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Affordability

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Health reform includes new subsidies, rebates and tax credits to make coverage more affordable for individuals and employers.

Addressing Health Insurance Costs

A primary goal of health reform is to make coverage more affordable so more Minnesotans can obtain and keep coverage. Health reform includes new subsidies, rebates and tax credits to make coverage more affordable for individuals and employers. There are also increased efforts to ensure that insurers use premium dollars wisely. Large increases in insurance rates will be reviewed and there will be new efforts to reduce fraud and abuse. Minnesota is also working to slow the growth of health care costs overall, improving health care and coordinating health care services around patients’ specific needs. 

Subsidies  – Beginning in 2014, premium subsidies may be available for families earning up to 400 percent of the federal poverty level to purchase health insurance through an Exchange.

Information on Insurance Rates – Before large rate increases are approved, additional information will be made available to consumers who will be affected. Health reform also limits how much insurance companies can spend on activities other than providing and improving health care. If an insurance company exceeds the limit on administrative or marketing spending, it must provide a rebate to enrollees.

Medicare Part D Prescription Drug Coverage Gap – Health reform will close the prescription drug coverage gap by 2020 through a combination of rebates, prescription drug discounts and reductions in out of pocket expenses.

Efforts to Reduce Fraud and Abuse  – Health reform helps reduce waste in health care by preventing fraud, getting tougher on criminals, and using better data to identify potential fraud.

Early Retiree Reinsurance Program – This was a temporary federal program that assisted employers in providing coverage for early retirees – individuals age 55 and older who are not yet eligible for Medicare.

Small Business Tax Credit  – The small business tax credit was created to help small employers with low- and moderate-income workers to offer health insurance to their employees. 

Addressing Affordability through Quality and Coordination  - Health reform creates new incentives for health care providers to provide better care at a lower cost.

When are the subsidies available?

Subsidies will be available for eligible individuals and families purchasing health insurance through the Minnesota Health Insurance Exchange starting in January 2014.

Am I eligible for the subsidies?

U.S. citizens and legal immigrants who purchase coverage through the Minnesota Health Insurance Exchange and who earn between 138 and 400 percent of the federal poverty level (FPL) will be eligible to receive a tax credit. Those who purchase coverage through an Exchange and earn up to 250 percent of FPL will be eligible to also receive cost-sharing subsidy to reduce copayments and deductibles.

Where can I find information on proposed health insurance rate increases?

Notices will be posted on www.HealthCare.gov and on each insurance company’s website.

How is the prescription drug coverage gap/donut hole closed by 2020?

The schedule below outlines how much Medicare Part D beneficiaries will pay for drugs while in the prescription drug coverage gap from 2012 to 2020.

• 2012: 50% for brand name drugs and 86% for generics
• 2013: 47.5% for brand name drugs and 79% for generics
• 2014: 47.5% for brand name drugs and 72% for generics
• 2015: 45% for brand name drugs and 65% for generics
• 2016: 45% for brand name drugs and 58% for generics
• 2017: 40% for brand name drugs and 51% for generics
• 2018: 35% for brand name drugs and 44% for generics
• 2019: 30% for brand name drugs and 37% for generics
• 2020: 24% for brand name drugs and 25% for generics

Are penalties for fraud increased under health reform?

Yes, health reform increases the federal sentencing guidelines for health care fraud offenses by 20-50% for crimes that involve more than $1 million in losses. The law establishes penalties for obstructing a fraud investigation and makes it easier for the government to recapture funds from fraudulent practices. And the law makes it easier for the Department of Justice (DOJ) to investigate potential fraud or wrongdoing at facilities like nursing homes.