What's coming in health care reform?

By Constance Gustke Posted : 11/22/2010

What's coming in health care reform now?Confused by health care reform? You're not alone. Dozens of reform changes - some big, some small - are set to ripple across the health insurance system through 2014.

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During the next few years, seniors will see cost-saving changes. Benefits like wellness visits, drug discounts and in-home Medicare services will be rolled out.

But the next biggest wave hits in 2014, when insurance exchanges go into effect for everyone. At that time, most U.S. citizens must have health insurance. Those who opt to remain uncovered will be penalized.

Here's a run-down of key changes you should know about:

2011

  • Medicare donut hole narrowed. People with Part D coverage will get a 50 discount on brand-name drugs and a 7 percent for generic drugs when they fall into coverage gaps. About 4 million seniors fall into this niche, according to the U.S. Department of Health and Human Services. Drug discounts increase every year until 2020, when the donut hole disappears.
  • No cost for Medicare preventive care. People with Medicare no longer make co-pays or pay deductibles for annual wellness visits, including personal prevention plans and physicals.
  • Lid placed on insurance company rate hikes. Premium price increases must now be justified by insurers if they're considered excessive according to a formula known as the minimum medical loss ratio. Insurers who exceed this cap must give rebates to policyholders.
  • Health savings plan reimbursements cut. People enrolled in company health savings plans, flexible savings accounts or health savings accounts won't be reimbursed for over-the-counter medications. Prescribed medicines still qualify, though.
  • Nutritional labeling becomes mandatory. Food items sold at chain restaurants or in vending machines must now be labeled with nutritional content.
  • In-home Medicare services offered. High-need patients will now be given primary care service in their own homes rather than nursing homes.

2012

  • More long-term care options for disabled. A new program called CLASS gives disabled people help via cash benefits. It is scheduled to begin no later than Oct. 1, 2012.

2013

  • Additional closing of Medicare donut hole. More federal subsidies for brand-name prescriptions named in Part D of Medicare rollout. Co-insurance payments are further reduced until reaching 25 percent in 2020.
  • Higher ceiling for medical deductions. The threshold for itemized deductions for unreimbursed medical expenses goes from 7.5 percent of adjusted gross income to 10 percent. The exception: people over age 65, who remain at 7.5 percent through 2016.
  • Flexible spending account limit raised. Contributions to a flexible spending account are limited to $2,500 annually; adjustments are tied to inflation thereafter.
  • Nonprofit medical plans launched. Nonprofit, member-run insurance companies start to form as part of the government's Consumer Operated and Oriented Plan program.

2014

  • Individual health insurance required. Most U.S. citizens are required to have health insurance or face phased-in penalties.
  • Medicaid coverage expanded. People under the age of 65 who are not eligible for Medicaid now qualify if their incomes are 133 percent of the federal poverty level.
  • Health insurance exchanges. State-based health insurance exchanges will allow individuals and small companies to buy health insurance through competitive marketplaces. (A few states, like California, already have started exchanges.)
  • Health insurance coverage guaranteed. Newly issued or renewed health insurance coverage is guaranteed regardless of pre-existing conditions. Also, insurers can't charge higher rates for gender or health status.
  • Financial help available for premium costs. Tax credits or cost sharing for health insurance will be available to people within specific income guidelines.
  • Annual limits on coverage removed. Caps on annual dollar limits for individual coverage are lifted.
  • Basic insurance plan created. Uninsured individuals with incomes 133 percent to 200 percent of the federal poverty line can receive basic health insurance.

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