Why discuss health care in a family law blog? A person’s mental and physical health has a huge impact on their life. Anyone who has been ill themselves or had an ill family member knows that the entire family is affected; not only by the illness and care involved, but by the expense as well.
As we all know, the U.S. Congress passed a significant health care reform proposal. Health care reform, known as “Obamacare”, or by its official name, the Patient Protection and Affordable Care Act (“ACA”), was signed into law on March 23, 2010. Now that this is the law, how will the ACA affect you?
In 2008, the total spent on health care costs in America was $2.3 trillion dollars or $7,681 per person. Between 1965 and 1985, U.S. health care spending (adjusted for inflation) more than tripled; then it nearly tripled again between 1985 and 2005.
In general, the goal of the ACA is to make health insurance available to more people and to lower costs overall. The ACA will 1) require Americans to have health insurance, 2) create state-based health insurance exchanges, 3) require employers to pay penalties if certain requirements are not satisfied, and 4) expand Medicaid. The exchanges are not expected to be effective until 2014; however, there are many parts to this act, and some are starting now.
One of the first things you need to determine regarding your own health care plan is whether or not it is a Grandfathered Health Plan. If you are not in a Grandfathered Plan, then either you are in a New Health Plan, or you are not covered by any plan. A Grandfathered Plan does not have to comply with all of the ACA requirements, whereas a New Health Plan does.
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A Grandfathered Health Plan
1. Must have continuously covered someone since March 23, 2010,
2. May not apply for a new policy, certificate or contract of insurance, and
3. Must disclose that it is a Grandfathered Health Plan.
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If the plan meets the criteria to be a Grandfathered Health Plan, the plan
1. Cannot Significantly Cut Or Reduce Benefits (Example – plan decides not to cover diabetics);
2. Cannot Raise Co-Insurance Charges (Example – patient pays first 20%);
3. Cannot Significantly Raise Co-Payment Charges (Example – $20 a doctor visit);
4. Cannot Significantly Raise Deductibles.
5. Cannot Significantly Lower Employer Contributions Towards the Cost of Medical Insurance.
6. Cannot Decrease the Annual Limit of What the Insurance Company Pays.
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If your employer changes insurance providers each year, then you will be in a new Health Plan.
The differences between what a Grandfathered Plan and a New Health Plan are required to offer under the ACA are noted in the chart below:
Some of the other provisions of the ACA that take effect in 2010 are as follows:
• Small Business Health Insurance Tax Credit to help provide insurance benefits to workers.
• Rebates for the Medicare Part D “Donut Hole” in amount of $250.
• Preventing disease and illness – through a $15 billion Prevention and Public Health Fund to invest in programs to keep Americans healthy.
• Cracking down on health care fraud.
• Providing access to insurance for uninsured Americans with a pre-existing conditions – provides new coverage options.
• Expanding coverage for early retirees who are not yet eligible for Medicare – provides financial help for employment-based plans to continue coverage.
• Allowing states to cover more people on Medicaid – through federal matching funds.
• Strengthening the health care workforce – by providing funding for scholarships and state loan repayments for primary care doctors and nurses working in underserved areas.
• Holding insurance companies accountable for unreasonable rate hikes.
• Strengthening community health centers – new funding to construct and expand services at community health centers.
• Consumer Assistance Grants Program – to help states establish consumer assistance offices to pick from coverage options and improve consumer information through the internet.
• Expanding the Adoption Credit and Adoption Assistance Programs
• New Indoor Tanning Services Tax
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In 2011, a number of additional provisions to aid seniors will take effect.
Those are
1. Prescription drug discounts of 50% for those who reach the “donut hole”.
2. Providing free preventive care such as annual wellness visits.
3. Improving care after leaving a hospital by coordinating with community services.
The ACA may affect you in other ways starting in 2010 depending upon your circumstances. For example, if you are a small business owner, you may obtain a tax credit to offer insurance or assistance to cover early retirees. A medical professional who works in an underserved area may obtain assistance with loan payments. If you are a senior on Medicare Part D who fell into the medication “Donut Hole”, you will receive an additional $250 to assist you with paying for medication. If you use indoor tanning services, you will pay a new tanning services tax.
The ACA is a complicated law with several provisions that will be taking effect over many years (unless parts are repealed or changed after this next election). So whether or not you are in a Grandfathered Plan or a New Health Plan, certain coverage will be guaranteed. The hope is that these changes will make it easier for consumers and their families to receive the treatment they need.
The Department of Labor has excellent information on its website. Take advantage of it to find out how this law affects you and your family.
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