March 22, 2010 -- The yearlong, often ugly journey toward health care reform reached a historic milestone late Sunday night, with the House approving legislation that would extend coverage to 32 million more Americans and impose new restrictions on the insurance industry.
Here are answers to some frequent questions about what reform will mean to consumers:
What provisions begin soon?
Starting this year, children up to age 26 would be allowed to remain on their parents' health plan. People with pre-existing medical conditions would be eligible for a new federally funded "high-risk" insurance program. Small businesses could qualify for tax credits of up to 35% of the cost of premiums. Insurance plans would be barred from setting lifetime caps on coverage and would no longer be able to cancel policies when a patient gets sick. Health plans would also be prohibited from excluding pre-existing conditions from coverage for children.
When do the main reform changes kick in?
In 2014. That’s when insurance marketplaces, or exchanges, would be set up in states to offer competitive pricing on health policies for individuals and small businesses that don’t have coverage. People with a pre-existing condition would no longer be denied coverage, and all lifetime and annual limits on coverage would be eliminated. Medicaid would be expanded to cover more low-income Americans.
What are the requirements for individuals to buy insurance?
Starting in 2014, a person who did not obtain coverage would pay a penalty of $95 or 1% of income, whichever is greater. That penalty would rise to $695 or 2.5% of income by 2016. The bill would exempt the lowest-income people from that insurance requirement.
Medicaid would be expanded to cover those under age 65 with an income of up to 133% of the federal poverty level (below $29, 327 for a family of four).
To make coverage more affordable, the legislation would offer premium subsidies for people with incomes more than 133% but less than 400% of the federal poverty level ($29,327 to $88, 200 for a family of four).
In addition, people in their 20s would have the option to buy a lower-cost "catastrophic" health plan.
How will small employers be affected by the changes?
Employers with 50 or more workers would face fines for not providing insurance coverage. Businesses with smaller workforces, though, would be exempt. Companies would get tax credits to help buy insurance if they have 25 or fewer employees and a workforce with an average wage of up to $50,000.
I’m covered by a large employer. How will it affect me?
Large employers would run their health plans as they do now, so there won’t be much change. Even though they have more insurance-buying clout, large businesses have seen steadily rising insurance premiums over the past decade without reform, as medical costs have increased. That pattern isn’t likely to change much, at least immediately.