs no more than 9.5% of employee income. If the employer chooses not to provide affordable health insurance that meets these requirements, it will be forced to pay a penalty.
Small employers, those with fewer than 50 employees, however are exempt from new employer responsibility policies. Employers with fewer than 25 full-time employees with average annual wages of less than $50,000 may be eligible for a tax credit if they choose to purchase health insurance for their employees. View this flow chart to see if your company will need to pay a penalty.
Accountable Care Organizations
CMS recently announced the creation of 89 Accountable Care Organizations. These new ACOs will participate in the Medicare Share Saving Program, which was included in the Affordable Care Act along with other initiatives relating to accountable care organizations. The goal of these ACOs will be to achieve Medicare cost savings and higher quality care by better coordinating health care. Senior living providers cannot officially join accountable care organizations, but the new incentives for hospitals and other healthcare providers may allow for senior living communities to engage in meaningful partnerships. Health care providers in ACOs have a greater stake in cost savings and long term outcomes of their patients, which offers an opportunity for senior living providers to educate hospitals about their affordability and ability to reduce readmissions.
Medicaid Expansion and Cuts
The Medicaid provision in the Affordable Care Act would allow everyone earning up to 133 percent of the poverty line to be eligible for Medicaid. The federal government would cover the costs of the influx of newly eligible Medicaid enrollees for the first three years, and ninety percent of the increased costs after 2020. Given the Supreme Court ruling, states can opt out of the Medicaid expansion provision and some states are using the ruling as support to cut existing Medicaid programs beyond national requirements. Maine, for example, is preparing a legal argument to reduce Medicaid eligibility, halting coverage for over 20,000 Medicaid recipients in the state. Maine will likely be the first to test whether the ruling justifies further cuts, but states like New Jersey, Wisconsin, Alabama, and Indiana also have hinted that they may challenge the national Medicaid requirements.
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