Health Care Reform Posted: August 6th, 2010

The Affordable Care Act has many reforms to health insurance and health care that are phased in over several years. Follow the time line to learn when many of the initiative go into effect.

Health care reform: A timeline of the changes that affect you

Health care reform was enacted in 2010, but many of the changes may not actually affect you for years--especially if you have group health insurance coverage through your job. Figuring out what's going to happen and when is proving to be a moving target as several changes have already been made since the bill was first implemented. The actual health care bill, signed into law on March 23, 2010, is more than 2,000 pages, so figuring out what it all means for you and your family can be confusing.

This timeline should provide overview of the most significant changes that directly affect you.

2010

In 2010 Medicare rebate checks were remitted to seniors who qualified for the subsidy. Those on Medicare's prescription drug plan, whose initial benefits run out, receive a one-time $250 rebate. The Medicare rebate is designed to help cover the so-called Medicare "Donut Hole." More discounts and subsidies to fill the Medicare gap in coverage are to be phased in through 2020.

In July 2010, each state must create a high-risk health insurance pools. The state-sponsored high-risk pools provide immediate access to medical coverage for those who are unable to purchase health insurance because of pre-existing conditions. The out-of-pocket expenses are capped at $5,950 for individuals and $11,900 for families, excluding premiums. Medical insurance coverage through high-risk pools is available through 2014.

On Sept. 23, 2010, new rules affecting health insurance coverage and health insurance companies go into effect:

• New plans now have to cover a number of preventive services like mammograms and colonoscopies for free. No deductible, co-payment or coinsurance.
• Health insurance coverage can no longer be rescinded--meaning that coverage cannot be canceled when people get sick.
• Coverage cannot be denied to children with pre-existing conditions.
• Insurers cannot place lifetime caps on coverage. Any annual limits imposed on coverage are sharply restricted.
• Adult children become eligible for coverage as dependents on their parents' polices until age 26.
• New plans must include a way to appeal coverage determinations or claims. An external review process must be established.
• Lifetime dollar limits on essential benefits, like hospital stays, are no longer allowed.

See the complete Health Care Reform Timeline 2010.

2011

In 2011, another set of reforms go into place. The laws enacted under health care reform legislation that go into effect Jan. 1, 2011 include:

• Seniors who fall into the Medicare "Donut Hole" receive a 50 percent discount on Medicare Part D covered brand-name prescription drugs.
• Medicare offers some free preventive care, like annual wellness visits with no co-payments.
• Individual health insurance plans and small-group insurance plans must spend 80 percent of premiums on medical services, while large group plans have to spend at least 85 percent. Before the passage of the Affordable Care Act, the average spent on medical services was 74 percent. If insurance companies don't meet the levels outlined in the legislation, rebates must be sent to consumers.

Initiatives that begin on Oct. 1 2011:

• The Community First Choice Option gives states the option of treating disabled persons using Medicaid at home and through community-based services, instead of just at nursing homes.

See the complete Health Care Reform Timeline 2011.

2012

Most changes in 2012 take place in health care administration, focusing on streamlining administrative issues, data collection, and physician quality outcomes. However, on Oct. 1, 2012, a voluntary long-term insurance program--called CLASS--begins and is meant to provide cash benefits to adults who become disabled.

See the complete Health Care Reform Timeline 2012.

2013

In 2013, families who make $250,000 or more ($200,000 or more for individuals) must pay higher Medicare payroll taxes, according to the New York Times and the Kaiser Family Foundation. Unearned income for those in this group is also taxed in 2013.

Other changes in 2013 include:

• New rules for flexible spending accounts (FSA). FSAs are to be limited to $2,500 in contributions and adjusted yearly for the cost of living-- these plans will not allow reimbursement for over-the-counter medications. The threshold for deducting out-of-pocket medical expenses on your taxes rises from 7.5 percent of income to 10 percent. (People over age 65 remain at the 7.5 percent deduction threshold through 2016.)

• Starting Jan. 1, 2013, Medicaid programs receive new funding to cover preventive services meaning more access for more patients.

See the complete Health Care Reform Timeline 2013.

2014

On Jan. 1, 2014, many of reforms enacted under the Affordable Care Act are scheduled to take place:

• Annual limits on coverage are no longer allowed for new plans and existing group plans.
• Most individuals are required to buy health insurance, and most employers must provide medical insurance coverage to workers--both groups face penalties for non-compliance. American Indians, those with religious objections and those who would face financial hardship are exempt. If you would end up paying more than 8 percent of your income for health insurance, you won't be subject to penalties for deciding against the purchase of health insurance coverage.
• You have the option to buy health insurance through state-run insurance marketplaces called exchanges. If you have health coverage through your employer but your policy covers less than 60 percent of costs, or you pay more than 9.5 percent of your income to get that coverage, you can buy subsidized coverage.
• If you still can't afford the insurance coverage offered by your employer, you can take the funds your employer would have contributed to the group plan and use them to buy potentially cheaper health insurance from the exchange.
• Families with income levels up to 400 percent of the federal poverty level (about $43,000 for an individual or $88,000 for a family of four) earn subsidies to buy health insurance.
• Families who earn less than 133 percent of the poverty level (about $14,000 for an individual and $29,000 for a family of four) can enroll in Medicaid.
• Insurance companies are banned from charging higher premiums because of a person's sex or pre-existing condition.
• Small-group deductibles are limited to $2,000 for individuals and $4,000 for families. Contributions can be offered to offset any costs above these amounts.
• Waiting periods for coverage are capped at 90 days.
• The out-of-pocket maximum that Medicare Part D enrollees pay for catastrophic coverage should be lowered.

See the complete Health Care Reform Timeline 2014.

2015 and beyond

Beyond 2014 the following changes are slated to take place

• In 2015 a provision that pays physicians based on quality of care, rather than on the volume of patients seen, goes into effect. Those physicians who provide higher value care will receive greater compensation than those providers who provide lower quality care.
• Beginning in 2016 states can choose to form health care choice compacts, which allow health insurance companies to sell policies to consumers in any state participating in the compact.
• In 2018, a 40 percent excise tax on high-end policies is imposed. These policies have annual premiums of $10,200 for individuals and $27,500 or more for families. It is uncertain whether the beneficiaries of these health insurance policies may have to pay the cost of the "Cadillac plan" tax passed on to them, or if insurers and plan administrators will absorb the costs.

The overall goal of the reform--to expand coverage to 32 million people--should be in place by 2019.

More health care reform articles:

• Consumer Reports: 'Junk' health insurance plans still a problem
  
• A guide to health care reform changes to Medicare
• Health care for kids: 4 things your health plan must fully cover
  
• Early retiree reinsurance program
• "Grandfathered" health insurance plans allows for consumer choice
• Health care reform and the individual mandate
• How health care reform impacts those with pre-existing conditions
• Preventive health care coverage under the health care reform law
• Understanding the health care reform Patient's Bill of Rights
• What expectant mothers should know about health care reform
• What you should know about health insurance exchanges
• Your small business and health care reform