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A Consumer's Guide To The Health Law, Six Months In

Sep 15, 2010

By Sept. 23, the six month anniversary of the enactment of the health overhaul, some of the law’s key provisions will be in effect.  Most consumers, however, won’t see any changes until after Jan. 1 when their new health plan year begins. 

In the meantime, employees will be getting ready for fall’s “open enrollment” period, when they pick their health coverage for the following year. In addition, people who buy their own health insurance will be researching their options. And Medicare beneficiaries will be able to change their coverage later this year, if they want to. Here’s a look at how the law affects people who get their coverage at work, buy their own health insurance or are enrolled in Medicare.

Q:  I get my coverage through work and the “open enrollment” period for next year is approaching. I’d like to keep my current health plan. Will it be affected by the new law?

A: Your plan will feature some new consumer protections. For example, your plan won’t be able to set a lifetime limit on coverage.  And if you have an adult child up to age 26 who can’t get health insurance at a job, you’ll be able to keep him or her on your health plan.

These changes kick in for plan years beginning on or after Sept. 23.

If your employer makes significant changes – like cutting benefits or raising your out-of-pocket costs beyond a specific amount – the plan is considered a new plan (rather than an existing “grandfathered” one) and must include a wider set of consumer protections.

Q: Like what?

Patients will get, for example, certain preventive services such as breast cancer screenings and cholesterol tests without paying deductibles or co-payments. In addition, they’ll be able to see obstetricians and pediatricians without getting prior authorizations. Recommended immunizations also must be provided at no cost.

Q: What if my employer offers a new plan and I want to switch to that?

A: In that case, your coverage would include the wider set of protections.

Q: Will my health insurance cost less?

A: Probably not. Health insurance premiums have been increasing steadily over the last decade and that trend is continuing. According to a new report from the Kaiser Family Foundation and the Health Research & Educational Trust, workers nationwide on average are paying 14 percent, or $482, more for family health insurance coverage in 2010 than in 2009. Employers, struggling with the recession, aren’t increasing their share. Instead, they’re shifting more costs onto employees, according to the survey. (KHN is a program of the foundation).

A recent study by the National Business Group on Health found almost two-thirds of employers planned to ask employees to contribute more toward their premiums. 

Q: I’m a small business owner. Do I have to offer coverage to my workers this fall? And if I do, will the government help me pay for it?

A:  No business owner – small or large -- is required to offer coverage. But small businesses with 25 or fewer full-time employees who earn an average yearly salary of $50,000 or less will qualify for a tax credit up to 35 percent of the cost of premiums. The credit increases to 50 percent in 2014 for most small employers. To qualify for the credits, businesses must cover at least 50 percent of the cost of workers’ insurance.

Starting in 2014, businesses with 50 or more employees that don’t provide health care coverage and have at least one full-time worker who receives subsidized coverage in the health insurance exchanges will have to pay a fee of up to $2,000 per full-time employee. (The firm’s first 30 workers would be excluded from the fee.)  Businesses with 50 or fewer workers would be exempt from the requirement.

Q: I buy my own health insurance. How will the health law affect my coverage?

A:  For policy years starting after Sept. 23, all health insurance policies in the individual market will be barred from cancelling coverage once you get sick -- a practice known as “rescission” – unless you committed fraud when applying for coverage.  Insurers will be prohibited from setting lifetime limits on your coverage. The plans must allow you to keep an adult child up to age 26 on your health plan.

New policies can’t deny coverage for children up to age 19 based on a pre-existing medical condition. But “grandfathered” plans can; they can also set annual dollar limits and require cost-sharing for some preventive services.  Most people in the individual market are expected to move to a new plan by 2014. Analysts say that most plans in the group market also will have likely lost their “grandfathered” status due to changes made to the plans.

Other provisions of the law will kick in later.  For example, as of 2014 insurers won’t be able to refuse to cover adults with pre-existing medical conditions.  That same year, individuals whose incomes are up to 400 percent of poverty -- $88,200 for a family of four at the current poverty level – will qualify for subsidies to help purchase health insurance on exchanges, marketplaces where consumers can shop for coverage. At that point, most people will have to have health insurance or pay a fine.

Q: I’m on Medicare. Will my benefits change?

A:  Your basic package of Medicare benefits won’t shrink and in fact will expand under the law.  But if you’re in a Medicare Advantage plan – a private plan that offers Medicare benefits – you might lose some extra benefits at some point.

In terms of the overall Medicare program, let’s start with prescription drugs. As of late August, one million Medicare beneficiaries received a $250 check to help cover prescription drug costs in what’s known as the doughnut hole. That’s the gap in coverage where beneficiaries must pay the full cost of their prescriptions until catastrophic coverage kicks in. Starting next year, beneficiaries will receive a 50 percent discount on brand name drugs and a 7 percent discount on generic drugs while they are in the coverage gap. The health law closes the gap entirely by 2020.

In addition, beginning next year, Medicare beneficiaries won’t have to pay co-payments or deductibles on many preventive health care services, including diabetes and cervical cancer screenings. Medicare will also pay for an annual wellness visit to the doctor.

To help pay for the health overhaul, Congress is cutting payments to Medicare Advantage plans, beginning the year after next. Beneficiaries won’t lose any of their basic Medicare benefits as a result of the reductions but some Medicare Advantage insurers could decide to stop offering additional benefits, such as coverage for eyeglasses or gym memberships.

Q: Many Republicans have criticized the health care law as too intrusive and too expensive. If they pick up seats in the November election, how could the law be affected?

A: Some Republicans have threatened to block funding for the implementation of the law; others have called for its outright repeal. But accomplishing either would be tough unless they win large majorities in both the House and Senate.

President Barack Obama would likely veto any legislation to gut the law, so Republicans would need a veto-proof majority – two-thirds of both chambers – to override such an action. Also, some   Republicans might be reluctant to repeal provisions of the bill that are popular with the public, such as keeping a child up to age 26 on their parents’ health care plan or outlawing rescissions and lifetime and annual limits.

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