Major Provisions of the Patient Protection and Affordable Health Care Act

On March 23, 2010, President Obama signed into law the Affordable Care Act. The law puts into place comprehensive health insurance reforms that will hold insurance companies more accountable and will lower health care costs, guarantee more health care choices, and enhance the quality of health care for all Americans. The timeline below explains when the changes most likely to affect the American artist will occur, and how to access these unprecedented new options and provisions in the health care landscape. Please visit Healthcare.gov for a complete timeline of all the health care changes Americans will enjoy in the coming years, including the expansion of existing plans' coverage.

Beginning Summer, 2010:

*“Uninsurables” can get subsidized coverage through the national Pre-existing Condition Insurance Plan
• The government has established a national, temporary high-risk pool for those who have been uninsured for at least 6 months and have pre-existing conditions that make them “uninsurable.” Premiums rates won’t be officially available until July 15, but will depend on what state you live in, and may vary only by age, family type (individual vs. family), geographic area and tobacco use. The rate for a person of the highest age group may be no more than four times the rate of the youngest.
The Pre-Existing Condition Insurance Plan will cover a broad range of health benefits, including primary and specialty care, hospital care, and prescription drugs. The pools must cover at least 65 percent of the cost of whatever services are covered. The coverage also must have an out-of-pocket limit — the sum of deductibles, coinsurance or copayments — no greater than the limits established for high-deductible health plans linked to health savings accounts ($5,950 for an individual and $11,900 for a family in 2010). The new pools are to be administered directly by a state or a nonprofit entity under contract. Healthreform.gov is the best source of information about your state's high risk pool coverage.

Beginning September 22, 2010:

*Children up to age 18 with pre-existing conditions can’t be denied coverage

• This is an important provision, but the language of the new law may not exactly cover all children: it states that health plans and insurers offering individual or group coverage “may not impose any pre-existing condition exclusion with respect to such plan or coverage” for children under 19, starting in “plan years” that begin on or after Sept. 23, 2010. But, insurers say, until 2014, the law does not require them to write insurance at all for the child or the family. In the language of insurance, the law does not include a “guaranteed issue” requirement before then.

*Children up to age 26 will be able to stay on their parents’ plan

• Existing individual and employer-sponsored insurance will be required to extend dependent coverage to age 26. In order to qualify, the parent’s plan must offer dependent coverage and the young adult cannot have a job that offers coverage, unless the parent’s plan is either a plan purchased in the individual market or a plan that did not exist before March 23, 2010.
Young adults under 26 who have already lost coverage before the law goes into effect will have a special one-time opportunity to re-enroll in their parents’ plan. Their parents will receive notice of the opportunity at the beginning of the new plan year, and the young adults will have 30 days to enroll.

*Insurers can’t cancel the policies of people who get ill
*No lifetime limits on cost of medical coverage

• Health insurers will be prohibited from imposing lifetime limits on coverage and will be prohibited from rescinding coverage, except in cases of fraud.

*$250 rebate on Medicare Part D “donut hole”
• The Department of Health and Human Services (HHS) has already begun sending the $250 rebate checks to consumers in the Medicare drug coverage gap, also known as the "donut hole."
The rebate checks will be sent automatically and there are no forms to fill out. Consumers should protect themselves from fraud, and should not provide personal information, such as Social Security numbers or bank account numbers, to anyone who contacts them about the rebate.
The health reform law gradually phases out the donut hole. This year, people who enter the coverage gap will receive the one-time $250 rebate check.

2011- 2014:

*50% off brand name drugs for Medicare recipients in “donut hole”

• Beginning next year, consumers in the donut hole will receive a 50 percent discount on brand-name drugs and a 7 percent discount on generics. The share consumers pay for both brand-name and generic drugs will decrease until the gap is eliminated in 2020, when consumers will pay the standard 25 percent of the costs for drugs while in the donut hole.

*Creation of a public long-term care insurance program (using voluntary payroll deductions)

• The CLASS Act (The Community Living Assistance Services and Supports Act) establishes a national, voluntary insurance program for purchasing community living services and supports. The Act is designed to expand options for people who become functionally disabled and require long-term help, and will be financed by payroll deductions. All working adults will be automatically enrolled beginning Jan 1, 2011, and must opt-out if they don’t want to be enrolled. It will take 5 year to become vested, and will provide $50/day or more to buy non-medical services and supports in order to maintain community residence.

2014:

*Insurers cannot refuse coverage to anyone with pre-existing conditions

• New insurance market regulations will prevent health insurers from denying coverage to people for any reason, including their health status, and from charging people more based on their health status and gender. These new rules will also require that all new health plans provide comprehensive coverage that includes at least a minimum set of services, caps annual out-of-pocket spending, does not impose cost-sharing for preventive services, and does not impose annual or lifetime limits on coverage.

*Most people – and employers - will be mandated to buy insurance (penalties apply)‏

• All individuals will be required to have health insurance, with some exceptions, beginning in 2014. Those who do not have coverage will be required to pay a yearly financial penalty of the greater of $695 per person (up to a maximum of $2,085 per family), or 2.5% of household income, which will be phased in from 2014-2016.
Exceptions will be given for financial hardship and religious objections; and to American Indians; people who have been uninsured for less than three months; those for whom the lowest cost health plan exceeds 8% of income; and for individuals whose income is below the tax filing threshold ($9,350 for an individual and $18,700 for a married couple in 2009).

*State-run exchanges will offer insurance to those who don't get it through an employer

• States will create American Health Benefit Exchanges where individuals can purchase insurance and separate exchanges for small employers to purchase insurance. These new marketplaces will provide consumers with information to enable them to choose among plans. Premium and cost-sharing subsidies will be available to make coverage more affordable.
Access to Exchanges will be limited to U.S. citizens and legal immigrants. Small businesses with up to 100 employees can purchase coverage through the Exchange. Although there will not be a public plan option in the Exchanges, the Office of Personnel Management, which administers the Federal Employees Health Benefit Program, will contract with private insurers to offer at least two multi-state plans in each Exchange, including at least one offered by a non-profit entity. In addition, funds will be made available to establish non-profit, member-run health insurance CO-OPs in each state.
Plans in the Exchanges will be required to offer benefits that meet a minimum set of standards. Insurers will offer four levels of coverage that vary based on premiums, out-of-pocket costs, and benefits beyond the minimum required plus a catastrophic coverage plan.
Premium subsidies will be provided to families with incomes between 100-400% of the poverty level ($29,327 to $88,200 for a family of four in 2009) to help them purchase insurance through the Exchanges. These subsidies will be offered on a sliding scale basis and will limit the cost of the premium to between 2% of income for those up to 133% of the poverty level and 9.5 % of income for those between 300-400% of the poverty level. Cost-sharing subsidies will also be available to people with incomes between 100-400% of the poverty level to limit out-of-pocket spending.

*People with incomes at 133%-400% of Federal Poverty Level will be eligible for subsidies

• People with incomes above 133% of the poverty level who do not have access to employer sponsored insurance will be provided with “refundable, advanceable premium credits” for the purchase of private insurance coverage from the newly created state health insurance Exchanges. (Premium contributions will vary from 2.8% - 9.8% of income)

*Medicaid will cover people with incomes up to 133% FPL

• Medicaid will be expanded to all individuals under age 65 with incomes up to 133% of the federal poverty level($14,404 for an individual and $29,327 for a family of four in 2009) based on modified adjusted gross income.This expansion will create a uniform minimum Medicaid eligibility threshold across states and will eliminate the programs that prohibit most adults without dependent children from enrolling in the program today (though as under current law, undocumented immigrants will not be eligible for Medicaid). Eligibility for Medicaid and the Children’s Health Insurance Program (CHIP) for children will continue at their current eligibility levels until 2019.

*There will be sliding-scale caps on out-of-pocket costs.

• Cost-sharing subsidies will be available to people with incomes between 100-400% of the poverty level to limit out-of-pocket spending.