There is a lot of noise about the similarities and differences between the Patient Protection and Affordable Care Act (ACA, or “Obamacare”) and the Massachusetts health care reform act of 2006 (MHCRA, or “Romneycare”). Unfortunately, there is a definite partisan slant to some of these conversations, and by virtue of the fact that these are both “laws” one state and one federal—the language is not that easy to sort out.
As a healthcare marketing agency, marketers and practitioners, we try to keep on top of the changes in the health care landscape. Given the Supreme Court decision to support the ACA, we have made every attempt to stay on top of how this act is going to affect the average consumer of health care services and our clients, the service providers.
First, let’s talk about the similarities between these two laws:
1. Under the ACA, Americans with incomes up to four times the federal poverty level would earn tax credits. The MHCRA provides subsidies for state residents with incomes up to three times the poverty level.
2. The ACA extends Medicaid eligibility to all low-income Americans; the MHCRA extends coverage to low-income Massachusetts residents through federal and state Medicaid. What is not clearly articulated or widely known to consumers is that the state pays for Medicare premiums for many low-income seniors. So while the state is “on the hook” for the premium, the actual cost of providing the care is on Medicare.
3. The ACA eliminates lifetime and annual coverage caps and limits the annual maximum coverage paid by consumers annually; the MHCRA also eliminates annual caps on coverage and limits the maximum amount consumers pay annually. Both laws forbid the retroactive rescinding of coverage.
4. The ACA requires insurers to cover pre-existing conditions; MHCRA requires insurers to cover pre-existing conditions, but has provisions for insurers to limit coverage for certain conditions for up to six months.
5. The ACA increases the number of “free” preventative care programs; MHCRA allows for co-pays, but without a deductible.
6. Contraception is covered under the ACA; the MHCRA does not mention contraception as either included or excluded.
7. The ACA requires employers with 50+ employees to offer insurance or pay a penalty if at least one of their workers receives tax credit to purchase coverage; the MHCRA puts a penalty on employers with more than 11 employees who do not offer coverage.
8. Both laws make investments to improve wellness, prevention, and public health.
9. Both laws have created online resources for small employers to compare plans, options, and save on administrative costs.
10. Both laws have provisions for covering young adults—less than 26 years of age—under their parents health plan; the MHCRA has one exception: young adults who are not living at home or enrolled in college or are on their own for more than two years are excluded.
11. Both laws have provisions for expanding Medicaid for children; the ACA expands Medicaid for adults as well, but sets the cut-off at 133 percent of the federal poverty level.
Now the differences:
1. The ACA’s two main goals are to ensure coverage for everyone in the country and to control the costs of providing health care; the MHCRA is designed to provide coverage for everyone in the state.
2. The ACA reduces the annual Medicare budget by creating incentives for providers to reduce health care costs. Using patient satisfaction scores, performance metrics, and accountability, the burden of providing effective healthcare is shifted onto the provider.
3. The MHCRA does not provide direct incentives nor pay for performance metrics—and, since Medicare is a federal program, the state has little direct control of the program.
The ACA expands the number of uninsured people who would be covered by Medicaid; the MHCRA does not have much of an impact on Medicaid.
4. The ACA requires employers to offer different types of insurance or face penalties; the MHCRA does not require employers to offer different types of plans, although employers with more than 11 employees do face penalties for not providing coverage.
5. The ACA provides tax incentives for individuals to purchase coverage and penalizes those who refuse to participate; the MHCRA puts responsibility on the individual to buy coverage while also creating an employer penalty of $295 per person annually for not providing insurance coverage.
6. The ACA is driven by reducing health care costs; the MHCRA is driven by providing coverage and letting the market dictate costs.
7. The ACA imposes requirements on what is considered to be a “minimum creditable coverage;” the MHCRA requires a “basic” policy to cover hospitalization and catastrophic illness.
8. The ACA provides tax credits for small businesses (those with fewer than 25 full-time workers paid average annual wages below $50,000) if they pay for at least half of their workers’ health insurance. Tax credits start at 35 percent of an employer’s health insurance costs and increase to 50 percent in 2014.
9. The ACA creates a Patient-Centered Outcomes Research Institute to conduct research and provide information about the best available evidence to help patients and their health care providers make more informed decisions; the MHCRA does not have such an institute.
10. The ACA requires Medicare taxes on wages to go up by 0.9 percent and imposes a 3.8 percent tax on investment income for individuals making more than $200,000 per year or couples making more than $250,000 per year, the; the MHCRA has no such provisions.
Massachusetts Department of Revenue, TIR 09-25
Massachusetts Department of Revenue, Health Care Information for Employers
Healthcare.gov, Provisions of the Affordable Care Act, By Year
Massachusetts Health Care Law
Internal Revenue Service, Small Business Health Care Tax Credit for Small Employers
U.S. Government Accountability Office, PCORI Governing Board