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The Affordable Care Act: How Does It Affect You?

October 21, 2012

By: Richard C. Memmott, Sr.
Director of Masonicare Community Services
and Chairman, Connecticut Commission on Aging

On March 23, 2010, President Barack Obama signed the Affordable Care Act, the health care law that was designed to increase access to health coverage for many Americans and give new protections to people who currently have health insurance.  Some parts of the law are in effect right now, and others will take effect down the road.   The following is a brief outline, by year, of some of the provisions of the law that are currently in place and what will be happening through 2015.

2010:  Some of the major consumer protections that became law in 2010 include the following:

Insurance companies can no longer deny coverage to children under age 19 because of a pre-existing health condition.  And, young adults are now allowed to stay on their parent’s health plan until they turn 26.

Insurance companies can no longer rescind health coverage. In the past, they could search for errors or technical mistakes on a person’s application and use it to deny coverage when he or she became sick and needed it most.  The law makes this illegal.

Under the law, insurance companies can no longer impose lifetime dollar limits on essential benefits, like hospital stays, and consumers now have a way to appeal coverage determinations or claims to their insurance company.

Also, 4 million seniors who reach the Medicare prescription drug “Donut Hole” now receive monetary assistance, and new medical plans must cover preventive services such as mammograms and colonoscopies without charging a deductible, co-pay or coinsurance.  The law also implemented new ways to reduce fraud and waste in Medicare, Medicaid and CHIP (Children’s Health Insurance Program).

For early retirees who retire before they’re eligible for Medicare and are without employer-sponsored health insurance, the Affordable Care Act created a $5 billion program to help employers provide coverage to these employees until more affordable coverage is available in 2014.

Another important component passed in 2010 now makes it easier for states to hold insurance companies accountable for unreasonable rate hikes.

In 2011, seniors who reached the coverage gap for prescription drugs began receiving a 50% discount when buying Medicare Part D covered brand-name prescriptions.  And until 2020, when the coverage gap is closed, seniors will receive additional savings on brand-name and generic drugs.  They also received free preventive care, such as annual wellness visits and personalized prevention plans.  And to avoid frequent readmissions to the hospital, high-risk Medicare beneficiaries now have their care coordinated when discharged and are connected to appropriate services in their communities.

2012:  This year, many new components took effect that will continue to improve quality of care and lower healthcare costs.  Hospitals now receive financial incentives to improve the quality of care they provide and physicians get incentives when they work together in groups to coordinate and improve the quality of patient care and reduce unnecessary hospital admissions.  Since healthcare remains one of the few industries that relies on paper records, the law initiated a series of changes that will standardize billing and implement the use of electronic records to reduce paperwork and administrative burdens, cut costs, reduce medical errors, and ultimately improve quality of care.

This year, 2013, to improve preventive health coverage and expand the number of Americans receiving preventive care, the law will give new funding to state Medicaid programs that choose to cover preventive services for patients at little or no cost.  It will also increase the Medicaid payments for primary care doctors, and according to the federal government, the increase is fully funded.

Many new and important consumer protections will take effect in 2014.  Strong reforms will be implemented that will prohibit insurance companies from refusing to sell coverage or renew policies because of an individual’s pre-existing conditions.  It will also eliminate the ability of insurance companies to charge higher rates due to gender or health status.  The law will also prohibit new and existing group plans from imposing annual dollar limits on the amount of coverage an individual may receive.

Also beginning in 2014, if your employer doesn’t offer healthcare coverage, you can purchase insurance directly in an Exchange – a new, transparent and competitive insurance marketplace where individuals and small businesses can buy affordable health benefit plans.  Exchanges will offer a choice of plans that must meet certain benefits and cost standards.  Members of Congress will also be getting their health insurance through Exchanges.

Effective January 1, 2015, the year in which the final component of the Affordable Care Act will be enacted, a new provision will tie physician payments to the quality of care they provide.  Physicians’ payments will be modified, and physicians who provide the best care will receive higher payments than those who provide lower quality care.