Sunday, May 02, 2010

Health Care Reform Bill - What It Means To Us

By Amit Chakrabarty, MD

May 1, 2010

If you haven't mastered the details on all 2,309 pages of the health care reform bill signed by President Obama, there's nothing wrong with you -- even experts are having a hard time getting a grip on all the details. So we've done the work for you. If you're going to take away just five things from the new legislation, here they are in a nutshell for you:

1. Health insurance companies can't discriminate against you because you have a pre-existing condition.

More than 13 million American non-elderly adults have been denied insurance specifically because of their medical conditions, according to the Commonwealth Fund, and the Kaiser Family Foundation says 21 percent of people who apply for health insurance on their own get turned down, charged a higher price or offered a plan that excludes coverage for their pre-existing condition.

Starting in 2014, the new health care reform legislation makes it illegal for any health insurance plan to use pre-existing conditions to exclude, limit or set unrealistic rates on the coverage an individual or dependent can receive.

In the meantime, if you have a pre-existing condition, starting in 90 days you should be able to join a national high-risk pool, according to Linda Blumberg, a senior fellow at the Urban Institute. She also recommends finding out whether your state has an existing state high-risk pool. Here is contact information for the 35 states that have high-risk pools from the National Association of State Comprehensive Health Insurance Plans.

2. Young people can remain on parents' insurance until age 26.

The health care reform legislation requires insurance companies to allow dependent children to stay on their parents' insurance policies until age 26. The children can't have jobs that offer insurance, and they must be claimed as dependents on their parents' taxes.

Currently in most states, dependents get booted off Mom's and Dad's health insurance policy before their 26th birthday, sometimes as early as age 19. For the rules in your state, see this list from the Kaiser Family Foundation.

3. You could get a subsidy to buy insurance if you make less than $88,000 per year for a family of four.

Starting in 2014, the health care reform bill provides subsidies for people who don't get insurance from their employers and therefore have to buy it on their own. The size of the subsidy depends on your income, whether you're single or have a family, your age, and where you live. Here are a few examples:

• A 40-year old individual making $30,000 a year in a medium-cost area of the country will get an $850 subsidy toward buying a policy, which should cost about $3,500, according to a Kaiser Family Foundation subsidy calculator.

• A 40-year-old in the same city who has a family of four and is making $60,000 will get a $4,220 subsidy toward a policy that costs $9,435.

4. If you don't get insurance from your employer that might change.

Starting in 2014, if your company employs more than 50 people, it will be required to offer you a health plan that covers at least 60 percent of your overall health costs, or the company will be fined $750 per year per full-time worker. That fine could increase to $2,000 if the reconciliation act passes.

In the meantime, groups like Coverage for All, Ehealthinsurance and the Patient Advocate Foundation specialize in helping people find affordable insurance and free care. You can find links to resources including prescription assistance programs here.

5. The health care reform legislation has some benefits for senior citizens, but it might have some disadvantages as well

The AARP, formerly known as the American Association of Retired Persons, says health care legislation does two important things for seniors: It gives people on Medicare new access to free preventive services such as screenings for cancer and diabetes. Also, by 2020 it will close the "doughnut hole", the gap in Part-D where Medicare stops paying once a senior has spent more than $2,830 on prescription drugs and resumes when the individual's out-of-pocket spending has reached about $4,550.

However, the Congressional Budget Office, in a letter to Senate Majority Leader Harry Reid, said the new legislation also presents some downsides. Spending for Medicare beneficiaries will increase 2 percent or less each year, instead of the annual 4 percent increase they received previously. Some analysts worry seniors may start to feel that difference in the future.

IN OTHER WORDS, THIS IS WHAT IT MEANS:

If you are one of the 46 million uninsured

Benefits:

• If you have low income you might have an easier time qualifying for Medicaid

• Based on your income you could receive federal aid to purchase private insurance

• You will not be denied coverage or charged more based on preexisting conditions

• There will be a cap for out of pocket expenses and end co-pays and deductibles for preventive care

• You might have the option of buying from a government plan or cooperative

Downsides:

• You are required to buy insurance or pay penalty

• Young people and healthy people could end up paying higher premiums

If you are on Medicare now:

Benefits:

• The “doughnut hole” for prescription drug coverage (which leaves you responsible for cost when you have reached $2700 of annual prescription drug expenses till you reach $6100 in expenses) could be narrowed or closed

• You could get preventive services without paying anything out of pocket

• You could qualify for drug subsidies

• Premiums could be reduced for seniors enrolling in wellness or disease management programs

• Payments to primary care docs could increased

• Annual out of pocket expenses could be decreased

Downsides:

• Those with higher incomes could be required to pay a higher premium for drug coverage

• Could face higher out patient deductibles

• Cut to frills such as free eyeglasses and free health club memberships

If you are on Medicaid:

Benefits:

• Increased reimbursements to doctors could mean that you could find it easier to find doctors to take you

• Easier access to affordable private health care plans

Downsides:

• If moved to a private health care plan you could loose special benefits of free hearing aids and eyeglasses to children

Individual buying your own insurance

Benefit

• Option of buying insurance through exchanges that have better benefits and less out of pocket expenses

• Insures through exchanges will be barred from denying coverage based on pre existing conditions

• Older people could end up paying less premiums for similar insurance

• Option of buying cooperative plans that might be cheaper

• Based on your income you could be eligible for federal aid to purchase insurance

• You employer could be required to provide health benefits

Downsides:

• You could be charged a penalty for not buying coverage

• Young and healthy people could end up paying more

• Coverage might still be unaffordable

HERE IS THE TIMELINE

Within one year of enactment (2010-2011)

• Insurance companies barred from dropping people from coverage when they get sick, ending the practice of rescission. Lifetime coverage limits eliminated and annual limits restricted.

• Young adults able to stay on their parents' health plans until age 26. Many health plans currently drop dependents from coverage when they turn 19 or finish college.

• Uninsured adults with pre-existing conditions will be able to obtain health coverage through a new program that will expire once new insurance exchanges begin operating in 2014.

• A temporary reinsurance program is created to help companies maintain health coverage for early retirees between the ages of 55 and 64. This also expires in 2014.

• Medicare drug beneficiaries who fall into the "doughnut hole" coverage gap will get a $250 rebate. The bill eventually closes that gap which currently begins after $2,700 is spent on drugs. Coverage starts again after $6,154 is spent.

• A tax credit becomes available for some small businesses to help provide coverage for workers.

• A 10% tax on indoor tanning services that use ultraviolet lamps goes into effect on July 1.

Effective during 2011

• Medicare provides 10% bonus payments to primary care physicians and general surgeons.

• Medicare beneficiaries will be able to get a free annual wellness visit and personalized prevention plan service. New health plans will be required to cover preventive services with little or no cost to patients.

• A new program under the Medicaid plan for the poor goes into effect in October that allows states to offer home and community based care for the disabled that might otherwise require institutional care.

• Payments to insurers offering Medicare Advantage services are frozen at 2010 levels. These payments are to be gradually reduced to bring them more in line with traditional Medicare.

• Employers are required to disclose the value of health benefits on employees' W-2 tax forms.

• An annual fee is imposed on pharmaceutical companies according to market share. The fee does not apply to companies with sales of $5 million or less.

Effective as of 2012

• Physician payment reforms are implemented in Medicare to enhance primary care services and encourage doctors to form "accountable care organizations" to improve quality and efficiency of care.

• An incentive program is established in Medicare for acute care hospitals to improve quality outcomes.

• The Centers for Medicare and Medicaid Services, which oversees the government programs, begin tracking hospital readmission rates and puts in place financial incentives to reduce preventable readmissions.

Effective as of 2013

• A national pilot program is established for Medicare on payment bundling to encourage doctors, hospitals and other care providers to better coordinate patient care.

• The threshold for claiming medical expenses on itemized tax returns is raised to 10% from 7.5% of income. The threshold remains at 7.5% for the elderly through 2016.

• The Medicare payroll tax is raised to 2.35% from 1.45% for individuals earning more than $200,000 and married couples with incomes over $250,000. The tax is imposed on some investment income for that income group.

• A 2.9% excise tax in imposed on the sale of medical devices. Anything generally purchased at the retail level by the public is excluded from the tax.

Effective as of 2014

Patient Protection and Affordable Care Act# Effective by January 1, 2014

• State health insurance exchanges for small businesses and individuals open.

• Individuals with income up to 133% of the federal poverty level qualify for Medicaid coverage.

• Healthcare tax credits become available to help people with incomes up to 400 percent of poverty purchase coverage on the exchange.

• Premium cap for maximum "out-of-pocket" pay will be established for people with incomes up to 400 percent of FPL. Section 1401 of PPACA explains that the subsidy will be provided as an advanceble, refundable tax credit and gives a formula for it calculation. Refundable tax credit is a way to provide government benefit to people even with no tax liability (example: Child Tax Credit). According to White House and Congressional Budget Office the maximum share of income that enrollees would have to pay for the "silver" healthcare plan would vary depending on their income relative to the federal poverty level, as follows: for families with income 133–150% of FPL will be 4-4.7% of income, for families with income 150–200% of FPL will be 4.7-6.5% of income, for families with income 200–250% of FPL will be 6.5-8.4% of income, for families with income 250-300% of FPL will be 8.4-10.2% of income, for families with income from 300-400% of FPL will be 10.2% of income. In 2016, the FPL is projected to equal about $11,800 for a single person and about $24,000 for family of four. See Subsidy Calculator for specific dollar amount.

• Most people required to obtain health insurance coverage or pay a tax if they don't.

• Health plans no longer can exclude people from coverage due to pre-existing conditions.

• Employers with 50 or more workers who do not offer coverage face a fine of $2,000 for each employee if any worker receives subsidized insurance on the exchange. The first 30 employees aren't counted for the fine.

• Health insurance companies begin paying a fee based on their market share.

Effective 2015

• Medicare creates a physician payment program aimed at rewarding quality of care rather than volume of services.

Effective 2018

• An excise tax on high cost employer-provided plans is imposed. The first $27,500 of a family plan and $10,200 for individual coverage is exempt from the tax. Higher levels are set for plans covering retirees and people in high risk professions. For more information visit:

http://amfix.blogs.cnn.com/2010/03/23/what-health-care-means-for-you/  

http://www.whitehouse.gov/healthreform

http://www.healthreform.gov

Sources for this article: Reuters, CNN, Washington Post, Wikipedia, Medical Economics

Amit Chakrabarty, MD, is a practicing urologist in Huntsville, Alabama and is the Chairman of Urologic Clinics of North Alabama (www.ucna.com). He was the past regional director of American Association of Physicians of Indian Origin (AAPI) and is the President of Indian American Urological Association. He serves as one of the Board of Directors of Alabama Association of Physicians of Indian Origin. He was the president of Indian Cultural Association of Birmingham in 1987-88. He has been the President and Chairman, Board of Trustees of Huntsville India Association. Dr. Chakrabarty is among Pravasi's Medical correspondents team and can be reached at .(JavaScript must be enabled to view this email address).

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