August 19, 2017

 
Healthcare Reform Tools


 
The Affordable Care Act has already helped tens of millions of people with healthcare reform insurance provisions. And even more healthcare reform insurance provisions changes will go into effect in the next few years. Take advantage of what's already happened and be aware of what's still to come. While some of the details could change depending on the resolution of the reconciliation bill, the key features of healthcare reform have been determined and, barring successful court challenges or repeal, will take effect. Know the healthcare reform insurance provisions that are in effect now and the ones that will become effective soon.
 
Already in effect:
1. Expanded Appeal Rights -  A really important feature of the new reform law that took effect in September 2010 is the expansion and clarification of consumers' right to appeal adverse insurance company decisions.   Now, insureds and providers will have uniform standards that will govern appeals -- states, insurers, and health plans will be able to provide more process, but not less.  In addition, the notice of adverse action that gets sent to consumers will be clearer so you will know your rights whenever you get a denial of coverage.  
 
But the biggest boon to consumers is the expansion of external appeals, the right to have an independent review organization (IRO) review your denial of coverage and consider whether to overturn your insurer's or plan's decision.  For those of you living in states that don't have external appeals for small group and individual policies -- Mississippi, North Dakota, South Dakota, Alabama, Idaho -- you will now.  And most of all, for those of you in self-funded plans -- large group plans, mostly -- you now will have a right to independent review.  This is HUGE.  
 

2. Cheaper drugs for people on Medicare - Seniors who reach the "doughnut hole"—the point when they have to start paying prescription drug expenses themselves—now get a 50 percent discount when buying brand-name drugs and a 7 percent discount on generic drugs (14 percent in 2012) that are covered by Part D. About 900,000 people have already taken advantage of the provision. And about 4 million people whose drug costs tipped them into the doughnut hole received a one-time $250 rebate check last year.  

3. More young adults with insurance - The new law allows young adults to stay on their parents' health-insurance plan unless they're covered on their own through an employer. About 1.2 million people 25 and younger will rejoin or stay on a parent's plan in 2011. College students who have insurance at school also got some new protection. Their plans can no longer have lifetime limits on coverage or be canceled due to illness.

4. Help for early retirees - Almost 6,000 companies have signed up for subsidies to help them keep their health-insurance programs for people who retire before age 65. The government had given $2.7 billion to them as of June 2011, preserving coverage for more than 5 million people between 55 and 65 and family members.
 
5. Better coverage for people with pre-existing conditions - Two health care reform insurance provisions of the law have helped about 27,000 adults and 160,000 children so far. There's a new program, the Pre-Existing Condition Insurance Plan (PCIP), for adults who have been denied coverage by insurers because of their health status. (People must be uninsured for at least six months to be eligible.) And insurance companies are no longer allowed to deny coverage to children younger than 19 who have a pre-existing condition. But insurers can still charge more for the coverage.
 
6. Free screening tests and other preventive measures - Some 18.9 million people on Medicare have received one or more free preventive services, including screening tests for glaucoma, heart disease, breast and cervical cancer, prostate cancer, and colon cancer. In addition, more than 1 million have had a free "wellness" visit.
 
7. More consumer protection - Health insurers can't set lifetime limits on your coverage or cancel it if you get sick. Annual limits on coverage will be phased out over the next few years for most insurance plans.
 
8. More price protection - The Federal government and many states will be scrutinizing proposed premium increases more closely for plans sold to individuals and small businesses. Those that are 10 percent or more will trigger an automatic review to gauge the "reasonableness" of the increase.
 
9. Help for small businesses - Businesses with fewer than 25 full-time workers can apply for tax credits to help them provide health insurance for their workers. The credits will cover up to 35 percent of the annual cost through 2013 and 50 percent starting in 2014. To qualify, a company's average annual wage for its workers must be below $50,000.
 
Coming in 2012-2013
10. Rebates - Insurers will have to give rebates—either as reduced premiums or directly to consumers—if they spend too much of their revenue on administrative or other business costs instead of medical claims. For large-employer plans, the cutoff will be 85 percent; for individual and small-business plans, it will be 80 percent. The Obama administration estimates that about 9 million people will get rebates in 2012 totaling $1.4 billion.
      
11. Standard disclosure forms - Insurers will have to use a form similar to the Nutrition Facts labels on food packaging to provide information on premiums, co-payments, deductibles, and out-of-pocket limits. This will make it easier for you to compare plans. Insurers will also have to calculate and disclose a patient's out-of-pocket costs for three medical scenarios, such as having a baby, treating breast cancer, and treating diabetes.
 
12. Caps on flexible-spending accounts - The maximum amount you can set aside tax-free to pay for medical expenses not covered by insurance will be $2,500 in 2013. The cap will increase by the annual inflation rate in subsequent years. In 2012 employers can still set whatever limits they want on their FSAs. The typical amount is between $2,500 and $5,000. The reform law will also prevent you from using FSA dollars to pay for over-the-counter drugs unless you have a doctor's prescription
 
13. Tax changes - Starting in 2013, you won't be able to claim a tax deduction for medical expenses not covered by insurance until they reach 10 percent of your gross income, up from the current 7.5 percent. And people with incomes over $200,000 for an individual and $250,000 for a couple will see their Medicare Part A (hospital insurance) tax rate increased from 1.45 percent to 2.35 percent on income over those levels. They'll also pay a 3.8 percent assessment on investment income. Seniors making more than $85,000 for an individual and $170,000 for couples will also pay a slightly higher Part B (doctor's insurance) premium.
 
2014 and beyond:
14. Everyone must have insurance - This "individual mandate" is the subject of several legal challenges and will probably end up in the Supreme Court. But if the provision is upheld, you'll be required to have health insurance if you're a U.S. citizen or legal resident. If you don't get it from work, on your own, or through a public program like Medicaid or CHIP, you'll have to pay a penalty, starting at $95 a person in 2014 and increasing steadily after that. But you can appeal the penalty if you can't afford coverage. And a number of new initiatives, described below, will make it easier for people to get insurance.
 
15. Guaranteed coverage for people with pre-existing conditions - Insurers must sell individual or group coverage to any person or business that wants it, regardless of pre-existing conditions or any other aspect of their health status. And they can't charge people more, or limit coverage, based on their health status, though premiums can vary by age, tobacco use, and geographic location.
 
16. Insurance "exchanges" will open - States will have to open health-insurance "exchanges"—mostly web-based marketplaces where individuals and small businesses can compare and buy health insurance. All plans must offer a comprehensive set of benefits. Exchanges must also help people enroll in Medicaid or CHIP if they're eligible.
 
17. Insurance subsidies - In the exchanges, families and individuals who meet certain income requirements will get subsidies in the form of reduced premiums and out-of-pocket costs. Subsidies will be based on income, with more help for lower-income people. But some help will be available for families earning up to almost $90,000.
 
18. Large employers will have to offer health insurance - Companies with more than 50 full-time workers who don't offer coverage and have workers that qualify for a health-insurance subsidy in the exchanges will have to pay a penalty.
 
19. Expanded criteria for Medicaid - People younger than 65 with income less than 133 percent of the federal poverty level will be eligible for Medicaid. In 2014, the income cutoff is expected to be about $15,000 to $16,000 for individuals and $30,000 to $32,000 for a family of four.
 
 
 Related Resources:
 
1. "Millions of small businesses could be eligible for health care tax credits" , Lori Montgomery. Washington Post, (May 17, 2010).
 
2. "Health insurers to give $1.3 billion in rebates, study finds", Noam Levy, L.A. Times (April 27, 2012).
 
 

 
     
This video provides information about healthcare reform insurance provisions and changes that came about on September 23, 2010 related to the Patient Protection and Affordable Care Act and what those changes mean for individuals who have employer-sponsored group health plans.

 
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