Health Care Bill Summary and Timeline

You've probably heard by now that the health care reform bill will enable you to find coverage if you're sick and keep your existing coverage if you get sick, or that it will enable you to afford to buy insurance or get it for free. But when? Here's a summary and timeline of when the bill's various benefits and protections - and its costs - will take effect.

Upon the President's signature, your dependent children will be allowed to remain on your insurance policy up to age 26, and your insurer will not be permitted to deny them coverage based on pre-existing conditions. Children covered by Medicaid or state Children's Health Insurance Programs cannot be dropped from this point until 2019, and adults covered by state Medicaid programs cannot be dropped until the state insurance exchanges go into operation in 2014, unless a state needs to do so to close a budget shortfall. Also: a 10 percent excise tax on indoor tanning goes into effect, as does a tax credit of up to 35 percent for small businesses with fewer than 25 employees that offer health insurance.

Three months after the bill becomes law, individuals who have been unable to obtain coverage because of pre-existing conditions for at least six months will be able to purchase it from special high-risk insurance pools. The pools will be folded into the state insurance exchanges when they take effect in 2014.


Six months after the bill becomes law, Medicare recipients who have fallen into the coverage gap ("donut hole") in Medicare Part D prescription drug benefits will receive a $250 rebate, the first of a series of gradual closings of the coverage gap phased in through 2020. New insurance policies sold from this date forward must exclude preventive care and screenings from annual deductibles, and insurers will no longer be able to cancel policies except in cases of fraud or set lifetime coverage caps from this point forward.

In 2011, Medicare Part D recipients who fall into the "donut hole" will receive a 50 percent discount on their prescriptions. A new, voluntary insurance plan providing modest cash assistance for long-term in-home or nursing home care becomes available this year. Also, the first of a 10-year series of cuts in subsidies to Medicare Advantage plans - private insurance plans that pay medical expenses and often offer extra benefits not covered by Medicare -- taxes effect. Seniors enrolled in these plans will likely face hikes in premiums, reductions in benefits, or both. Employers have to start reporting the value of employees' health care benefits on their W-2s, and community health centers would get increased funding to treat low-income and underserved individuals.

In 2012, nonprofit insurance co-ops will be created to compete with for-profit insurers, and physicians, hospitals and payers will be encouraged to band together in "accountable care organizations."

In 2013, the Medicare payroll tax will rise from 1.45 percent to 2.35 percent for individuals making more than $200,000 a year and married couples making more than $250,000 a year, and a new Medicare tax on unearned income of 3.8 percent takes effect. Annual contributions to tax-sheltered flexible spending accounts for medical expenses will be capped at $2,500, indexed for inflation from this point. A 2.3 percent sales tax will apply to medical devices other than vision and hearing aids.

In 2014, most of the bill's most heralded benefits take effect. This is the year when the state insurance exchanges go on-line, with subsidized coverage available in the form of tax credits, and when Medicaid will be expanded to cover individuals making up to 133 percent of the Federal poverty level (currently about $28,300 for a family of four). Insurers will be prohibited from denying coverage to adults with pre-existing conditions and charging higher premiums to individuals with chronic conditions starting this year, and they will also be required to cover maternity care the same as all other medical procedures. 2014 is also the year the mandates kick in: individuals who do not have insurance and cannot prove hardship will pay a $95 fine, rising to $695 by 2016; families without insurance will pay fines of up to $2,250, indexed for inflation after 2016; and employers with more than 50 employees that have any employees enrolled in subsidized coverage through the exchanges will pay a penalty of $2000 times the number of workers employed minus 30.

In 2018, the tax on so-called "Cadillac health plans" takes effect. Employers who provide insurance policies worth more than $10,200 per individual or $27,500 per family will pay a tax of 40 percent of the value of the plan above the thresholds, indexed for inflation.

President Obama will sign the bill at 11:15 a.m. Eastern Time today.

Written by Sandy Smith
For HULIQ.com

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