insurance

Health care reform: What's in it for you

Highlights
  • An additional 32 million people are expected to get insurance coverage.
  • Exclusions for pre-existing conditions are a thing of the past.
  • Rescissions of existing policies due to customers' illness are banned.

Now that the nation's broadest health insurance reform since the establishment of Medicare has won approval on Capitol Hill, you may be wondering: What exactly is going to change, and when?

The cost of health care
Costs per person including premiums and out-of-pocket expenses
Source: Hewitt Associates.

The health care reform legislation is expected to provide coverage to an additional 32 million people, raising the proportion of insured Americans to 95 percent. The Congressional Budget Office estimates the final health care reform bill will cost $940 billion over 10 years and reduce the federal deficit by $138 billion over the same period, with another $1.2 trillion reduction over the following decade.

Here's a timeline for the implementation of some key provisions, based on summaries prepared by the House committees on Ways and Means, Energy and Commerce, and Education and Labor.

2010

Uninsured individuals can access health coverage without exclusions for pre-existing conditions.

Insurance companies can no longer refuse coverage of children because of pre-existing conditions.

Health plans that cover dependent children must extend that coverage up to age 26.

Lifetime limits on benefits and rescissions of existing policies because of customers' illness are banned.

Medicare recipients caught in the Part D prescription drug coverage gap -- the so-called doughnut hole -- will receive a $250 rebate.

2011

Brand-name drugs in the Medicare Part D coverage gap are discounted by 50 percent.

Medicare Advantage payments are frozen at the 2010 level.

Medicare beneficiaries begin receiving free annual wellness visits and certain other preventive care benefits without incurring co-payments.

2012

A phased-in reduction of Medicare Advantage payment benchmarks relative to current levels begins.

2013

Contributions to health Flexible Savings Accounts are limited to $2,500 per year.

The income threshold for claiming the itemized deduction for medical expenses rises from 7.5 percent to 10 percent.

2014

Most individuals are required to get health insurance or face a penalty that starts at $95 in 2014 and will increase to $325 in 2015 and $695 or up to 2.5 percent of income (maximum of $2,085 for a family) in 2016 and subsequent years.

State-based health insurance exchanges are established to allow individuals and small businesses to compare and purchase standardized private insurance plans.

Premium tax credits become available through the exchange for people who cannot get acceptable coverage elsewhere and whose incomes are above the level for Medicaid eligibility and below 400 percent of the federal poverty level (up to $88,000 for a family of four).

Group insurance plans are banned from excluding pre-existing conditions.

Employers with 50 or more workers who opt not to provide health coverage, and who have at least one employee who is receiving a tax credit for buying insurance, will pay an annual fee of $2,000 for each full-time employee. However, the first 30 employees will not be counted in the calculation of the fee.

2018

An excise tax on high-cost health plans kicks in. The tax applies to insurance that costs more than $27,500 annually for a family and $10,200 for an individual. For retirees and workers in high-risk professions, the thresholds rise to $30,950 for families and $11,580 for individuals.

2020

The pharmaceutical manufacturer's discount on brand-name drugs for Medicare recipients rises to 75 percent, thus completely closing the "doughnut hole."

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