Sunday, March 28, 2010

10 Ways Healthcare Reform Could Impact You

Several media outlets have reprinted an article on healthcare reform that originally appeared on Investopedia -- a Forbes digital company. The article details many of the benefits (and some costs) provided by the recently enacted healthcare legislation.

With so much negative propaganda floating around, the article is a refreshing read. Although it does not fully discuss the costs associated with the legislation, it informs readers what they have "bought." This is an important part of the discussion that neither the White House nor the opponents of the legislation has adequately addressed.

Here are some details:
1. Your Kids are Covered
Starting this year, if you have an adult child who cannot get health insurance from his or her employer and is to some degree dependent on you financially, your child can stay on your insurance policy until he or she is 26 years old. Currently, many insurance companies do not allow adult children to remain on their parents' plan once they reach 19 or leave school.

2. You Can't be Dropped
Starting this fall, your health insurance company will no longer be allowed to "drop" you (cancel your policy) if you get sick. In 2009, "rescission" was revealed to be a relatively common cost-cutting practice by several insurance companies. The practice proved to be common enough to spur several lawsuits; for example, in 2008 and 2009, California's largest insurers were made to pay out more than $19 million in fines for dropping policyholders who fell ill.
3. You Can't be Denied Insurance
Starting this year your child (or children) cannot be denied coverage simply because they have a pre-existing health condition. Health insurance companies will also be barred from denying adults applying for coverage if they have a pre-existing condition, but not until 2014.
4. You Can Spend What You Need to
Prior to the new law, health insurance companies set a maximum limit on the monetary amount of benefits that a policyholder could receive. This meant that those who developed expensive or long-lasting medical conditions could run out of coverage. Starting this year, companies will be barred from instituting caps on coverage. . . .

7. You'll Have More Options
Starting in 2014 (when you will be required by law to have health insurance), states will operate new insurance marketplaces - called "exchanges" - that will provide you with more options for buying an individual policy if you can't get, or afford, insurance from your workplace and you earn too much income to qualify for Medicaid. In addition, millions of low- and middle-income families (earning up to $88,200 annually) will be able to qualify for financial assistance from the federal government to purchase insurance through their state exchange.
The full article is available here: 10 Ways The New Healthcare Bill May Affect You.


Josh Dowlut said...

I posted that article as well to explain how the cost increases shown in this WSJ article could take effect 4 years before the mandate. Each new requirement on insurers has to be paid for somehow.

From the WSJ:

Remember the part in the ObamaCare pitch when they said if you like your current healthcare, it won't change?

Turns out it might.

Companies are already announcing that their healthcare premium costs are going through the roof. Some are responding by firing people. Some are cutting benefits. And some are presumably eating it.

But costs they are a-rising.

A few examples from the WSJ:
-- Caterpillar said it would cost the company at least $100 million more in the first year alone.
-- Medical device maker Medtronic warned that new taxes on its products could force it to lay off a thousand workers.
-- Verizon announced to employees that it will likely have to cut healthcare benefits to offset the new costs.

So, people who like your employer-provided health insurance, get ready to pay more or get less.

Darren Lenard Hutchinson said...

Josh - you cited the Caterpillar, etc., line regarding "cost" increases - but those are not cost increases; instead, the companies no longer get a double-subsidy from the government. I have two articles on this subject (click the home page).

cykman said...

Hi Darren. Nice blog. I just found it today and have already re-tweeted a couple of your posts. I just started my blog 3 months ago at:

Best wishes. Jon

Josh Dowlut said...
This comment has been removed by the author.
Josh Dowlut said...

Just read them, good info and good point. Certainly lifting lifetime and annual caps is an added cost as well. When you buy auto insurance the amount of liability coverage you select affects your premium. Removing an insurance company's payout cap certainly raises their costs, the only question is who will pay those costs. The more significant move in prices won't happen till the mandates shift the demand curve to the right.

Matt P. said...

Looks like #3 is already coming into question. From the NYT:

Insurers agree that if they provide insurance for a child, they must cover pre-existing conditions. But, they say, the law does not require them to write insurance for the child and it does not guarantee the “availability of coverage” for all until 2014.

William G. Schiffbauer, a lawyer whose clients include employers and insurance companies, said: “The fine print differs from the larger political message. If a company sells insurance, it will have to cover pre-existing conditions for children covered by the policy. But it does not have to sell to somebody with a pre-existing condition. And the insurer could increase premiums to cover the additional cost.”....

...Insurers say they often limit coverage of pre-existing conditions under policies sold in the individual insurance market. Thus, for example, an insurer might cover a family of four, including a child with a heart defect, but exclude treatment of that condition from the policy.

The new law says 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.

Consumer advocates worry that instead of refusing to cover treatment for a specific pre-existing condition, an insurer might simply deny coverage for the child or the family.

“If you have a sick kid, the individual insurance market will continue to be a scary place,” said Karen L. Pollitz, a research professor at the Health Policy Institute at Georgetown University.

Real Time Analytics