All new individual major medical health insurance policies sold to individuals and families faced new requirements. The requirements took effect on January 1, 2014. They include:
Risk adjustment involves transferring funds from plans with lower-risk enrollees to plans with higher-risk enrollees. It was intended to encourage insurers to compete based on value and efficiency rather than by attracting healthier enrollees. Of the three risk management programs, only risk adjustment was permanent. Plans with low actuarial risk compensate plans with high actuarial risk.
Medicare reimbursements were reduced to insurers and drug companies for private Medicare Advantage policies that the Government Accountability Office and Medicare Payment Advisory Commission found to be excessively costly relative to standard Medicare; and to hospitals that failed standards of efficiency and care.
Income from self-employment and wages of single individuals in excess of $200,000 annually are subjected to an additional tax of 0.9%. The threshold amount is $250,000 for a married couple filing jointly (threshold applies to their total compensation), or $125,000 for a married person filing separately.