Healthcare Reform Implementations Starting in 2013


This past June the Supreme Court made their decision regarding the Affordable Care Act, three months later President Barack Obama was re-elected by a very large margin, which solidified the Implementation of the Affordable Care Act. While the implementation of core pieces of the Affordable Care Act and Health Care Reform were already set in motion starting in 2010, here is a comprehensive list of what you can expect in 2013.


Healthcare Reform: Private Exchange, October 2013

  • Starting in October 2013 individuals who do not have health insurance through their employers should be able to take part in the Health Insurance Exchange. There are a small list of states that have already setup their exchanges, and others are coming onboard. States that decided not to setup an exchange will have their residents partake in the federal exchange. This will be the first time in history where a Private Health Insurance Exchange is setup. The open enrollment will start in October 2013, and the plans will be effective January 1, 2014.

Healthcare Reform: Medicare, January 2013

  • In order to reduce the cost for out of pocket beneficiaries, there will be a phase out of federal subsidies for brand-name prescription drugs. The Co-pay from insurance will decrease from 100% of cost. The goal is to arrive at 25% of the cost by 2020. A discount of up to 50% will be provided to all drugs that are part of the Part-D covered prescriptions.
  • The Tax rate will increase from 1.45% to 2.35% on individuals earning $200K, and couples earning over $250K for Medicare Part A
  • The DSH, which is known as the Disproportionate share hospital payments, an annual allotment each state pass on to hospitals that serves a number of low income patients and Medicaid patients will now fall by 75% starting in January 2013. Future payments after January 2013 maybe increased based on the number of uninsured, and low income patient a hospital serves, as well as the amount of services performed that are not paid for.

Healthcare Reform: Medicaid, January 2013

  • States working on Medical Expansion, and State run health insurance exchange will have to provide an implementation plan to the department of HHS.
  • States that offer Medicaid coverage for patients with no patient cost will receive an increase of 1% Match for preventative service care. The list of preventative services is the list recommended by the US Preventative Service Task Force.
  • Children Health Insurance Program (CHIP) funding authorization will be extended from 2013 to 2015.

Healthcare Reform: Taxes, January 2013

  • The itemized tax deduction for medical expenses that were original set at 7.5% of AGI (Adjusted Gross Income) will now increase to 10%. This increase is waived for those individuals that will be 65 or older between January 2013, and 2016
  • The Medical Device tax will now be imposed on medical device importers and manufactures. The excise tax is slated to be at 2.3%
  • The Medicare part D drug subsidies that companies receive for retired employees who receive Medicare Part D Drugs will be completely eliminated.

Healthcare Reform: Employer Benefits (Flexible Spending Accounts), January 2013

  • Pre-tax deductions made by employees to their Flexible Spending Accounts to cover medical expenses will be maxed at $2500 compared to the current unlimited limit. The use it or lose it stipulation will still remain. If the contribution to the FSA accounts is not used by March following the contribution year, the employee will loose those funds.

Healthcare Reform: Business Tax Penalty, January 2013

  • Companies and small business that fail to withhold a sufficient amount of Medicare payroll tax for their employees will not be penalized.
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