Health Insurance Articles
The New Legislation And Its Effect On Your Current Health Coverage
2010-06-04
In the spring of 2010, Congress passed landmark health legislation that will affect many, if not most, Americans over time. Some of the provisions went into effect immediately; other provisions start six months after enactment; even more provisions will be phased in between 2011 and 2014. At the core of the new legislation is an individual mandate for every American to have health insurance, whether through an employer, as a retirement benefit, or through the private purchase of a plan. Government-regulated exchanges will assist lower income families, high risk individuals and small businesses in pooling together for more cost effective insurance. Many other changes to the health insurance industry is also included as part of the legislation.
Among the provisions of the new health legislative that went into effect immediately or will soon be in effect are: a tax credit to encourage small businesses to offer health insurance to their employees, a ban on lifetime limits under health insurance policies, a prohibition against denying health insurance coverage to children due to pre-existing conditions, a ban against rescinding health insurance coverage when a person becomes sick, and an extension of coverage for young people under their parents' insurance until the age of 26. All health insurance providers must abide by these new requirements, effective immediately.
For seniors, the new health legislation includes provisions to exempt preventive medical services from Medicare deductibles and co-pay requirements. Also, the infamous "donut hole" under the Medicare Part D prescription drug program will be gradually eliminated.
Down the road, more provisions affecting health insurance coverage for all Americans will take effect. Beginning in 2011, insurance companies will be required to spend no more than 25 percent of revenue from premiums on profits or overhead. Also starting in 2011, all insurance companies will be required to offer a valid justification for any proposed rate increase, and all proposed rate increases will need to be publicly disclosed in advance. Most important, the legislation will eventually require all Americans to have a minimum level of health insurance coverage. Those who do have proof of such coverage will pay a tax penalty. Beginning in 2014, state-based exchanges will be in place to assist small businesses and individuals in purchasing affordable health insurance by pooling their resources. These exchanges will offer plans, in competition with private insurers, and these plans will offer health insurance coverage equivalent to the health plans offered to members of Congress. When the exchanges take effect in 2014, the ban on pre-existing conditions will be extended to all insured persons, not just children.
Check with your Congressman for more information on the unfolding health care reforms.
