Federal Health Care Reform Brings Huge Benefits to Utah, Starting this Year
By Sheila Walsh-McDonald
Salt Lake CAP
As an advocate for low income households, I interact daily with families and individuals who are uninsured for many different reasons: they are not offered employer sponsored insurance, they cannot afford their share of the premiums for employer sponsored insurance, pre-existing conditions prevent them from finding affordable insurance, or they are young adults who are working or going to school and can’t afford individual plans. For many, there is uncertainty about public programs such as Medicaid, CHIP, and Utah Premium Partnership (Utah’s premium subsidy program) and whether they will qualify. For all of these reasons, I am thrilled with the recent passage of the Patient Protection and Affordable Care Act by Congress.
Many provisions of the bill begin in 2010, with the most significant changes like insurance market reforms and coverage expansions, coming in 2014. Additional improvements, like the closing of the ‘donut hole’ in seniors Medicare Part D coverage, continue through 2020. In truth, most of us won’t notice any difference in our insurance arrangements, although just about everyone will benefit from the many insurance market reforms. Only 10% of Americans will have a different insurance arrangement come 2019; however, many of the families and individuals described above will be able to count on more secure health insurance arrangement. Health care will be there when we need it most.
What will the new health reform law do in the first year? Here are a few of the major benefits to look forward to in 2010:
Small businesses will receive help with insurance costs. Effective 2010, the new law will establish new tax credits of up to 35% of the employer premium contribution. Small employers with no more than 25 employees and an annual average wage of less than $50,000 that provide coverage and pay at least 50% of the premium cost will qualify. Find a helpful calculator and other tools to orient small business owners here: http://www.healthpolicyproject.org/HR_SmallBiz.html
Uninsured people with pre-existing conditions may qualify for immediate help. The new law creates a new temporary insurance program for people who have been uninsured for six months and who have a pre-existing condition. Premiums will be the same as those that individuals without a pre-existing condition pay for the same coverage.
Insurers will be prohibited from denying coverage for children with pre-existing conditions.
Plans will offer free prevention benefits. In the first year, all newly sold insurance plans (private or public) will be required to cover prevention and wellness benefits with no deductibles or cost sharing!
No more arbitrary limits on coverage. Insurance companies will be prohibited from imposing lifetime limits on benefits. They will also be tightly restricted in the use of annual limits in new plans. In 2014, annual lifetime limits will be prohibited entirely for all plans offering essential benefits.
Unfair insurance rescissions will be banned. Insurance companies will be prohibited from arbitrarily revoking coverage for people when they file a claim for benefits. People, who have paid their premiums, can no longer be dropped because they become sick.
More young adults will stay insured. Young adults who do not have an offer of coverage through an employer will be allowed to stay on their parent’s policy until their 26th birthday.
The Medicare doughnut hole will start to shrink. Medicare beneficiaries (seniors and people with disabilities) who fall into the Medicare Part D prescription drug coverage gap in 2010 will receive a $250 rebate. (The doughnut hole occurs for seniors only on traditional Medicare after they have paid their deductible of $295, then seniors pay 25% up to $2,700 on drug expenses. Coverage stops after they have $2,700 in drug expenses. The doughnut hole is the coverage gap of $3,454 in drugs costs between $2,700 and $6,154. Seniors must pay this full cost of drug coverage until they reach $6,154 in drug costs. ) In January 2011, beneficiaries in the doughnut hole will receive a 50% discount on brand name drugs and other discounts on generic drugs. These discounts will continue every year until the doughnut hole is closed in 2020.
Employers will receive incentives to keep early retirees insured. A new reinsurance program will be created for employers providing health insurance coverage to retirees over age 55, who are not eligible for Medicare. This program will help protect coverage while reducing premiums for employer-based and retiree coverage for people aged 55-64.
Premiums will pay for health care services, not overhead. Insurance companies will be required to spend at least 80% (individual market) or 85% (employer market) of the premium dollar they collect on health care services and improvements in the quality of care. If they fail to do so, they must provide a rebate to consumers.
Small business owners will find it more affordable to insure their families and their employees; children and adults with pre-existing conditions will no longer be denied coverage; seniors will find it easier to pay for their medications; and all of the nation’s insured will benefit from greater insurance protections. There will be further changes in future years, but many will benefit in this first year of implementation.
Sheila Walsh-McDonald is a Health Care Advocate with the Salt Lake Community Action Program and a member of U-SHARE, Utahns for Sustainable Health Reform.