Government and Regulations

Affordable Care Act Latest in Half-Century of Healthcare Reform


Initial Efforts


• President Lyndon B. Johnson signs the Social Security Act, which authorizes both Medicare and Medicaid; the law is widely labeled the biggest healthcare reform of the past century.


• President Bill Clinton attempts to craft universal healthcare legislation that includes both individual and employer mandates. He appoints his wife, Hillary Rodham Clinton, as chair of the White House Task Force on Health Reform. The President’s Health Security Act ultimately fails in Congress.


• State Children’s Health Insurance Program (S-CHIP) authorized by Congress, covering low-income children in families above Medicaid eligibility levels.


• Massachusetts (followed by Vermont in 2011) passes legislation that expands healthcare coverage to nearly all state residents; the Massachusetts law is later deemed a template for the Patient Protection and Affordable Care Act of 2010.

The Patient Protection and Affordable Care Act (ACA)

March 23, 2010

• President Obama signs the ACA into law. Among the law’s early provisions: Medicare beneficiaries who reach the Part D drug coverage gap begin receiving $250 rebates, and the IRS begins allowing tax credits to small employers that offer health insurance to their employees.

July 1, 2010

• Federal government begins enrolling patients with pre-existing conditions in a temporary Pre-Existing Condition Insurance Plan (PCIP).

• website debuts.

• IRS begins assessing 10% tax on indoor tanning.

Sep. 23, 2010

• Patient-Centered Outcomes Research Institute (PCORI) launches with 21-member board of directors.

• For new insurance plans or those renewed on or after this date, parents are allowed to keep adult children on their health policies until they turn 26 (many private plans voluntarily offered this option earlier).

• HHS bans insurers from imposing lifetime coverage limits and from denying health coverage to children with pre-existing conditions or excluding specific conditions from coverage.

• HHS requires new and renewing health plans to eliminate cost sharing for certain preventive services recommended by U.S. Preventive Services Task Force.

Sep. 30, 2010

• U.S. Comptroller General appoints 15 members to National Health Care Workforce Commission (commission does not secure funding).

December 30, 2010

• Medicare debuts first phase of Physician Compare website.

Jan. 1, 2011

• CMS begins closing Medicare Part D drug coverage gap.

• Medicare begins paying 10% bonus for primary care services (funded through 2015).

• Center for Medicare and Medicaid Innovation debuts, with a focus on testing new payment and care delivery systems.

March 23, 2011

• HHS begins providing grants to individual states to help set up health insurance exchanges.

July 1, 2011

• CMS stops paying for Medicaid services related to specific hospital-acquired infections.

Oct. 1, 2011

• Fifteen-member Independent Payment Advisory Board is formally established (but no members are nominated). The IPAB is charged with issuing legislative recommendations to lower Medicare spending growth, but only if projected costs exceed a certain threshold.

Jan. 1, 2012

• CMS launches Medicaid bundled-payment demonstration and Accountable Care Organization (ACO) incentive program.

• CMS reduces Medicare Advantage rebates but offers bonuses to high-quality plans.

Aug. 1, 2012

• HHS requires most new and renewing health plans to eliminate cost sharing for women’s preventive health services, including contraception.

Oct. 1, 2012

• CMS begins its Value-Based Purchasing (VBP) Program in Medicare, starting with a 1% withholding in FY2013.

• CMS begins reducing Medicare payments based on excess hospital readmissions, starting with a 1% penalty in FY2013.

Jan. 1, 2013

• CMS starts five-year bundled payment pilot program for Medicare, covering 10 conditions.

• CMS increases Medicaid payments for primary care services to 100% of Medicare’s rate (funded for two years).

• IRS increases Medicare tax rate to 2.35% on individuals earning more than $200,000 and on married couples earning more than $250,000; also imposes 3.8% tax on unearned income among high-income taxpayers.

• IRS begins assessing excise tax of 2.3% on sale of taxable medical devices.

Jan. 2, 2013

• Sequestration results in across-the-board cuts of 2% in Medicare reimbursements.

July 1, 2013

• DHS officially launches Consumer Operated and Oriented Plan (CO-OP) to encourage growth of nonprofit health insurers (roughly $2 billion in loans given to co-ops in 23 states by end of 2012).

Oct. 1, 2013

• Open enrollment begins for state- and federal government-run health insurance exchanges and expanded Medicaid; the rollout is marred by multiple computer glitches.

• CMS lowers Medicare Disproportionate Share Hospital (DSH) payments by 75%, starting in FY2014 but plans to supplement these payments based on each hospital’s share of uncompensated care.

• CMS lowers Medicaid DSH payments by $22 billion over 10 years, beginning with $500 million reduction in FY2014.

Jan. 1, 2014

• Coverage begins through health insurance exchanges. Individuals and families with incomes between 100% and 400% of the federal poverty level can receive subsidies to help pay for premiums.

• Voluntary Medicaid expansions expected to take place in roughly half of all states, for individuals up to 138% of the federal poverty level.

• Insurers banned from imposing annual limits on coverage, from restricting coverage due to pre-existing conditions, and from basing premiums on gender.

• Insurers required to cover 10 “essential health benefits,” including medication and maternity care.

March 31, 2014

• Open enrollment closes for health insurance exchanges; under the “individual mandate,” people who qualify but don’t buy insurance by this date will be penalized up to 1% of income (penalty increases in subsequent years).

Oct. 1, 2014

• CMS imposes 1% reduction in payments to hospitals with excess hospital-acquired conditions (FY2015).

• CMS imposes penalties on hospitals that haven’t met electronic health record (EHR) meaningful use requirements.

Jan. 1, 2015

• Employer Shared Responsibility Payment, or the “employer mandate,” begins (delayed from Jan. 1, 2014). With a few exceptions, employers with more than 50 employees must offer coverage or pay a fine.

• CMS begins imposing fines based on doctors who didn’t meet Physician Quality Reporting System requirements during 2013, with an initial 1.5% penalty that rises to 2% in 2016.

Jan. 1, 2018

• High-cost, or so-called “Cadillac,” insurance plans—those with premiums over $10,200 for individuals or $27,500 for family coverage—will be assessed an excise tax.

Sources:, Commonwealth Fund, Kaiser Family Foundation, American Medical Association, Greater New York Hospital Association.

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