Health-Care Reform Passed. So What Does It Mean?

Here’s a primer on what some of the biggest changes will be in the current health care system. While some changes won’t come into effect till 2014, there are some things that will affect your insurance this year.

 Immediate Changes (2010)

These are the changes that Obama and team call the “early deliverables,” because they would kick into effect as early as six months after the bill is signed into law. Here are a few.

  • The uninsured can finally get coverage: Adults who have been denied coverage because of preexisting conditions will be able to sign on to a federally subsidized insurance program that is due to be established within 90 days. This stopgap insurance program, whose coverage isn’t expected to be comprehensive, will expire once new insurance exchanges start operating in 2014.
  • Coverage for everyone: Insurance companies will not be allowed to drop people from coverage when they get sick, nor can they make health plans vastly more expensive for people with preexisting conditions. Lifetime limits on the amount of health care an insurer will pay for will be eliminated, and annual limits will be restricted.
  • Coverage for kids: For parents with a sick child, there’s some relief—companies won’t be able to drop kids under the age of 19 from coverage because of pre-existing conditions. Parents can also keep their kids on a family plan till they turn 26 or get a job that offers them benefits.
  • Closing the doughnut hole: An estimated 4 million Medicare beneficiaries who hit the so called “doughnut hole” in the program’s drug plan (the gap in coverage which currently begins after $2,700 is spent on drugs) will get a $250 rebate this year. The cost of drugs in the coverage gap will then drop 50 percent next year, and the hole will be closed entirely by 2020.
  • Tax credits for small businesses: For small businesses with fewer than 25 employees and average wages of less than $50,000, the government will provide a tax credit of up to 35 percent of the cost of healthcare premiums so that they may provide coverage to their employees.

Short-Term Changes (2011-2014)

  • Free annual wellness visit for Medicare beneficiaries: Medicare beneficiaries will get a free annual wellness visit, and the new health plans will be required to cover preventive services with little or no cost to patients. Medicare will also provide 10 percent bonus payments to primary care physicians and general surgeons.
  • New Medicaid program for poor: A new Medicaid plan for the poor will allow states to provide more home- and community-based care for disabled people who would otherwise require institutional help.

Long-Term Changes (2014 onwards)

  • Get insurance or face penalties: Beginning in 2014, all Americans would be expected to get insurance or face penalties. The fine depends on household income, but there’s also an upper limit; a family would pay a maximum of $2,085. Extremely low-income people will be exempt from the fines.
  • Large employers must provide insurance: Big employers are also expected to provide coverage to workers or face fines. Businesses with 50 or more workers who do not provide coverage will be fined $2,000 for each uninsured employee.
  • Extending Medicaid to cover low-income families: Medicaid, the state-federal program for the poor and disabled, will be expanded sharply starting 2014. People with annual incomes less than 133 percent of the poverty level ($29,326 for a family of four) will be granted subsidies so that they may purchase insurance.
  • Buying insurance on state exchanges: State-based insurance marketplaces called exchanges are expected to go into effect in 2014, where people can pick and choose the plan that works best  for them. Once the exchanges are up and running, insurers will be barred from rejecting applicants based on their health status. The new policies sold on the exchanges will be required to cover not just hospitalizations, doctor visits, and prescription medicines, but also maternity care and certain preventive exams.



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