Friday, March 26, 2010

What the health act does and when

There seems to be some confusion about what will happen and when when it comes to health reform. Here are some comments and sources of additonal information.

The Individual Mandate: You probably heard about the individual mandate to buy coverage. It begins in 2014. Failure to maintain coverage will result in a penalty of $95 in 2014, $350 in 2015, $750 in 2016 and indexed thereafter. For those under the age of 18, the applicable penalty will be one-half of the amounts listed above. Exceptions to the individual responsibility requirement to maintain minimum essential coverage are made for religious objectors, individuals not lawfully present, and incarcerated individuals. Exemptions from the penalty will be made for those who cannot afford coverage, taxpayers with income under 100 percent of poverty, members of Indian tribes, those who have received a hardship waiver and those who were not covered for a period of less than three months during the year. You will have to report coverage on your income tax.

Summary of the health reform Act:

You can read a good summary of the entire health reform act by going to

Key provisions to take effect in the next 12 months:

Click here for a summary of provisions of the act that will take effect in the first 12 monts:

Also, the Kaiser Foundation provides a very good year-by-year summary of what will take effect at this site plus you can download a printable pdf version at this location

Here are some things that will happen this year:

  • People who can’t get coverage because of a pre-existing condition will be eligible to get coverage through a high risk pool that will be set up 90 days following enactment. Thus, if you or someone you know has not been able to get coverage because they have cancer or diabetes or some other condition, now they will have the ability to get coverage.
  • You will be able to keep your child on your policy until he/she reaches age 26 whether you have a group or individual policy. In other words, if you son or daughter graduates from college and can’t find a job or can’t find a job with a company that offers health insurance, you can keep him on your policy at least for a few more years.
  • Insurance companies will not longer be able to place dollar value limits on lifetime coverage. You or a member of your family will not have to worry that they might reach some cap where the insurance company would stop paying because they came down with an illness that was very expensive to treat. You won’t have to worry about being driven into bankruptcy because of health bills.
  • Your insurance company will not be allowed to find an excuse not to pay your medical bills simply because of some innocent mistake on your application unless you committed fraud. For example, your insurance company won't be able to deny payment for your cancer treatment because you failed to include the right code number on your application form or you failed to disclose that you had allergies when you six years old.
  • Insurers will be prevented from excluding your child from dependent coverage because of a pre-existing condition. If you child is diagnosed with diabetes, cancer or something else, they want be denied coverage.
  • Beginning this year, small businesses (up to 25 employees and average wages of less than $50,000) will receive tax credits to provide health insurance for their employees. If you run a small business, you’ll get help in providing coverage for yourself and your employees.
  • Beginning this year, insurers will be required to report the proportion of premium dollars they spend on clinical services, quality and other costs and beginning January 1, 2011, they will be required to provide rebates to consumers it they don’t spend a required % of the premiums they collect (80% in the individual and small group markets and 85% in the large group markets). In other words, insurers will be required to show that premium increases are justified by increased their costs of clinical services and/or quality.
  • A process will be put in place in 2010 to review rate increases. States will report on trends in premium increases and recommend whether some insurers should be excluded from the Exchanges when they are set up in 2014 because of unjustifiable rate increases. In other words, if your insurance company is jacking up rates for no justifiable reason that company might not be able to sell through the exchanges and thereby gain additional customers.
  • Beginning this year, the Act provides for increased money for scholarships and loans to expand the health care workforce to meet the expected increase in demand. There will be more money available for people who want to train to become doctors, nurses, etc.

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