Health Care Reform Rundown
A closer look at the good (and hard to understand) from the health system overhaul.
Jacqui Fatka
Published: May 14, 2010
You might be sick of hearing about a national health care system or it might be just what the doctor ordered. Whatever your political thoughts on the matter, the truth remains it now is the law of the land and some measures go into effect immediately, while others will take several years to transition into effect.
Many insurance reforms can impact farmers today. Understanding the long-term implications can also help you plan for the future.
Keith Mueller, director, Rural Policy Research Institute Center for Rural Health Policy Analysis, suggests farmers work with their local insurance broker to see if their current plans can be modified due to some of the provisions approved including pre-existing conditions. He also suggests potentially sticking with buying the high deductible plan so the premiums stay lower until 2014. Once the exchange is in place you might be able to buy a better benefit package.
Here's a quick look at highlights:
Premiums: Although the national health care plan is designed to prevent massive premium increases, in the short-term there could be increases in order to "beef up the size of the overall pool," especially if those who need care first come into the system and are higher users, explains Mueller.
"Longer-term we could see a leveling off of those premium increases, but not a decrease. The rate of increase seen in the last 10 to 15 years would fall back quite a bit," he notes. The idea is if everyone is in, it spreads the risk farther and there would be no reason to see double-digit premium increase in the 10-year time horizon.
Fines and Taxes: The major portion of the law doesn't go into effect until 2014 and very little taxes are collected until the bill goes into full force. Main taxes are going to be increased where Medicare taxes are paid. Higher income tax filers (individuals with earning $200,000 and couples with wages over $250,000) will be footing most of the bill.
The bill provides tax credits to small employers with no more than 25 employees and average annual wages of less than $50,000 that purchase health insurance for employees. Jon Bailey, director of research and analysis at the Center for Rural Affairs, says 80-90% of rural community businesses meet that threshold.
For those who chose not to purchase insurance, there is an excise tax or fine of $695 annual fine ($2,085 for families). The money collected then goes into the pool to pay for those of the uninsured. Bailey says in Massachusetts, which has a similarly run health care system, most people abided by the mandate and aren't canceling insurance to pay the fine.
Pre-existing Conditions: Beginning immediately an insurance company can no longer deny children coverage because of a pre-existing health issue. For adults, 90 days following enactment until full implementation in January 1, 2014, the federal government will establish a temporary national high-risk pool to provide health coverage to individuals with pre-existing medical conditions. This will be critical since many farmers can be in that high-risk category.
Lifetime Limits: The law now prohibits individual and group health plans from placing lifetime limits on the dollar value of coverage and prior to 2014, plans may only impose annual limits on coverage as determined by the Secretary of Health. This will be important for serious diseases such as cancer or other severe injuries.
Exchanges: Bailey notes the linchpin of the entire reform is the setting up of health insurance exchanges where small businesses and individuals can shop for insurance. The premise is if insurance companies don't have to go out and drum up business, overhead costs will be lower. It will be important to see how this is set up, which will vary by state, to assure it is user-friendly and that rural people have adequate access to the exchanges, especially if it is online only.
Medicare: The bill provides a $250 rebate to Medicare beneficiaries who reach the Part D coverage gap in 2010 and gradually eliminate the Medicare Part D coverage gap by 2020. By Jan. 1, 2011 it eliminates the co-payment for preventative services and exempts those services from Medicare deductibles. It also gives a 10% Medicare bonus payment to primary care physicians and to general surgeons practicing in health professional shortage areas.
Rural Access: Over time the bill also increases funding for community health centers which will benefit rural areas, Bailey says. It also provides new resources and programs to recruit more people to primary care physicians into rural areas.
One downfall of the legislation is that these provisions don't have guaranteed money, so it will have to be appropriated over time.
More online:
Health Reform Implementation Timeline
Impact of the Patient Protection and Affordable Care Act on Covered Persons as Amended
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