With the healthcare reform bill signed into law, a lot of people are asking the same question: what does this mean for me? We’ve listed many of the key changes you should know about below. Many of the reforms are long-term; however, some go into effect right away. If a specific year is not mentioned, this means that the change will take place within the first year.
If you have children:
• Children living in their parent’s household can be covered until the age of 26. (Currently many plans stop covering people’s children at the age of 19 or when they finish college.)
• Insurance companies can’t refuse coverage for children because of pre-existing conditions.
• Coverage rates can’t be raised or people can’t be dropped because of a new illness.
• Beginning in 2014, health plans can’t refuse coverage for anyone because of pre-existing conditions. Until then, if you have a pre-existing condition, you can get health coverage through a new program that expires in 2014.
• Lifetime coverage limits are eliminated.
• Beginning in 2011, certain preventive care must be covered and not included in healthcare deductibles.
• Beginning July 1, if you use the tanning salon, you’ll pay a 10% tax on services that use ultraviolet lamps.
• Beginning in 2013, you can itemize 10% of your income in medical expenses. (Currently you can itemize 7.5%.)
• If you are an individual earning $200,000 or more or have a household income of $250,000 or more, your Medicare payroll tax will be 2.35% by 2013 (up from 1.45%).
• Beginning in 2014, everyone will be required to have health insurance, with fines for those who do not have coverage of up to $695 or 2.5% of your income per year. Households earning up to $88,000 per year will qualify for tax credits to help pay for premiums.
If you qualify for Medicare:
• Currently seniors pay 25% of drug costs up to a certain amount, then 100% up to the “catastrophic cap”. Then they pay 5% of costs.
• Seniors will receive a $250 rebate when they have reached the 100% gap.
• This bill over time closes the 100% gap, so by 2020 seniors pay 25% to a certain amount, and then 5%. The 100% gap will not exist.
• By 2011 you qualify for a free annual wellness visit and personalized prevention plan service.
If you have employer-provided insurance:
• Your health benefit value will be included on your W-2 in 2011.
• By 2018, high cost employer-provided plans face an excise tax, called the “Cadillac Plan” tax.*
• In 2014, you can buy subsidized insurance on the insurance exchange if your employer doesn’t pay 60% of the cost, or if the cost is more than 9.5% of your income.
• In 2014, if employees choose to purchase subsidized insurance over the employer-offered plan, employers are charged $3,000 for each employee who chooses the subsidy or $750 for each employee in the company (the lower amount of the two).
If you don’t have employer-provided insurance:
• In 2014, coverage can be purchased from an insurance exchange marketplace with required benefits.
• If you are an individual making $14,404 or less, or a family of four making $29,327 or less, you could qualify for Medicaid by 2014.
• Beginning in 2014, employers who don’t offer health insurance who have at least 50 full-time employees, and at least one who has subsidized insurance will pay a $2,000 per employee fee (that doesn’t count the first 30 employees).
Sherman is committed to helping you understand and keeping you informed on current health news. For more information about this bill, you can visit the White House website.
* Some revisions are currently being reviewed at the Senate level, including an important “Cadillac plan” tax, which may tax insurers for employer-provided insurance at 40% for every dollar above $10,200 for individual premiums or $27,500 for family premiums by 2018.