Got Health Insurance? What Health Reform Means

If you have health insurance (including Medicare or Medicaid) now, health reform will still affect you. Here's how.

From the WebMD Archives

The new health reform law will bring about sweeping changes to the American health care system, not the least of which involves extending health insurance coverage to millions of Americans that have previously gone without.

People who already have health insurance will also see changes and added consumer protections.

Here's a rundown of what to expect, and when, based on your situation.

Everyone

Starting Sept. 23, 2010:

  • Insurers can’t drop you. Stories of insurers hunting through applications for errors (often honest mistakes) as a way to deny coverage will be a thing of the past. Insurance companies will now have to prove you knowingly lied about the state of your health on your application before giving you the boot -- a practice called rescission. So, if you have insurance coverage, it’s yours to keep. This takes effect at the beginning of a health plan's new year. For most people, that means January 2011.
  • Right to appeal. If your insurer denies a claim or won’t pay for treatment your doctor says you need, you're entitled to two different types of appeals: internal (your insurer reviews your case) and external (handled by an independent decision-maker).

Information about how to appeal should be easily found in your health plan materials. Instructions must also be sent to you when your insurer denies a claim.

If you haven’t gotten the information, get help from your state’s insurance commissioner’s office. You can also look for state advocate contact information on the nonprofit Family USA's web site.

Note: This doesn't apply to plans that were in effect or offered by an employer when health reform became law on March 23, 2010. Those plans are grandfathered unless they make major changes to copayments, deductibles, out-of-pocket limits, co-insurance, or other elements of the benefit package. Details are on Families USA’s web site.

  • Preventive care covered. New health plans starting on or after Sep. 23, 2010 must pay in full for preventive care (grandfathered plans in the group and individual markets are exempt).That means blood work to check for conditions such as diabetes and high blood pressure; cancer screenings (such as colonoscopies and mammograms); vaccines; and well baby and child visits are all free. No copayments or deductibles apply.

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For a full list of the preventive services insurers must cover under the new law, check healthcare.gov.

  • No more lifetime maximums. In the past, people who hit their lifetime spending caps essentially became uninsured for the very illness for which they most needed coverage. Now, all health plans starting on or after Sept. 23 are prohibited from capping lifetime spending for necessary services like hospital stays. That’s a big deal for people being treated for serious illnesses, such as cancer, which can get very costly very fast.
  • No more annual maximums. Limits on yearly spending for medical care will be restricted for new health plans in the private market (where people buy health insurance on their own) and all group health plans, including those that are grandfathered.
  • ER costs limited. You don't need prior authorization for emergency care to be covered if you sign on to a plan starting on or after Sept. 23 (this doesn’t apply to grandfathered plans). And if you go to an ER out of your insurer’s network -- quite common in an emergency situation -- you can't be charged more than what you would have been charged by an in-network hospital.
  • Direct access to OB/GYNs. Women with a new health insurance plan starting on or after Sept. 23 don't need a referral from their primary care doctor to see a gynecologist. This doesn’t apply to grandfathered health plans.

Coming in January 2014:

  • New coverage options. Health insurance exchanges will provide a marketplace where small businesses and people who don’t get health insurance through their employer can shop for plans. The exchanges will offer the full range of private and public health insurance options available to them in their state.
  • Help paying for coverage. For people making $43,000 or less, or families of four making less than $88,000, the government will subsidize premiums -- the monthly payment you make to insurers for coverage -- for health plans purchased through health insurance exchanges. You’ll pay anywhere from 2% to 9.5% of your income for health insurance, and the government will pick up the rest. Reduced copayments, coinsurance, and deductibles may also apply to assist with coverage cost. Also, the new law states that the cost of premiums can be no more than three times as expensive for older people than for younger people.

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Young Adults and Children

Starting Sept. 23, 2010:

  • Children with pre-existing conditions can’t be denied. Insurers can no longer deny care related to a pre-existing health condition for children younger than 19. This applies to new and grandfathered plans in the group market (the insurance you get from your employer). But it doesn't apply to people who have existing plans they bought on their own in the individual market.
  • Parental coverage until 26. Adult children who don’t have insurance through a job of their own can stay on their parents’ health plan until age 26. Some employers offered this benefit as soon as health reform became law; others lagged. Although employers typically hold open enrollment for health care plans in the fall, those choices take effect in January. That leaves a couple of months before your young adult is covered. "We're seeing a lot of kids now who are in that window," says Carrie McLean, consumer specialist with eHealthInsurance.com.

Retirees and Seniors

Already in effect:

  • Rebates to close the “donut hole." Starting in June, the government began mailing $250 checks to Medicare recipients who hit the “donut hole,” or the gap in coverage for prescription medications.

The government expects about 4 million people to hit the donut hole in 2010. According to Ross Blair, CEO of Plan Prescriber, a site that helps people on Medicare compare Medicare Advantage plans (Medicare coverage administered by a private insurer), this gap in coverage exposes many seniors to thousands of dollars out of pocket each year.

Checks will continue to be sent throughout 2010. You don’t have to apply. The government tracks prescriptions filled and will automatically mail a check, which typically arrives four to six weeks after reaching the gap in coverage.

  • Early retiree coverage. People who retire and give up employer-sponsored health insurance before they're old enough for Medicare are often left without affordable health plan options. Until the health exchanges launch in 2014, businesses willing to extend coverage to workers (and their dependents) who retire between the ages of 55 and 65 will be reimbursed by the government to offset the cost of doing so.

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Businesses aren't required to offer this. The government has made public a list of employers currently participating in the Early Retirement Reinsurance Program. You can check healthcare.gov to see if your employer is among them.

Coming later:

  • Half off brand-name drugs in the donut hole. Brand-name prescription drug users face extremely high costs once they hit the donut hole. Relief will soon be available; the government will pick up 50% of the cost of branded drugs. Starts: Jan. 1, 2011.
  • No more donut hole. Each year following 2011, seniors will pay an increasingly smaller proportion of their drug costs until the prescription coverage donut hole is completely eliminated. Starts 2020.
  • Free preventive care. Copayments and deductibles will be completely eliminated for seniors getting annual check-ups, routine blood work, and other types of preventive care. Starts Jan. 1, 2011.

Low-Income

Already in effect:

  • You won't be dropped. If you are an adult with Medicaid coverage, you won't be cut from the program as long as you continue to meet the financial eligibility requirements. States can get additional federal matching funds by expanding eligibility for low-income families. Started April 1, 2010.
  • Children on Medicaid can’t be cut. States are required to maintain current levels of Children’s Health Insurance Program (CHIP) coverage through 2019. The program provides health benefits for low-income kids. Started March 23, 2010.

Coming later:

  • Improved preventive care. States will receive additional funding from the federal government if they offer preventive services to Medicaid recipients at no cost. Starts Jan. 1, 2013.
WebMD Feature Reviewed by Laura J. Martin, MD on September 08, 2010

Sources

SOURCES:

Healthcare.gov

Families USA: "Grandfathered Plans under the Patient Protection and Affordable Care Act."

Kathleen Stoll, director of health policy, Families USA.

Carrie McLean, consumer specialist,eHealthInsurance.com.

Kaiser Family Foundation: "Summary of New Health Reform Law."

Ross Blair, CEO, Plan Prescriber.

The National Council Healthcare Reform Implementation Timeline - Medicaid Provisions.

 

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