By Julia Day, MSW
Contributions from Bryon MacDonald
Disability Benefits 101 Information Services
California Work Incentives Initiative; World Institute on Disability
April 5, 2010
In late March of 2010, the U.S. Congress finished passing the Patient Protection and Affordable Care Act (H.R. 3590) and the Health Care and Education Reconciliation Act of 2010 (H.R. 4872). Soon after, President Obama signed these pieces of legislation into law, creating Public Law 111-148 (the Patient Protection and Affordable Care Act) and Public Law 111-152 (the Health Care and Education Reconciliation Act of 2010).
These new laws will result in significant reform of our nation’s health care system, including extending health care coverage to many more millions of Americans.
When a major bill becomes law, it is understandable that you might have questions or concerns about how the changes will affect you. It is important to remember that the changes in the new laws will not happen immediately, but will take effect over a period of years, through 2019.
There will be a lot to learn about the new health care reform laws. We are providing this timeline, showing when major reforms are expected to take effect, so that you can prioritize what to focus on first, and learn the details in stages. We will share more information on the reforms as it becomes available.
Implementation Timeline for Major Health Care Reforms
Within 90 days:
- Starting in late June of 2010, people who can’t get insurance because of pre-existing conditions will have immediate access to high-risk pools that don’t exclude people with pre-existing conditions.
- To apply to a high-risk pool, you must be a U.S. citizen or lawfully present in the United States; have had no health coverage for the last 6 months; and have a pre-existing condition, which will be defined by the U.S. Department of Health and Human Services.
- The law says that older people can’t be charged more than four times what younger people are charged to participate in the plan.
- The law limits premiums to “standard rates”, defined as the average amount private insurers in the state charge for premiums for similar coverage.
- There are limits on annual out-of-pocket expenses for participants in the pools ($5,950 for an individual) and plans have to cover at least 65% of the costs allowed by the plan.
- High-risk pools will most likely be run by the states, and will vary from state to state. Details of how to apply have not been finalized and will be explained in further detail as the program develops.
The creation of high-risk pools is a temporary measure; the pools will end on 1/1/2014, when government-regulated insurance exchanges start operating. By this date, the law also mandates that insurance companies will no longer be able to deny people coverage because of pre-existing conditions.
Within Six Months:
- Insurance companies won’t be allowed to drop people’s coverage when they get sick, or to deny coverage to children under 19 because of pre-existing conditions.
- Insurance companies won’t be allowed to put caps on the amount they will spend on lifetime coverage costs.
- Children will be able to stay on their parents’ insurance policies until they are 26. Right now, health plans often drop children from their parents’ plans when they turn 19 or finish college.
Within a Year:
- Beneficiaries of Medicare’s prescription drug plan who fall into the coverage gap known as the “donut hole” will get a $250 rebate; over time, the law will close the gap, reducing out-of-pocket drug costs for people on Medicare Part D.
- All new group health plans and plans in the individual market will have to provide preventive services, free from deductible or copayment charges.
- People on Medicare will be able to get free prevention and wellness services each year.
- There will be a voluntary long-term care insurance program, known as the Community Living Assistance Services and Support Act (CLASS Act), that helps pay for long-term care costs for people with disabilities and elderly people. The insurance will allow people to receive services in their homes, or will help to pay for nursing home care.
- The Medicaid Community First Choice (CFC) Option will give states the option to allow people with disabilities who are eligible for institutional care to choose community-based services instead.
- People on Medicare who fall within the prescription drug coverage gap (the “donut hole”) will get a 50% discount on brand name prescription drugs.
- Insurance companies won’t be allowed to deny any person coverage because of pre-existing conditions, put caps on the amount they will spend on annual coverage costs, or refuse to renew a person’s policy because of a person’s health condition.
- The law also limits the ability of insurance companies to charge higher rates because of health status, gender, or other factors. Higher premiums will be permitted based on age (no more than three times the amount charged for young people), geography, family size, and tobacco use.
- States will create health insurance exchanges, which will provide a way for individuals and small businesses to buy more affordable coverage. The exchanges will allow people to comparison shop for standardized health packages, and will give tax credits to help people afford coverage.
- Medicaid will expand to cover more low-income people, including adults without children and adults without a disability. The expansion will include people with incomes up to 133% of the Federal Poverty Level (about $28,000 for a family of 4).
- Most employers will be required to provide coverage, or pay a fine if they don’t (although there will be exceptions for small businesses with less than 50 employees). This will make employer-sponsored health coverage more widely available.
- Most individuals will be required to get coverage, or to pay a fine if they don’t. However, there will be healthcare subsidies to help people buy coverage if their income is below 400% of the Federal Poverty Level (about $88,000 a year for a family of 4). If affordable coverage is not available to an individual, they will not be penalized.
- The “donut hole” gap in Medicare Part D drug coverage will be fully phased out, significantly reducing out-of-pocket costs for people on Medicare.
- Health coverage is expected to have expanded to an additional 32 million people by the end of 2019, and to cover 95% of non-elderly legal U.S. residents.
Changes Important for People with Disabilities
Some of the changes brought about by these new laws are of particular significance to people with disabilities:
- By 2014, insurance companies will no longer be able to deny anyone coverage because of a pre-existing condition, or to cancel coverage because of the onset of a new health condition. This will allow people with disabilities more access to private health coverage plans.
- The ban on lifetime coverage caps means that insurance companies cannot stop paying for treatment once they reach a certain dollar amount. Costly treatments for ongoing medical conditions such as cancer, AIDS, or diabetes will be protected from these coverage caps. This ban goes into effect before the end of 2010.
- Medicaid, which provides health care coverage to low-income people, will become more widely available. Since rates of unemployment and poverty are disproportionately high among people with disabilities, it is especially important to people with disabilities that Medicaid is accessible. In addition, people with disabilities will no longer have to go through such a complicated disability determination process to become eligible for Medicaid.
- The Medicaid Community First Choice (CFC) Option will give states the option to allow people with disabilities who are eligible for institutional care to choose community-based services instead. This will allow more people with disabilities who are on Medicaid to stay in their homes, instead of going into an institution. The CFC Option takes effect on October 1, 2011.
- Starting in 2012, the Community Living Assistance Services and Support Act (CLASS Act) provides for voluntary, self-funded, long-term care insurance through the workplace. This insurance will help pay for long-term care costs for people with disabilities. People with disabilities who participate will be able to start receiving cash benefits from this insurance after five years, and they will also be able to use their insurance to provide for their long-term care in the future. This program will make long-term in-home support services more affordable, and will help people with disabilities remain in their homes and communities.
Patient Protection and Affordable Care Act (Public Law 111-148)
Kaiser Family Foundation
The New York Times
Speaker of the House
The National Council on Independent Living
Congressional Budget Office
House Committees on Ways and Means, Energy and Commerce, and Education and Labor
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