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The New Federal Affordable Care Act

The New Federal Affordable Care Act

October 19, 2010
By Willis, Willis & Rizzi, Personal Injury Attorneys

What it will do this year:

Allowing States to Cover More People on Medicaid

States will be able to receive federal matching funds for covering some additional low-income individuals and families under Medicaid for whom federal funds were not previously available. This will make it easier for states that choose to do so to cover more of their residents.

Expanding Coverage for Early Retirees

Too often, Americans who retire without employer-sponsored insurance and before they are eligible for Medicare see their life savings disappear because of high rates in the individual market. To preserve employer coverage for early retirees until more affordable coverage is available through the new Exchanges by 2014, the new law creates a $5 billion program to provide needed financial help for employment-based plans to continue to provide valuable coverage to people who retire between the ages of 55 and 65, as well as their spouses and dependents. Applications for employers to participate in the program were available June 1, 2010.

Providing Access to Insurance for Uninsured Americans with Pre-Existing Conditions

A Pre-Existing Condition Insurance Plan will provide new coverage options to individuals who have been uninsured for at least six months because of a pre-existing condition. States have the option of running this new program in their state. If a state chooses not to do so, a plan will be established by the U.S. Department of Health and Human Services in that state. This program serves as a bridge to 2014, when all discrimination against pre-existing conditions will be prohibited.

Extending Coverage for Young Adults

Under the new law, young adults will be allowed to stay on their parent’s plan until they are 26 years old. (In the case of existing group health plans, this right does not apply if the young adult is offered insurance at work.) Some insurers began implementing this practice early. Check with your insurance company or employer to see if you qualify. Effective for health plan years beginning on or after September 23, 2010.

Holding Insurance Companies Accountable for Unreasonable Rate Hikes

The law allows states that have, or plan to implement, measures that require insurance companies to justify their premium increases to be eligible for $250 million in new grants. Insurance companies with excessive or unjustified premium increases may not be able to participate in the new health insurance Exchanges in 2014.

Rebuilding the Primary Care Workforce

Starting this year to strengthen the availability of primary care, there are new incentives in the law to expand the number of primary care doctors, nurses and physician assistants, including funding for scholarships and loan repayments for primary care doctors and nurses working in underserved areas.

Strengthening Community Health Centers

The law includes new funding to support the construction of and expansion of services at community health centers, allowing these centers to serve some 20 million new patients across the country.

Payments for Rural Health Care Providers

Presently, 68% of medically underserved communities across the nation are in rural areas, and these communities often have trouble attracting and retaining medical professionals. The law provides increased payment to rural health care providers to help them continue to serve their communities.

Providing Small Business Health Insurance Tax Credits

Up to 4 million small businesses are eligible for tax credits to help them provide insurance benefits to their workers. The first phase of this provision provides a credit worth up to 35% of the employer’s contribution to the employees’ health insurance. Small non-profit organizations may receive up to a 25% credit.

Relief for Four Million Seniors Who Hit the Medicare Prescription Drug “Donut Hole”

An estimated 4 million seniors will reach the gap in Medicare prescription drug coverage known as the “donut hole” this year. Each such senior will receive a $250 rebate.

Cracking Down on Health Care Fraud

Current efforts to fight fraud have returned more than $2.5 billion to the Medicare Trust Fund in FY 2009 alone. The new law invests new resources and requires new screening procedures for health care providers to boost these efforts and reduce fraud and waste in Medicare, Medicaid, and CHIP.

Providing Free Preventive Care

Effective for health plan years beginning on or after September 23, 2010 – all new plans must cover certain preventive services such as mammograms and colonoscopies without charging a deductible, co-pay or coinsurance.

A new $15 billion Prevention and Public Health Fund will invest in proven prevention and public health programs that can help keep Americans healthy – from smoking cessation to combating obesity.

Putting Information Online

The law provides for an easy-to-use website where consumers can compare health insurance coverage options and pick the coverage that works for them.

Prohibiting Insurance Companies from Rescinding Coverage

In the past, insurance companies could search for an error, or other technical mistake, on a customer’s application and use this error to deny payment for services when he or she got sick. The new law makes this illegal.

Appealing Insurance Company Decisions

The law provides consumers with a way to appeal coverage determinations or claims to their insurance company, and establishes an external review process.

Eliminating Lifetime Limits on Insurance Coverage

Under the new law, insurance companies will be prohibited from imposing lifetime dollar limits on essential benefits, like hospital stays.

Regulating Annual Limits on Insurance Coverage

Under the new law, insurance companies’ use of annual dollar limits on the amount of insurance coverage a patient may receive will be restricted for new plans in the individual market and all group plans.

As the law rolls into effect over the next four years, each year will have new provisions.

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