Medical insurance: facts on new laws

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The health care reform bill that President Barack Obama signed into law last year has already brought sweeping changes to the medical insurance industry. While provisions stemming from the bill are still rolling out, some significant changes took effect Sept. 23, 2010.

For instance, insurance companies can no longer rescind a policy if something wasn’t disclosed on an application, although there is an exception for fraud.

Also, children with pre-existing conditions cannot be denied medical insurance coverage. This applies to children up to the age of 19. Unfortunately, it only applies to new plans and policies beginning a new plan year. After that, children can remain on their parents’ health insurance plans until age 26, which is important coverage for college students.

People with serious illnesses scored another victory as lifetime caps on coverage have been eliminated. The only bad news is that this action will result in modest premium increases for those with significant illnesses.

Another change is that people can get free preventive care. Immunizations are now covered as well as screenings for high blood pressure, diabetes and high cholesterol.

If these aren’t the medical insurance reforms you’re looking for, be patient, so to speak. More are on the way in 2011. For example, brand-name drugs in the Medicare Part D coverage gap will be discounted by 50 percent. (There will be more discounts phased in every year until 2020.) States will be able to expand Medicaid rolls to include those made eligible by health care reform.

Unfortunately, not all of the changes to medical insurance are for the better. There are more restrictions on how you can spend money in your flexible spending account, or FSA, money you set aside to defer taxes. Starting this year, you can’t spend your FSA money on over-the-counter medical supplies for which you don’t have a prescription.