Editor’s Note: Dr. Aaron E. Carroll is an associate professor of pediatrics at the Indiana University School of Medicine and the director of the university’s Center for Health Policy and Professionalism Research. He blogs about health policy at The Incidental Economist and tweets at @aaronecarroll.
Aaron Carroll: Next year will be in preparation for 2014 when Affordable Care Act kicks in
Carroll: Most states will probably commit to participating in the Medicaid expansion
He says forming health insurance exchanges will take a lot of work to get ready
Carroll: Expect the costs of health care to continue getting a lot of attention
There’s a lot that will happen in 2013 with respect to health care, but the truth of the matter is that most of it will be in preparation for 2014. That’s the year the Affordable Care Act really kicks into effect. Here are my guesses for what to watch in 2013:
1. The Medicaid expansion
Much of this year’s election was fought over whether Medicaid should be cut. Now the big decision is how much Medicaid will be expanded. About half of the uninsured who hope for coverage under the Affordable Care Act will do so under Medicaid, an estimated 16 million to 17 million people. But June’s Supreme Court ruling made the expansion optional, and states get to decide if they will participate. At last count, 17 states have said yes, and nine have said no. The rest will need to commit in 2013. My guess is that most will. The Obama administration has decided to play hardball, and leaving that money on the table will be met with screams by the uninsured and providers alike.
2. Medicaid provider payments
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These are going up. Way up. Part of the Affordable Care Act makes Medicaid payments to physicians look more like Medicare payments. There is such a difference that many physicians will see fees for primary care services go up by 73%. Physicians will be thrilled. Those who think Medicaid costs too much already will not.
3. The health insurance exchanges
In 2014, the other half of the uninsured will need to go to the health insurance exchanges to get their insurance. These are tightly regulated marketplaces where individuals will be able to get community-rated insurance and can’t be turned down even if they have chronic conditions. People who make between 133% and 400% of the federal poverty line will get subsidies in the form of tax credits to help defer the cost.
But many states are choosing not to form local exchanges, leaving it to the federal government. For those states that opt for exchanges, there’s a ton of work to do next year to get them ready to go. The federal government will be responsible for all the states that are opting out, and it has even more work to do. Expect a lot of news on their development. October 1, 2013, is the date they’re all supposed to go live.
4. Medicare taxes
Taxes are going up. Right now, employees pay a tax of 1.45% for Medicare (employers pay an equal amount). Starting next year, for couples making more than $250,000 that tax will go up by 0.9% on income above the threshold. Additionally, investment income will also be taxed at 3.8% for people above the threshold. This is the first time that unearned income will be subject to a Medicare tax.
5. Medicare reform
This got a lot of attention in the election, and in the first few rounds of fiscal cliff negotiations. Talk of raising the eligibility age is dead for now, and discussions of turning Medicare into a voucher program are in the dustbin of history as well. I don’t think that any huge changes will happen on this front, short of those already put in place by the Affordable Care Act and quietly re-embraced by Republicans post-election. The Obama administration has proposed some new cuts, but almost none of those will affect 2013.
6. Insurance transparency
A small but important benefit of the Affordable Care Act will start in 2013. From now on, insurance companies are mandated to describe all plans in easy-to-understand English in a standardized format. Here’s a sample (PDF). This will make things easier for many people, although insurance policies will still be hard to understand.
7. Health care spending
Although many believe that health care costs will rise more slowly in 2013, at about 3.8%, we will still be spending $2.9 trillion. That’s a lot of money. As we continue to fight over the budget deficit and the debt, expect the costs of health care to continue getting a lot of attention.
That should account for most of the excitement next year. Whether I’m right or wrong, we’ll be covering it here on CNN.com.
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The opinions expressed in this commentary are solely those of Aaron E. Carroll.