HEALTH CARE FINANCING AND NATIONAL HEALTH INSURANCE

The evolution of national health insurance

    National health insurance emerged in Japan as the result of a gradual process that can be traced back to 1905, when the Kamegafuchi Textile Company provided limited benefits for its employees.¹ In the decades that followed, more and more corporations began offering benefits through mutual aid societies. A health insurance law enacted in 1922 was inspired by the German system established by Chancellor Bismarck in 1883. As in Germany, this first law extended health insurance coverage to industrial workers and miners but excluded the self-employed and employees in companies with fewer than five workers.² This law, implemented in 1927, established the practice of mandating coverage by enterprises and created an important government role in the provision of health insurance to those individuals not covered by employers. In 1938, health insurance was extended to farmers, fishermen, foresters and other groups not covered by the 1922 law.

    After World War II, the effort to rebuild Japan gave new impetus to the achievement of universal coverage. In 1958, the 1938 law was revised to include the remaining 30 percent of the population not previously covered. This revision broke the precedent of extending health insurance to occupational groups by calling for universal coverage on the basis of residence. Every government jurisdiction, whether city, town or village, was required to provide health insurance to every uncovered resident by 1961. Since 1961, virtually all Japanese have been covered by either employers or the government.

Health care financing

    Health insurance expenditures in Japan are financed by payroll taxes paid by employers and employees and by income-based premiums paid by the self-employed. In contrast to the United States, where the federal, state and local governments finance roughly 42.9 percent of all health care expenditures and out-of-pocket payments contribute another 22 percent, in Japan, only 31.7 percent of national health care expenditures derive from national and local public funds and 12.2 percent from out-of-pocket payments. The largest share of health care financing in Japan is raised by means of compulsory premiums levied on individual subscribers (34.6 percent) and employers (21.7 percent).³ This employment-based share of health care financing in Japan (56.4 percent) raised by means of voluntary employer, employee and individual subscriber premiums in the United States (Figure 1).

The structure of the national health insurance system

    At first glance, understanding the system seems to be an impossible task. Japan's national health insurance program is made up of some 2,000 private insurers and more than 3,000 units of government. The system can be simplified, however, by distinguishing between two broad groups of beneficiaries (Appendix 2, Figure 1):1) employees and their dependents, including some elderly dependents (65 percent of the population); and 2) the self-employed, unemployed, elderly and their dependents (35 percent of the population).⁴

    Ignoring some administrative complexities and small beneficiary groups, health insurance plans for employees may be categorized into four groups:

1. Government-managed plans - These plans provide coverage for the almost 30 percent of the population comprised of employees (and their dependents) of small enterprises with more than five but fewer than 300 employees. These plans are managed by the government's Social Insurance Agency through a network of some 300 local offices. Premium contributions are set by law at a fixed rate (8.2 percent of monthly income before taxes) and evenly split between employees and employers.
2. Society-managed plans - Known as health insurance societies, more than 1,800 company plans provide coverage for 26 percent of the population. These health insurance societies are managed jointly by representatives of labor and management in enterprises with more than 300 employees. Society-managed plans can be also established by several enterprises employing 3,000 or more employees. Payroll taxes for such plans range from 5.8 to 9.5 percent of gross monthly income.⁵ Employers are required to pay at least half of these contributions, and some pay as much as 80 percent.
3. Mutual aid association (MAA) insurers - Covering almost 10 percent of the population, these include 27 plans for government employees in the national public service, 54 plans for local government employees, and one plan for quasi-public employees like teachers and other school employees. The average payroll contribution of these plans in 8.5 percent of the employee's wage.
4. Plans for day laborers (for those who work less than two months during the year) and seaman - These independent plans cover only 0.1 and 0.4 percent of the population, respectively.

    In addition to the employee groups noted above, employees in enterprises with fewer than five workers, the self-employed and retirees are covered either by municipal governments or by national health insurance societies. Roughly 3,000 municipal governments cover over 90 percent of such self-employed individuals as farmers, shopkeepers, their dependents, and a large number of elderly people on pensions. There are also 166 national health insurance societies that directly manage plans for certain trade and occupational groups such as physicians, lawyers, dentists, food retailers, carpenters, and barbers. Contributions to these national health insurance societies are based on reported income and assets as well as on the number of individuals per household.

    In contrast to health insurance for employees, municipal governments and national health insurance societies receive no direct contributions from employers. Moreover, the self-employed and retirees earn less on average than employees in large enterprises, so the government ends up paying slightly less than 50 percent of their health insurance expenditures - four-twelfths by the national government and one- twelfth each by prefectures and municipalities.⁶ Once the elderly reach the age of 70 (or 65 if bedridden), since they use the lion's share of health care resources but do not pay premiums, under the Health Services System for the Elderly the other half of their expenses are financed by taxes on premium payments to all insurers of employees and the self- employed.

    Most of Japan's health insurance plans are private organizations in terms of administrative law; in practice, they have a quasi-public status insofar as they are largely bound to provide uniform benefits and to cover all eligible beneficiaries. All employers with at least five employees are mandated by law to insure them (along with their dependents). Employers have little freedom to alter premium levels, which range from 5.8 to 9.5 percent of the wage base.⁷ The self- employed are required to contribute premiums to health insurance plans that are administered by local governments or trade associations. And all of these premiums are taxed to finance the national fund which, along with government subsidies, finances national health insurance for the elderly.

The extent and regulation of health insurance benefits

    Health insurance benefits are designed to provide basic medical care to the maximum number of individuals. Although there are exceptions, mandated benefits are similar across the four groups of employee plans and for the self-employed and retirees. They include ambulatory and hospital care, extended care, most dental care and prescription drugs. Not covered are such items as abortion, cosmetic surgery, most traditional medicine (including acupuncture), certain hospital amenities, some high-tech procedures, and childbirth.⁸ Expenses that fall outside the normal boundaries of medical care are either not covered, dealt with on a case-by-case basis, or covered by the welfare system.

    Differences between plans include the level of copayments, the amount of cash benefits, and the extent of cross- subsidization and government subsidies (Appendix 2, Figures 2 and 3). With regard to copayments, all plans for employees have a 10 percent rate for plan members and their dependents, a 20 percent rate for inpatient care, and a 30 percent rate for outpatient care. For the self-employed and their dependents, the copayment rate is 30 percent for both inpatient and outpatient care. For the retired, the copayment rate is 20 percent, and for their dependents, the rate is 20 percent for inpatient care and 30 percent for outpatient care. But under Japan's system of catastrophic health insurance, there is a monthly ceiling for each beneficiary on all copayments for all health insurance plans.⁹ This has limited private insurance to coverage of copayments. There is, however, a small market for supplemental benefits that pay for amenities like private rooms.

    Health insurance plans for employees provide cash benefits for extended sickness and injury and for maternity leave and delivery expenses. National health insurance plans for the self- employed and retirees provide cash benefits for midwifery and general expenses. Cash benefits can be substantial. Nearly $2,400 is provided to cover child delivery expenses under most employee plans, for example.¹⁰ If the mother is the primary beneficiary, the cash benefit may be 50 percent of her monthly salary. Maternity leave amounts to 100 days and is compensated at 50 percent of a mother's salary in the case of working women. In the event of prolonged sickness or disability, an individual collects 60 percent of monthly remuneration for 18 months.

    Society-managed plans provide more extensive benefits in kind. In addition to providing the cash benefits noted above, 74 percent of these plans also have a "patient cost-sharing restoration" program which picks up a portion of the mandatory 10 percent copayment.¹¹ Society-managed plans are also actively involved in health screening and promotion. Enterprises own and operate more than 3,500 sanitoriums, 1,000 gymnasiums and 300 health centers, for example.¹²

    There is thus a widely held perception that employees of large corporations covered under society-managed plans are getting a "better deal." There is no evidence that these beneficiaries enjoy better health status, however. As John Campbell noted at the Japan Society conference, among all plans, individuals enrolled in society- managed plans receive the least value back for what they pay. For every dollar paid in premium contributions, only 62 cents is received in health insurance benefits. The beneficiaries of government-managed plans receive 84 cents in benefits for every dollar of premiums paid, the self-employed receive $1.66, and retirees receive $4 to $5.¹³

Government subsidies and cross-subsidization between plans

   Age and income disparities among health insurance plans result in an unequal distribution of health risks. Plans that insure beneficiaries who are older or in higher risk occupational groups will incur higher costs and therefore often generate deficits. Given the Japanese commitment to equity, these inequalities are reduced through government subsidies and cross-subsidization between plans.

    With the exception of mutual aid associations for government employees, all insurance plans receive some form of government subsidy. Even society-managed plans, for example, receive government funds (Y4.85 billion in 1992) to defray their administrative costs. Likewise, government subsidies financed 50 percent of the benefit payments to self-employed individuals covered by national health insurance (Appendix 2, Figure 3).

    Cross-subsidization supports the poorer plans. As noted above, the most generous example is the national pool created as part of the Health and Medical Service Law for the Aged of 1983. Government (national and local) provides 30 percent of this special fund, and local governments another 20 percent. The remaining 70 percent comes from other insurance plans based upon the total enrollment of retirees in each fund.¹⁴ As a percentage of their total expenditures, government- managed plans, society-managed plans and national health insurance plans contribute 15.4, 20.4 and 24.2 percent, respectively.¹⁵

Provider reimbursement

    Under Japanese national health insurance, all insurance plans pay health care providers low fees by American standards (Table 3). The fees must conform to a uniform national fee schedule known as the point-fee system. For any particular service, the same fee is paid by all insurers to all providers. As in Canada or Germany, there is no "extra-billing": neither physicians nor hospitals may bill their patients more than the authorized fee; but illegal side-payments are common and condoned. All covered medical procedures are ranked by complexity, and neither geographic location, the institutional setting (e.g., type of hospital or ambulatory care), the qualification of the provider, nor the actual cost of the service are considered in this rating system.¹⁶

    Medical procedures are assigned a number of points, each of which is worth 10 yen.¹⁷ Only the basic charges for hospital room and board services are covered; the costs for additional hotel amenities are not covered.¹⁸ The fee covers all supplies, materials, capital depreciation and personnel costs. There is no flexibility in this system of price controls for insurers or for providers. Hospitals can bill patients extra only for room and board and a restricted number of specialized services, for example.¹⁹ As John Campbell noted at the conference, "cheap stuff is profitable and expensive stuff is unprofitable. A doctor who sees a few extra patients and prescribes drugs for them makes money; coronary bypass surgery at an urban hospital loses money."

     The Ministry of Health and Welfare sets the fee schedule. Its Central Social Medical Care Council has 20 members who represent a cross section of health care interests: eight providers (five physicians, two dentists, and one pharmacist), eight payers (four insurers, including government representatives, two employers and two labor representatives), and four public interest representatives (three economists and one lawyer).²⁰ Every other year, this council renegotiates the fee schedule with the medical profession, but these negotiations are constrained by a rate cap set by the Ministry to limit the overall increase in costs. This rate cap results in an effective, if implicit, global budget for all health care expenditures.

HEALTH CARE RESOURCES AND UTILIZATION

Japan has 15.8 inpatient hospital beds per 1,000 persons, the highest number among OECD countries and more than three times the American ratio (Table 1). By contrast, with 1.6 physicians per 1,000 population, Japan has the fifth lowest physician-per-person ratio, 43 percent less than the American rate of 2.3 per 1,000 (Table 1). Japan also has one-half to one-third the American number of intensive care beds per capita (Table 1). And Japan is tied with Austria for the lowest hospital staffing ratio (that is, the number of employees per bed) among OECD countries (Appendix 1, Table 3).

    As for the use of these resources, at 8.3 percent, Japan admits a smaller proportion of its population to hospitals every year than any other OECD country except Turkey, a rate barely over one-half that of the United States (Table 1). On the other hand, of all OECD countries, at 50.5 days, Japan has the longest average length of stay for inpatient hospital services, more than five times that of the United States (Table 1).

    Although Japan has one of the lowest physician-to-population ratios among OECD countries (Appendix 1, Table 3), at 12.9, Japanese doctors have the highest number of physician contacts per capita, more than twice the American rate . It must be noted, (Table 1) however, that the average length of a physician visit in Japan is only 6.9 minutes, compared to over 20 minutes in the United States.¹

    To the extent that OECD data are available on hospital admission rates for selected procedures, with the exception of appendectomies, Japan's rates are lower than those in the United States (Table 2).² Comparative survey data indicate that surgeons in Japan perform fewer than one-fourth the number of operations per capita that their colleagues in the United States do (Table 1).³ This pattern is supported by findings on cesarean section rates, which are half as frequent in Japan as in the United States.⁴ The United States is known abroad for its unusually high cesarean section rate.

    It would be wrong to conclude from these data that Japan rations high-tech medical care. On the contrary, among OECD countries, Japan has the highest number of computerized axial tomography (CT) scanners per capita, the highest number of extra-corporal shock wave lithotriptors per capita, and the highest number of patients per million treated for end-stage renal disease failure.⁵ In addition, Japanese spend more than any other nation on drugs as a percent of total health expenditures, more than twice the American rate.⁶

    Japanese doctors' clear preference for non-invasive procedures is demonstrated by the kinds of medical technologies imported and exported. Equipment requiring invasive operations (e.g., pacemakers and artfficial heart valves) is almost all imported, whereas diagnostic equipment (e.g., CT scanners) is produced in Japan and exported in large quantities.⁷

    In contrast to the United States, Japan's low rate of hospital admissions (Table 1) reflects its tendency to emphasize ambulatory over inpatient hospital care.⁸ But once hospitalization occurs, as we have seen, Japan holds the OECD record for long lengths of stay and low hospital staffing ratios (Appendix 1, Tables 3 and 4). This is encouraged by a reimbursement system that pays hospitals on a per diem basis and a style of medical practice that emphasizes bed rest and complete recovery while a patient is still in the hospital.

    Beyond these more measurable differences in resource availability and use of medical care in Japan and United States, there are a host of political-institutional and cultural factors that reinforce each health care system's distinctiveness. The United States is a federal system whose 50 states have significant autonomy on matters of health insurance and public health policies. Although the federal government exercises a dominant role over the Medicare program and regulatory aspects of health policy, Americans are multiethnic, suspicious of excessive governmental authority and inclined to solve social problems at the local level. Japan is a centralized, unitary state with a highly homogeneous population and a tradition of powerful state intervention in the economy, including its many health insurance plans.

NOTES:
    ¹Okamitsu (1993).
    ²McPherson (1989).
    ³Ikegami (1992).
    ⁴Notzon, Placek and Taffel (1987).
    ⁵Yoshikawa et al. (1992). In Japan in 1991, there were 945 patients per million treated for end stage renal disease failure in contrast to 784 in the United States (OECD Health data file, 1993).
    ⁶lglehart (1988) reports that in 1981 reimbursement for drugs by Japanese health insurance was equal to 38.7 percent of all health expenditures and that in 1987 this figure dropped to 28 percent. More recent data from OECD Health Systems: Facts and Trends (Paris: OECD, 1992) indicate that this figure has dropped to 18.4 percent, in contrast to the U.S. figure of 8.3 percent. However, these data exclude pharmaceutical expenditures for inpatients, which are substantial. Ikegami (1990) reports that "about 30 percent of Japan's personal health expenditures are for drugs," which we assume include inpatient drugs, and supports the contention that the Japanese are among the highest spenders on drugs.
    In terms of pharmaceutical expenditures per capita, in U.S. dollar pharmaceutical purchasing power parities, Japanese spent $332 per capita, Americans $182. However, if these expenditure data are adjusted by GDP purchasing power parities, the difference narrows: $179 for Japan, $182 for the United States.
    ⁷Ikegami (1989).
    ⁸Ikegami (1992a).

  

Table 1 Comparisons of the United States and Japanese Health Systems (1990)
	U.S	Japan
Health Status
Life Expectancy at Birth
Males	72.00	75.90
Females	78.80	81.90
Infant Mortality Rate	9.10	4.60
Life Expectancy at 80
Males	7.10	6.90
Females	9.00	8.70
Expenditures
Per Capita Health Spending1	$2,867	$1,267
Total Health Expenditures as % of GDP2	13.40	6.60
Resources
Active physicians per 1,000	2.3	1.6
Inpatient hospital beds per 1,000	4.70	15.8
Hospital staffing ratios3	3.35	.79
Intensive care unit beds per million4	244.50	79.20
Coronary care unit beds per million4	46.30	17.80
Neonatal intensive care unit beds per million4	44.70	22.40
Medical Care Use
Physician visits per capita5	5.30	12.90
Hospital admissions as % of population	13.70	8.30
Average length of hospital stay	9.10	50.50
Inpatient days per capita6	1.20	4.10
Number of surgical operations per 10007	91.0	22
Source:OECD Health Data (CREDES), 1993 1. These figures are in $U.S. price purchasing parities for 1991. 2. 1991 3. Non-medical staff per bed. 4.Woodward and Asano, 1991. U.S. data from the American Hospital Association, U.S. ICUs and CCUs Table 13. Japanese data, from 1987, are from the Health and Welfare Statistics Association, 1989. 5. 1988 6. 1991 7. Surgical operation rates are based on survey data. For Japan they are from a patient survey done by the Ministry of Health and Welfare. For the U.S., they are from the 1986 Annual Survey of the American

  

Table 2 Admission Rates for Selected Procedures (1980)* Number of Admissions per 1,000 Population
	U.S	Japan
Tonsillectomy	205	61
Coronary Bypass	61	1
Cholecystectomy	203	2
Inguinal Hernia Repair	238	67
Exploratory Laporotomy	41	-
Prostatectomy	308	-
Hysterectomy	557	90
Operation on lens	294	35
Appendectomy	130	244
Renal dialysis1	784	945
Adapted from K. McPherson, "International Differences in Medical Care Practices," (Health Care Financing Review, 1989, Annual Supplement). * These figures are not age standardized and assume equal proportions of men and women. Some are likely to be incomparable for artifactual reasons. Source: OECD Health Data File, 1989. 1. These data for 1991, not based on hospital admission rates, are from the OECD Health Data File, 1993. These rates are per 1 million population.

Japan's health care

 Japan's health care system is characterized by universal coverage, free choice of health care providers by patients, a multi-payer, employment-based system of financing, and a predominant role for private hospitals and fee-for-service practice. Virtually all residents of Japan are covered without regard to any medical problems they may have (so-called predisposing conditions) or to their actuarial risk of succumbing to illness. Premiums are based on income and ability to pay. Although there is strong government regulation of health care financing and the operation of health insurance, control of the delivery of care is left largely to medical professionals and there appears to be no public concern about health care rationing.

    Like the Australian, Canadian and many European health care systems, Japan's national health insurance program is compulsory. But Japan surpasses all 24 member countries of the Organization for Economic Cooperation and Development (OECD) in life expectancy at birth and also has the lowest infant mortality rate (Appendix 1, Table 1).¹ It achieves these successes at a cost of only 6.6 percent of gross domestic product, $1,267 per capita - half that of the United States (Table 1) .

    Japanese-style national health insurance raises a fascinating question: how has Japan reduced financial barriers of access to medical care and achieved a No. 1 ranking on health status at a cost that is among the lowest of wealthy industrialized nations?² In addressing this question, we begin with a comparative analysis of health care resources and the use of medical care in Japan, the United States and other OECD countries. Next, we review the financing and organization of medical care in Japan, evaluate some strengths and weaknesses of the health care system, and explore possible lessons for health care reform in the United States.

     In adopting this comparative approach to health care reform in the United States, we have relied on an extensive review of the English-language literature on Japan's health care system and on information presented at the Japan Society's April 30 conference, "Making Universal Health Care Affordable: How Japan Does It."³ We do not presume to have analyzed Japan's health care system in depth. For example, we remain intrigued by Japan's exemplary health status and by such societal values and traditions as egalitarianism and consensus- building upon which the health system is built. We have aimed, in earnest, to raise more questions than we are able to answer. We hope that these questions may lend a sense of perspective to the on-going public debate on health care reform in the United States.

NOTES:
¹For comparisons between Japan and the other OECD countries, see the Tables in Appendix 1.
²This is a reference to Vogel's (1979) classic book, Japan as Number One: Lessons for America. (Cambridge: Harvard University Press).
³We also refer the reader to a previous monograph on health and medicine in Japan and America based on a conference organized by the Japan Society in 1978 (Reich and Kao, 1978).

 

Lesotho's ailing public health system

Affordable healthcare is is becoming scarce in Lesotho, where patients vie for drugs and go long distances to see a doctor

Matebello Makhanya left her village of Ramabanta early in the morning and travelled 60km to Maseru, Lesotho's capital, in the hope of seeing a dentist at Queen Elizabeth II Hospital – the largest in the country – only to be told that it was about to be closed and dental services were no longer provided there.

"I am very disappointed," she said from a queue outside a small private clinic in the city centre, explaining that initially she had been referred by her local clinic to a hospital about 20km away. "Upon arriving at that hospital, I was told that there is no dental anaesthesia and that the dentist is on leave."

Makhanya's story is echoed by many patients who have resorted to private clinics and pharmacies after struggling to be seen at both government health facilities and those run by the Christian Health Association of Lesotho (Chal), an organisation made up of six different churches that provides 40% of healthcare in the country.

Thabo was forced to go to a private doctor after failing to get drugs or a medical examination at either government or Chal health centres in Maseru. "I went to the government clinic because I was going to pay only 15 maloti ($2.14) but now I have to cough up 120 ($17.14)," he said.

Health centres under strain

In 2007, the government of Lesotho and Chal, which runs 75 health centres and eight hospitals – many of them in rural areas where government health workers are reluctant to work – signed a memorandum of understanding with the aim of making health services more accessible to ordinary Basotho who could not afford even the nominal fees that state and Chal-run health facilities charged. Patients would now get free medical services and drugs at health centres, and subsidised medical care and drugs at hospitals.

However, the resulting influx of patients put a huge strain on health centres and their supply of drugs, and many over-burdened government and Chal health centres have taken to referring patients to private clinics and pharmacies.

The head of pharmacy at the ministry of health and social welfare, Masoko Nt'sekhe, described the situation as "very unfortunate", particularly in the context of a country where about 60% of the population live below the poverty line. However, she insisted that she had received no official reports of drug shortages in hospitals. She added that late ordering of drugs and poor budgeting were more often to blame for shortages than a lack of funds, and that running out of stock was more likely to occur in Chal-run health facilities where the government had no direct control.

Nevertheless, an official at Chal's headquarters in Maseru, who declined to be named, said government hospitals were experiencing drug shortages and that most of the funding her organisation received from the government was spent on salaries and operating costs, leaving little to buy drugs and other medical supplies. Chal relies on the government to make up 80% of its annual budget, with the remaining 20% coming from its six member churches, but according to the official, requests for payment were sometimes ignored.

Nt'sekhe said Lesotho's financial crisis – the result of the global economic slowdown and a sharp decline in crucial revenue from the Southern African Customs Union (Sacu) – had not affected public health services in any way. In fact, while other government ministries have faced budget cuts, the ministry of health and social welfare received a small increase in the 2011-12 financial year and new posts have been created to employ more nurses and pharmacists.

Closure sparks protests

The closure of Queen Elizabeth II Hospital in October is likely to further stretch services at the country's remaining hospitals, although Mateboho Mosebekoa, a public relations officer with the ministry of health and social welfare, denied rumours that patients would be sent home to be cared for by their relatives. She said those needing in-patient care would either be transferred to T'sepong Hospital, a new referral facility outside Maseru's city centre, or to other district hospitals. "Only fully recovered patients will be discharged," she said.

However, unlike the new referral hospital, Queen Elizabeth II served many outpatients and its closure has sparked protests among city residents who worry it will contribute to the gap in affordable health services.

Poor Basotho in rural areas have been the hardest hit by the decline in affordable health services. Mpho Makhobalo, 22, said the local Chal clinic in her village of Nazareth, 43km from Maseru, had become little more than a place for patients living with HIV to collect their antiretroviral drugs. "It no longer qualifies as a clinic," she said. "The nurses who work there only tell those patients who are their friends when drugs are available and when other people go there they are told that the drugs are finished."

A private clinic and pharmacy have opened in one of the area's abandoned buildings in response to the demand for drugs, and some local residents are selling medications from their homes.

Affordable Health Services, Innovative and Best Practices

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The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

Conclusion: To work in partnership with communities and health systems, building effective and replicable solutions, empowering women and their families in urban slums to improve their health

The Affordable Care Act In US

On March 23, 2010, President Obama signed the Affordable Care Act. The law puts in place comprehensive health insurance reforms that will roll out over four years and beyond, with most changes taking place by 2014. Others have already begun. Use this timeline to learn about what’s changing and when.

 

Up to 4 million small businesses are eligible for tax credits to help them provide insurance benefits to their workers. The first phase of this provision provides a credit worth up to 35% of the employer’s contribution to the employees’ health insurance. Small non-profit organizations may receive up to a 25% credit.
 

States will be able to receive federal matching funds for covering some additional low-income individuals and families under Medicaid for whom federal funds were not previously available. This will make it easier for states that choose to do so to cover more of their residents.

Current efforts to fight fraud have returned more than $2.5 billion to the Medicare Trust Fund in FY 2009 alone. The new law invests new resources and requires new screening procedures for health care providers to boost these efforts and reduce fraud and waste in Medicare, Medicaid, and CHIP.

Too often, Americans who retire without employer-sponsored insurance and before they are eligible for Medicare see their life savings disappear because of high rates in the individual market. To preserve employer coverage for early retirees until more affordable coverage is available through the new Exchanges by 2014, the new law creates a $5 billion program to provide needed financial help for employment-based plans to continue to provide valuable coverage to people who retire between the ages of 55 and 65, as well as their spouses and dependents.

 

A Pre-Existing Condition Insurance Plan (PCIP) provides new coverage options to individuals who have been uninsured for at least six months because of a pre-existing condition. States have the option of running this new program in their state. If a state has chosen not to do so, a plan has been established by the Department of Health and Human Services in that state. This program serves as a bridge to 2014, when all discrimination against pre-existing conditions will be prohibited

Under the new law, young adults are allowed to stay on their parent’s plan until they turn 26 years old. (In the case of existing group health plans, this right does not apply if the young adult is offered insurance at work.) Check with your insurance company or employer to see if you qualify.

Under the new law, insurance companies are prohibited from imposing lifetime dollar limits on essential benefits, like hospital stays. Under the new law, insurance companies’ use of annual dollar limits on the amount of insurance coverage a patient may receive is restricted for new plans in the individual market and all group plans. In 2014, the use of annual dollar limits on essential benefits like hospital stays will be banned for new plans in the individual market and all group plans

 

The law allows states that have, or plan to implement, measures that require insurance companies to justify their premium increases to be eligible for $250 million in new grants. Insurance companies with excessive or unjustified premium increases may not be able to participate in the new Affordable Insurance Exchanges in 2014.

To strengthen the availability of primary care, there are new incentives in the law to expand the number of primary care doctors, nurses and physician assistants, including funding for scholarships and loan repayments for primary care doctors and nurses working in underserved areas.  Doctors and nurses receiving payments made under any state loan repayment or loan forgiveness program intended to increase the availability of health care services in underserved or health professional shortage areas will not have to pay taxes on those payments.

Trade barriers should not prevent affordable health services

From K J M Varma Beijing, Jul 11 (PTI) India today cautioned against moves to enforce Intellectual Property Rights (IPR) with the proposed anti-counterfeiting task force (ACTA), saying trade barriers should not prevent "equitable and affordable" public health services."We must guard against the enforcement of IPR through the proposed ACTA which will deter generic competition. We cannot, therefore, let trade barriers and concerns for individual profiteering stand in the way of equitable and affordable public health services," Health Minister Ghulam Nabi Azad said while addressing the BRICS meeting in China's northern port city of Tianjin city."ACTA negates the flexibilities available to the countries under the TRIPS with respect to IPRs," Azad said, adding, "International agreements that interfere with the use of TRIPs flexibilities by BRICS nations and require TRIPS-Plus and other measures must therefore be resisted." Meanwhile, the BRICS (Brazil, India, China, Russia and South Africa) nations vowed to improve access to low-cost and high-quality medicine.BRICS health ministers, who met for the first time, expressed their commitment to work with with international groups such as the WHO and UNAIDS to provide "affordable, safe and effective technologies"."We are committed to continue to collaborate in order to advance access to public health services and... support other countries in their efforts to promote health for all," the grouping said in a statement.The five emerging countries together account for more than 40 per cent of the world's population.