What health care reform reforms: Provisions and timeline

Here’s what I could find on what health care reform means in practice (as opposed to in theory), with a time line showing when provisions go into effect. Again, surprisingly difficult to pull together, considering the level of interest and confusion.

As of right now, March 24, 2010

SMALL BUSINESSES
Small Businesses get relief and can start applying for tax credits to buy health insurance for their employees. Small businesses will be entitled to a tax credit for 2009 and 2010, which could be as much as 50% of what they pay for employees’ health insurance. Small businesses that offer health coverage to employees will be eligible for tax credits of up to 50 percent of premium costs.

MEDICARE PART D DOUGHNUT HOLE
Senior citizens on Medicare will get help paying for prescription drugs as the dreaded doughnut hole begins to close. For seniors who have already hit the doughnut hole, $250 rebate checks are on the way.

As of June 21, 2010

PRE-EXISTING CONDITIONS
Americans who are uninsurable because of pre-existing conditions get a path toward health coverage. High risk pools will be set up so they can purchase the insurance they could never get before. Adults with pre-existing conditions may buy into a national high-risk pool until the exchanges come online. While these will not be cheap, they’re still better than total exclusion and get some benefit from a wider pool of insureds. Those high risk pools will be up and running as of June 21, 2010.

As of September 23, 2010

PRE-EXISTING CONDITIONS, MINORS
It will longer be legal for insurance companies to deny children under age 19 coverage for pre-existing conditions.

RECITIVISM
Insurance companies can no longer drop customers for being sick.

CAPS
Insurance companies can no longer impose lifetime limits on benefits.

COVERAGE
Adult children may remain as dependents on their parents’ policy until their 27th birthday.

As of January 1, 2011

PAYOUT
Insurance companies will be required to spend 80-85% of what they take in premiums on actual medical care. If they don’t they will owe the difference in the form of a rebate.

PREVENTIVE CARE
Medicare patients will start receiving free preventive care — no copays.

As of January 1, 2014

THE EXCHANGE
Health option exchanges will be administered by either a government agency or a nonprofit organization. To contact the exchange, there will be national call centers. For the most part, however, their design is up to the states.

The exchanges would inspect offered policies to make sure they meet government standards and that plans are “in the interest” of buyers, according to the guidelines of the healthcare reform bill.

Exchanges are prohibited from setting premiums. They can, however, ask insurers to justify rate hikes – and if they’re unsatisfied with the answer can use price as a reason to exclude that particular plan from the group of insurance prodcuts.

There will be four levels of plans offered, labeled “platinum,” “gold,” “silver,” and “bronze.”

Individuals can purchase health insurance outside the exchanges. An insurer would have to charge the same rates outside the exchange as it does inside, for comparable plans, in order to remain on the exchange.

The exchange is not available to people who work for a medium or large company, or if your employer offers health insurance benefits. If you lose your employer-related insurance, however, you will be able to move seamlessly into the exchange.

COVERAGE
Insurance companies will not be able to impose annual limits on coverage.

It will longer be legal to deny anyone coverage because of pre-existing conditions.

Waiting periods for coverage may not exceed 90 days.

PREMIUMS AND PENALTIES
Premiums would be capped at a percentage of income, ranging from 3 percent of income to as much as 9.5 percent. People of any age who cannot find a plan that costs less than 8 percent of their income would be allowed to buy a catastrophic policy otherwise intended for people under age 30.

Penalties for the insurance mandate will kick in, but it is unclear how strict the enforcement of that penalty would actually be. There will be no criminal penalty for not buying insurance, nor will there be criminal penalties for not paying the penalty. (Makes one wonder how enforceable this provision will be.)

The first year, consumers who did not have insurance would owe $95, or 1 percent of income, whichever is greater. But the penalty would subsequently rise, reaching $695, or 2 percent of income. Families who fall below the income-tax filing thresholds would not owe anything. Nor would people who cannot find a policy that costs less than 8 percent of their income.

As of January 1, 2018

PREVENTIVE CARE
Insurance plans must cover preventive services for all customers, not just medicare customers, without co-payments or deductibles.

TAXES
A new excise tax will apply to insurance plans that cost more than $10,200 for an individual or more than $27,500 for a family.

SMALL BUSINESSES
Employers with 50 or fewer workers would be exempt from coverage provisions. For firms with more than 50 employees that do not offer health insurance as a benefit, if at least one full-time employee gets a subsidy from the federal government to purchase health insurance on his or her own, the company will have to pay a penalty fee of $2,000 for every full-time worker. One final item: if you’re a firm with more than 200 employees, and you do offer health insurance, you would have to automatically enroll your workers in the plan. They could opt out of the coverage. But they are the ones that would have to make that decision

Still checking the timeline on the provisions below. I will update as I read through the sources.

COMMUNITY HEALTH CENTERS
Community centers are slated to receive $11 billion additional funds for medical staff and expansions of buildings and services.

EXPANDED MEDICAID
More lower-income individuals under age of 65 will be covered . Medicaid eligibility expands to 133 percent of the poverty level — $29,327 for a family of four. This is likely to encourage more people to seek preventive care from community centers.

TAXES
More than $400 billion in higher taxes will be raised over a decade, roughly half of it from a new Medicare payroll tax on individuals with incomes over $200,000 and couples over $250,000.

OVERSIGHT
Requirement that all insurers must post their balance sheets on the Internet and fully disclose administrative costs, executive compensation packages, and benefit payments.

EMPLOYER COVERAGE People who receive coverage through large employers would be unlikely to see any drastic changes, nor should premiums or coverage be affected. But almost everyone would benefit from new regulations, like the ban on pre-existing conditions that would apply to all policies come 2014.

There might even be cases where people would be eligible to buy insurance through an exchange instead of through their employer, Professor Jost said: those who must pay more than 9.5 percent of their income for premiums, or those whose plans do not cover more than 60 percent of the cost their benefits.

CHANGES IN MEDICARE One of the biggest changes involves the Medicare prescription drug program. Its unpopular “doughnut hole” — a big, expensive gap in coverage that affects millions — would be eliminated by 2020. Starting immediately, consumers who hit the gap would receive a $250 rebate. In 2011, they would receive a 50 percent discount on brand name drugs.

HIGH-COST INSURANCE Starting in 2018, employers that offer workers pricier plans — or those with total premiums of $10,200 or more for singles and $27,500 for families — would be subject to a 40 percent tax on the excess premium, said C. Clinton Stretch, managing principal of tax policy at Deloitte. Retirees and workers in high-risk professions like firefighting would have higher thresholds ($11,850 for singles, or $30,950 for families), pegged to inflation.

Although the taxes would be levied on the insurer, experts expect the assessment to be passed on to the consumer in the form of higher premiums or reduced benefits.

Sources:

The Patient Protection and Affordable Care Act, Immediate Benefits
The Rachel Maddow Show
Ten immediate benefits of HCR
For Consumers, Clarity on Health Care Changes
Obama Has Signed the Bill. Now What?
Big Medicaid changes loom under health-care reform
When health care provisions take effect
Health care reform bill 101: What the bill means to you