National Consumers League


NCL Health Issues

Giant leap for health care

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After generations of work, and nearly one full year of public debate, health care reform took one giant leap forward with President Obama’s signing the Patient Protection and Affordable Care Act on March 23, and a package of fixes to the new legislation on March 30.

Health care reform is a long standing passion of the National Consumers League. Florence Kelley – NCL’s leader for the first 32 years – worked for passage in 1921 of the Sheppard-Towner Maternity and Infancy Protection Act, which for the first time allocated federal funds for health care. Later, Josephine Roche, NCL’s president in the late 1930s, wrote the first universal health care legislative proposal while a member of FDR’s administration. Medicare and Medicaid were borne out of Josephine Roche’s hard work and commitment to making America a better place to live and work.

Now that we have entered into a new era of health care, what does it mean for consumers? Read the following Q and A to find out how you and your family might be affected by the new law.

Q: I’m a 24 year old without health insurance. Can I now be covered under my parents’ health plan?

A: Yes. Young adults will be allowed to stay on their parents’ plan until they are 26, if they are unmarried and not offered coverage through their work. This change, effective 6 months from the bill’s enactment, is a switch from current state rules that often cut off coverage at age 18.

Q: If I get sick, can my insurance company refuse to cover me or set life time limits on my medical coverage?

A. No. Health insurers will not be able to remove someone from the plan when they get sick, cannot place lifetime limits on medical coverage, or rescind policies for any reason other than fraud. These restrictions will become effective 6 months from enactment of the bill.

Q: I don’t have insurance now because of a medical problem. Will the new law make it easier for me to get insurance?

A: Yes. Within 90 days of the bill becoming law, there will be a temporary high risk insurance plan for people with medical problems who have been without insurance for at least six months.

And starting in 2014 health plans will be prohibited from denying health coverage to people based on their health status or because they have certain conditions – like asthma or diabetes. Health plans will not be able to charge more based on health status or gender.

Q: If my child has a pre-existing condition can they be denied coverage?

A: No. Beginning immediately, plans can no longer deny health insurance to children with pre-existing health conditions.

Q: Will I be required to buy health insurance?

A: Yes, unless you wish to pay a penalty. Most Americans will be required to have insurance by 2014; should they choose not to obtain insurance, they will need to pay a penalty. There are exemptions from this requirement (or individual mandate), including financial hardship or religious beliefs. The penalty would start as low as $95, or up to 1 percent of income, whichever is greater; the penalty will rise to as high as $695, or 2.5 percent of income, by 2016. The individual mandate to have health insurance is critical to making the system work. Unless everyone, including the healthy, participates in the insurance market, the insurance industry cannot keep the costs of the system – including individual premiums we will all be paying – in check.

Q: Can I continue to get insurance through my employer?

Yes. You will be able to keep your current insurance coverage. There is no language in the new law that would require you to change your current coverage. If the law works as planned, your current health insurance will be strengthened with more preventive services and you'll be protected from previous punitive policies, like caps on medical coverage.

Q: I own a small business. How will I be affected?

A: It depends on the size of your business. There is no requirement that an employer with less than 50 employees must provide insurance.

If you own a small business of fewer than 25 employees and choose to offer coverage , and the average employee salary is less than $25,000-$50,000, you will qualify – immediately – for tax credits to help provide coverage. In 2014, employers will receive tax credits of up to 50% of their insurance costs.

Beginning in 2014, if you have more than 50 employees and do not offer coverage you will have to pay a penalty.

Q: What is this insurance exchange I keep hearing about?

A: The insurance exchange, available in 2014, will be a marketplace where individuals can pool their purchasing power to buy health insurance. It will provide affordable, high-quality insurance options to those unable to get insurance through an employer or unable to afford insurance on the individual market. In addition to individuals, small businesses will also have access to the insurance exchange.

Q: I am on Medicare – how will the law affect me?

A: If you have prescription drug coverage, the doughnut hole – the big gap in coverage - will eventually be eliminated. Starting immediately, seniors who enter the “hole” in coverage will get a $250 rebate. By 2020 the gap will be eliminated, so that seniors who now pay 100% of their drugs costs when they hit the “hole” will pay only 25%.

If you have a Medicare Advantage plan (the private plan part of Medicare), you may see some changes. To reduce wasteful spending, the government will begin to cut back in 2011 on payments to private insurance for providing Medicare type services through the Medicare Advantage plans. Many of these services are provided to traditional Medicare patients for less. If you have a Medicare Advantage plan, your insurer may cut extra benefits or increase co-payments. However, you will also receive free preventive services.

Q: How much does this bill cost the American taxpayers?

A: The new law is estimated to cost $940 billion over 10 years, according to the non-partisan Congressional Budget Office (CBO). The CBO also estimates that the new law will reduce the deficit by $124 billion over this same 10-year period.

You won't be taxed to pay for health reform unless you're affluent. The new law, along with the final modifications, increases Medicare tax rates for very high-income households (adjusted gross income over $200,000 a year).

It is important to keep in mind that without this bill, health care costs would continue to rise and use resources. Over the past 10 years, most families’ health insurance bills have more than doubled—and if nothing is done to rein in costs, experts estimate that premiums will double again in another 10 years

Q: Will this new law really cover more people?

A: Yes, Congress estimates that 32 million more people will get access to insurance coverage over the next ten years, with a major expansion to begin in 2014. The several million who will still be without coverage by 2019 will include those who may be exempt for financial or religious reasons, as well as those who might slip through the cracks – including millions of undocumented residents.

Sources: Kaiser Family Foundation, White