Health care reform changes kick in next month — we tell you what to expect
Published: August 8, 2010
By Michelle Dupler, Herald staff writer
Individuals and businesses will start to see changes in health coverage in coming months as a result of the health care reform law enacted earlier this year.
Starting this month, new purchase options exist for people who have gone without insurance because of pre-existing conditions, and in September coverage will expand for young adults.
Also in September, people on new employer-sponsored health plans won’t have to pay out of pocket expenses for preventive services, such as cancer or diabetes screenings. A corresponding provision for individual plans starts Jan. 1.
Many people who are insured through their employers won’t see many changes at all because of a provision in the law that allowed existing plans to be “grandfathered.” What they will see are limits on how much their co-pays, deductibles and premiums can be increased, or the plans risk losing grandfather status.
Some small businesses can get tax credits to help pay for their employees’ coverage, although the National Federation of Independent Businesses believes fewer businesses will qualify than lawmakers promised.
The bill is expected to help 32 million uninsured Americans get coverage, and for the first time most people would be required to purchase insurance and face penalties if they refuse.
Reforms will be phased in over time, with the full bill in force by 2014.
But a federal lawsuit by 20 states and the NFIB could end with some provisions of the bill — namely the insurance purchase mandate and an expansion of Medicaid eligibility — being found unconstitutional.
And a number of Republican candidates for the House and Senate, including several candidates seeking to unseat Democratic incumbent Sen. Patty Murray, have said they’ll repeal the law if elected and if Republicans can win a majority in Congress.
Even some proponents of the law weren’t fully satisfied with the outcome, and have said they will keep working on issues like equalizing Medicare reimbursement rates among the states.
Here’s an overview of some of the key changes, using information from federal website health care.gov and the state Insurance Commissioner’s Office, as well as organizations such as AARP and NFIB:
Pre-existing conditions
One of the biggest changes coming is that in 2014 health plans will no longer be allowed to exclude coverage for pre-existing conditions. They’ll have to accept every employer and every individual who applies for coverage, although they can create special enrollment periods.
After Sept. 23 this year, health plans won’t be allowed to deny coverage to children and teens up to age 19 because of pre-existing conditions. That provision becomes effective starting at the beginning of the new plan year, so if a plan renews Jan. 1, the pre-existing condition coverage for children would start then.
For adults, in the meantime Washington state has created a new high-risk insurance pool that allows people who have been uninsured for at least six months because of a pre-existing condition to buy coverage.
The Pre-Existing Condition Insurance Plan is being run by the Washington State Health Insurance Pool and is funded by a $102 million federal grant until 2014.
Applicants must be Washington residents, citizens or legal residents of the United States, have been uninsured for at least six months, and have a pre-existing medical condition.
Benefits under the plan depend on which deductible applicants select. For those who apply by Aug. 15, coverage starts Sept. 1.
Premiums range from $161 to $769 per month for a $2,500 deductible plan, and depend on age and whether the applicant smokes. Premiums for a $500 deductible plan range from $342 to $1,577.
Applications are available at http://www.wship.org/PCIP-WA, or call 877-505-0514 .
Young adults
Starting Sept. 23, young adults will be able to stay on their parents’ plans until they turn 26, unless they get a job that offers health insurance.
Like the pre-existing condition coverage for children, this new provision becomes effective at the start of the next plan year.
According to the federal Department of Health and Human Services, 30 percent of young adults are uninsured — the highest rate of any age group — and young adults have less access to employer-provided insurance.
Young adults do not have to be listed as dependents on their parents’ tax returns or live with their parents to get coverage.
Preventive care
A lengthy list of preventive care services will be provided with no out of pocket expenses starting after Sept. 23 for people on new employer-sponsored plans and Jan. 1 for people buying individual insurance.
Preventive services include screenings for high blood pressure, diabetes, obesity, depression, HIV, high cholesterol and some kinds of cancer.
Colorectal cancer screenings for adults over 50 will be covered, as will mammograms for women over 40, and cervical cancer screenings for women.
Pregnant women will get support with breast feeding, and folic acid supplements.
Preventive medicine such as aspirin therapy and immunizations will be covered at no cost.
For children, services such as autism and developmental screenings, hearing and vision screenings, and alcohol and drug use assessments for adolescents will be covered.
Seniors’ coverage
McDonald said the biggest worry she’s heard from seniors is that Medicare benefits will be cut.
“There has been a lot of misinformation about Medicare,” she said. “The bill explicitly says there will be no cuts to guaranteed … benefits. The bill actually extends the solvency of the Medicare trust fund over a decade.”
She cited the coverage of preventive screenings as an improvement that will ensure people are healthier when they come onto Medicare, thereby reducing costs in the long run.
The new law adds the benefit of covering annual screenings for Medicare patients. Now, only the first wellness screening a patient gets is covered, McDonald said. The law also phases out the Medicare Part D coverage gap known as the “doughnut hole,” which has left some seniors struggling to pay prescription drug costs.
Part D participants who fall into the hole in 2010 will get a $250 rebate check. And starting in 2011 they’ll get a 50 percent discount from drug manufacturers on the cost of brand name drugs. By 2020, the gap will be phased out altogether.
About 160,000 Washington seniors fall into the gap each year, she said.
McDonald cautioned seniors to be wary of scammers who claim they can help seniors get their rebate checks. “They don’t need to do anything to get that check,” she said. “It’s automatic.”
One thing the law won’t do is address disparities in Medicare reimbursement rates from state to state that are causing doctors in Washington, where reimbursement rates are lower, to stop taking Medicare patients.
“This is an ongoing political debate,” McDonald said. “This doesn’t make it worse but it doesn’t solve it.”
She said the bill did provide for a study of Medicare reimbursement disparities, and that AARP will keep pushing to get the problem fixed.
Small businesses
From now until 2013, small-business owners who provide insurance for employees will be able to get a tax credit equal to 35 percent of their contribution toward the premium cost, if they contribute at least 50 percent.
To qualify, businesses must employ fewer than 25 full-time people who earn less than $50,000 on average.
Businesses that may be eligible should receive a postcard from the Internal Revenue Service with instructions how to apply for the credit.
But fewer businesses may be eligible than were promised, said Patrick Connor, director of NFIB Washington.
“I think those small businesses who thought they were going to get some relief through the small-business tax credit are going to be sorely disappointed,” he said.
According to healthreform.gov, a federal site providing information about the bill, about 106,000 Washington businesses could be helped by the tax credit.
The NFIB analysis estimated only 49,000 businesses would qualify, Connor said.
He said the credit gets reduced if businesses employ more than 10 people or pay more than $25,000, meaning less help than government information is telling employers.
“And it’s only available for a maximum of six years,” he said. “If the tax credit is making it possible for businesses to afford to provide coverage for six years, what happens in year seven when it goes away?”
He said his organization also is concerned about new paperwork requirements for businesses, and that more burdens may be coming as regulators decide what the bill means.
“We’re still digging through the 2,000-plus pages of the bill to find all the hidden nuggets,” Connor said.
Grandfathered plans
Connor estimated 80 percent of existing small-business plans will be exempt from the reform law under a “grandfather” provision that allows plans created prior to March 23, 2010, to avoid many of the new requirements.
The grandfather provision is intended to allow people who like their current plan to keep it as is. Stephanie Marquis, spokeswoman for state Insurance Commissioner Mike Kreidler, said the rule allows plans to stay intact indefinitely, but they lose their grandfather status if the plan significantly reduces benefits or increases an insured’s out-of-pocket expenses beyond what they are in 2010.
Grandfathered plans can’t cut or reduce benefits, such as dropping coverage for illnesses such as HIV or diabetes. They also can’t raise deductibles, co-payments, share of medical bills and the percentage of the premium contributed by an employer can’t drop more than 5 percent.
Grandfathered plans can’t drop people for getting sick or making an unintentional mistake on their application, and they’re not exempt from the expansion of coverage for young adults.
Connor said no plan will realistically be able to stay grandfathered for long.
“Simple inflation is going to drive changes in costs and expenses,” he said. “It’s hard to imagine how anyone is going to pay for a plan’s cost in 2016 using 2010 dollars.”
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