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How Healthcare Reform Affects You

4 of 5 in Series: The Essentials of Healthcare Reform

Healthcare reform (what some refer to as "Obamacare") is now the law of the land. The legislation means the American health system is undergoing an overhaul the size of which hasn't been seen since Medicare and Medicaid were created in 1965. The law calls for insurance industry reforms, mandates healthcare coverage for most Americans, creates more insurance options, and expands Medicaid.

Although the broadest of the bill's provisions won't take effect until 2014, Americans may have already noticed some changes starting in 2010. Here's a look at the new healthcare reforms already in place.

Initiated in 2010:

  • Creation of high-risk pool: If you are an adult who hasn't had health insurance for six months or more and you have a preexisting condition, you may now enroll in a high-risk insurance pool. The premiums you pay will be partially subsidized by the government. The program will be eliminated when the new healthcare exchanges are up and running in 2014.

  • Formation of retiree reinsurance program: If you're a business that provides health insurance for retirees older than 55 who aren't yet eligible for Medicare, you can be reimbursed for 80 percent of your retirees' health claims. The payback applies to claims between $15,000 and $90,000. The program will be phased out once mandated health coverage becomes effective in 2014.

  • Coverage for children with preexisting conditions: Insurance companies can't deny coverage for your child because the child has a preexisting condition.

  • Increase in age for dependent coverage: You are able to keep your dependent children on your individual or group health plan until they reach age 26.

  • Mandated preventative care coverage: If you obtain coverage under a new, private insurance policy, that policy must cover the cost of your preventative care without charging you a co-pay or a deductible. By 2018, all plans will be required to follow suit.

  • Elimination of coverage caps: Your insurance provider can't set a lifetime or annual benefit limit on your health group or individual coverage.

  • Ban on coverage rescission: Insurance companies are prohibited from voiding your insurance coverage. The only exception is if you provide the company with fraudulent information.

  • Rebate for Medicare prescriptions: If you're a senior on Medicare whose prescription coverage has fallen through the infamous prescription "donut hole" (coverage gap), you will now receive a $250 rebate to help offset your out-of-pocket costs. Improvements in Medicare designed to close the prescription drug donut hole are slated to be phased in over the next several years.

  • Tax credits for small businesses: If you employ 25 or fewer employees and pay for at least half of your employees' health insurance, you could be eligible for a tax credit of up to 35 percent of the premiums you pay. The tax credit will apply to tax years 2010 through 2013.

Initiated in 2011:

  • Additional donut hole help: If you're on Medicare and in the donut hole, you can get your prescriptions for brand-name drugs filled at a 50 percent discount.

  • Expanded Medicare preventative services: If you receive health care though Medicare, your prevention care is covered without co-pays or deductibles.

  • Optional Medicaid enrollment expansion: Your state had the option of instituting new, more inclusive Medicaid enrollment guidelines before the mandated 2014 start date. All individuals under age 65, including adults without children, pregnant women, and children whose household incomes don't exceed 133 percent of the federal poverty level (FPL) are eligible for enrollment.

    FPL is $10,830 for an individual and $22,050 for a family of four. Additionally, states will have to continue administering CHIP, Children's Health Insurance Program, at current coverage levels.

  • Medicaid coverage for at-home care: If you have two or more chronic conditions or one serious, persistent mental health condition, your state has the option of allowing Medicaid to cover the health care you receive at home.

  • Reduction in health-savings account coverage: Your health savings account can't reimburse you for your over-the-counter, non-prescription medication purchases.

  • Wellness program grants: If you're a small employer and you establish a wellness program, you may receive grants to help institute and maintain that program for up to five years.

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