Health Reform Step by Step: An Overview
Health Reform: Step-by-Step
The Patient Protection and Affordable Care Act of 2010 is a long, complicated document that will cause real changes in the way that Texans access and pay for health insurance and health care. Texas Impact is committed to making sure that you understand the bill and know what benefits are already available to you.
New insurance plans begun on or after September 23, 2010, are required to include recommended preventative services without payment of a deductible, co-payment or coinsurance. For many Americans, this provision will allow access to important screenings and treatments that might have previously been cost-prohibitive.
Eliminate Medicare Part D Drug Benefit Coverage Gap: The Doughnut Hole
Medicare beneficiaries enrolled in a “Part D” prescription drug plan experience a gap in coverage that occurs once they have used up $2500 of drug payment benefits and before they have spent $4550 in out-of-pocket payments. The Affordable Care Act will help seniors who face this “doughnut hole” gap by gradually phasing in subsidies for medication, starting in 2011. In 2010, a one-time, a tax-free, $250 rebate check will automatically be mailed to Medicare enrollees who qualify based on drug expenditures.
Extend Coverage for Young Adults
Beginning on September 23, 2010, insurance companies are required to permit children who do not have insurance through their employer to stay on their parents' insurance until they turn 26. This applies to all plans in the individual market, new employer plans, and existing employer plans, and applies to both unmarried and married children.
Provide Tax Credit to Small Businesses
To help small businesses shoulder the burden of providing health insurance coverage to their employees, the federal government is offering tax credits to certain small businesses who offer coverage. About 4 million small businesses throughout the country will benefit from this provision, including an estimated 223,000 Texas businesses. Employers must have fewer than 25 full-time employees with average annual wages of less than 50,000, and must cover at least 50% of the cost of health insurance for their employees.
Insure Adults with Pre-Existing Conditions
The Affordable Care Act sets up an insurance pool for uninsured adults (over age 19) who have pre-existing medical conditions. The newly designed federal insurance pool, known as the Pre-Existing Conditions Insurance Plan (PCIP), allows previously uninsured individuals to obtain insurance and pay premium rates equal to standard market rates. Texas has a High-Risk Pool for individuals with pre-existing conditions, but individuals cannot transfer from the state to the federal pool. To qualify for the federal plan, an individual must have been uninsured for at least 6 months. By 2014, insurance companies will no longer be able to refuse coverage to those who have historically been considered un-insurable.
Prohibit Pre-Existing Condition Exclusions for Children under Age 19
Beginning September 23, 2010, all health insurance plans, new or existing, will be prohibited from denying coverage to children under age 19 due to a pre-existing condition.
Prohibit Lifetime Benefit Limits in all Plans
Beginning September 23, 2010, all health insurance plans will be required to eliminate lifetime benefit limits on what are deemed “essential health benefits.” While the full definition of these “essential” benefits has not yet been determined, these will include things like hospital stays and ambulance rides. Health insurance providers will be prohibited from issuing any new plans with lifetime or annual benefit limits after September 23, and existing annual limit requirements will be phased out by 2014.
Prohibit “Rescission” (retroactive cancellation of health insurance)
Effective September 23, 2010, all insurance plans will be prohibited from rescinding, or cancelling, insurance policies when individuals get sick, except in proven cases of fraud.
Review Premium Increases Starting in 2010, states will able to apply for federal grant funds allowing them to annually review insurance plans for excessive premium rate increases. States will report on trends, approve rate increases if justified, and may sanction insurance companies if premium increases are found unjustified.
Strengthen Consumer Appeals Process
New health plans beginning on or after September 23, 2010 must have internal and external appeals processes for coverage and claims denial. Consumers will have the right to appeal decisions made by their health plan directly to the company and also through an independent, outside agent.
Establish State Health Insurance Ombudsman
Starting in 2010, states will be able to apply for federal grant funds available to establish an independent office of the ombudsman. This office will help consumers with insurance-related tasks such as filing complaints and appeals, enrolling in insurance plans, selecting a primary care physician, and taking advantage of their available benefits.
The list of provisions is limited to those that will apply in 2010.
More detailed information about the Affordable Care Act is also available at www.healthcare.gov.
