Since the very beginning of President Obama’s term, fixing the broken health care system of this country has been top priority for his administration. He signed a bill into law March 23, 2010, which could potentially change the way health services are delivered in the U.S. There is a lot of confusion in the market as no one really understands the full scope of the bill; things keep changing in Washington almost on a weekly basis; and people like me, who make a living in the health care industry, are not sure about what the future really holds for us.
I want to explain this in simple words — “What’s in it for you” — so that it makes some sense.
1) Graduating Students: The job market is tough for new college graduates. Before, you had to be a full time student if you wanted to stay on your parents plan after age 19. Also, you could only stay on their plan till age 24. With the new reform, an adult child can stay on his/her parents’ plan till they turn 26, irrespective of whether they are full time students or not. That should provide some relief to many families as their children leave college and hunt for jobs in a tight market.
2) Rescinding Coverage: The insurance industry recently announced that companies would honor a new ban on canceling the coverage of sick policyholders. Many insurance companies were blamed that they cancelled coverage for sick policyholders. Even if the change is designed to improve reputation, it is another indication that reform is taking hold and benefiting Americans.
3) Preventive Care (Annual Physical): All insurance companies now are required to offer the preventive services i.e. annual physical exams and tests related to the physical such as Glucose, blood pressure, cholesterol screening, etc. at no cost to the insured. Yes, that’s right — “no co-payment.” Be careful though as some employers are allowed to opt out of some of these benefits. So, please check with your employer.
4) Guaranteed Child Only Coverage: Children cannot be denied any more. In the past, children suffering from pre-existing conditions were not able to get coverage in the individual market. This left children really venerable and often they had to use government plans or visit emergency rooms as uninsured patients. Starting Oct. 23, 2010, a child applying for coverage cannot be denied for pre-existing conditions. Unfortunately, for adults this law does not go into effect till 2014.
5) California Pre-Existing Coverage Plan: The State of California has established a pre-existing insurance plan (PCIP). The plan caters to adults with pre-ex conditions who cannot get any other coverage elsewhere. As I help clients, I find it quite difficult for them to qualify for the plan because of the strict eligibility requirements. At least there is an option available.
6) Small Business Health Tax Credit: Employers with fewer than 25 workers and an average salary of less than $50,000 can receive up to 35% in tax credits. But some small employers say they are reluctant to offer coverage because they fear the law might be changed.
Some of you reading this column may wonder why it all sounds so good. What’s bad about this law? How does it affect your taxes? How does it affect the already struggling economy of this country? We shall tackle all these questions in my next blog. Until then, so long…