ACA provision could signal sobering start to 2013

In January, 10 of 15 Affordable Care Act (ACA) provisions will take effect for 2013. Compiled by the Henry J. Kaiser Family Foundation, here's a snapshot of the key provisions of 2013.

Launch of Medicare bundled payment pilot. The national Medicare pilot program will evaluate bundled payments for acute inpatient hospital services, physician services, outpatient hospital services, and post-acute care services for an episode of care.

Increases to Medicaid payments for primary care. Medicaid payments increase to 100% of the Medicare payment rate for 2013 and 2014. The increase is being financed with federal funding.

Medicaid coverage for preventive services. Provision increases federal matching payments of 1% for preventive services in Medicaid for states that offer Medicaid coverage with no patient costs-sharing for services recommended (rated A or B) by the U.S. Preventive Services Task Force and for recommended immunizations.

Closing of the Medicare drug coverage gap. Begin phase-in of federal subsidies for brand-name prescriptions filled in Medicare part D coverage gap (reducing co-insurance from 100% in 2010 to 25% in 2020, in addition to the 50% manufacturer brand-name discount).

States notify feds about exchange participation. State notification of whether they will participate in the American Health Benefit Exchange.

Deductions for unreimbursed medical expenses. Increases the threshold for the itemized deduction of unreimbursed medical expenses from 7.5% of adjusted gross income to 10% of adjusted gross income. Provision also waives the increase for people aged 65 or more years from 2013 to 2016.

Caps on flexible spending accounts. Flexible spending for medical expenses is limited to $2,500 a year. The provision will adjust that amount annually based on the cost of living.

Medicare tax hike. Medicare Part A (hospital insurance) tax rate increases by 0.9% (to 2.35%) on earnings of more than $200,000 for individual taxpayers and $250,000 for married couples filing jointly. The provision imposes a 3.8% assessment on unearned income for higher-income taxpayers.

Employer retiree coverage subsidy. Dumps the tax deduction for employers who receive Medicare Part D retiree drug subsidy payments.

Tax on medical devices. Imposes an excise tax of 2.3% on the sale of any taxable medical device.

In April: Financial disclosure mandate. Requires disclosure of financial relationships between doctors, hospitals, pharmacists, other providers, and manufacturers and distributors of covered drugs, devices, biologicals, and medical supplies.