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What the healthcare law could mean to you

On March 23, President Obama signed into law the most sweeping healthcare overhaul in generations. Some questions and answers about the new law:

How will this bill affect me this year?

Many of the changes will take effect in the coming months. Insurers will no longer be allowed to place lifetime limits on coverage or drop customers without cause.

Plans must cover preventive services, and insurers must disclose how they use premium dollars. By next year, insurers will be required to provide rebates to customers if less than 80% of premium dollars is spent on actual care and improving quality.

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How do I sign up for my new insurance?

The new insurance options do not take effect until 2014. By then states will have created insurance exchanges, in which people who don’t get insurance from an employer or the government will be able to shop for policies.

The policies sold on exchanges will be subsidized for many low- and middle-income Americans.

I can’t afford the plans that are available to me. What does this bill do to help?

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By 2014, the federal government will provide subsidies to help you buy insurance if you earn less than 400% of the federal poverty level. Those subsidies will be based on income. If you earn $30,000, you will pay about $2,600 a year for insurance. A family of four with a yearly household income of $60,000 will pay about $5,200.

Also by 2014, you will need to buy insurance on your own or purchase it through your employer.

If you work for a small business, a new tax credit this year could provide an incentive for your employer to provide health benefits.

What’s to stop my insurer from raising my rates between now and 2014?

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States and the federal government must create a process for reviewing rate increases starting with plans issued in 2010. Although this would not keep insurers from raising rates in all cases, it is designed to discourage them from making unreasonable increases, possibly by excluding them from the insurance exchanges that open in 2014.

I have a preexisting condition and recently lost my job -- and with it, my health benefits. What does this law do for me?

You can keep the plan that you had through your job, but your former employer is not required to continue paying a share of your premium. Government subsidies are available to cover 65% of the premium for 15 months. But once that expires, you’ll need to find insurance on your own.

If you are unable to buy insurance because of your preexisting condition, you may be eligible to join a national high-risk pool, which will be created this year and subsidize premium costs. But only individuals who have been uninsured for at least six months will qualify for this pool.

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I have a great insurance policy through my employer, and I don’t want it to change. What’s this I hear about taxing my plan?

Democrats proposed bringing down healthcare costs by taxing “Cadillac plans” -- high-cost coverage plans provided by some employers. Because employer-sponsored health benefits are not taxed, employers have had an incentive to provide benefit increases rather than wage increases.

The “Cadillac tax” -- which takes effect in 2018 -- will cap the tax-free status of health benefits.

I’m a Medicare beneficiary, but I’m covered by a private insurer. Will I be able to keep my coverage?

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It sounds like you are a Medicare Advantage customer. The new law will not ban Medicare Advantage plans, but it will change the way they are paid. Some regions may see cuts in payments to such plans, and plans that score well on customer satisfaction, effectiveness and outcomes will receive bonus payments.

Insurers have suggested that the new payment structure could cause them to stop offering Medicare Advantage plans, but that would be the insurer’s decision, not the government’s.

I’m a low-income adult, but I don’t have any children. Will I qualify for Medicaid?

Yes. The bill expands Medicaid eligibility to anyone who meets the income requirements -- yearly income of up to $14,404 for an individual or $29,327 for a family of four. But you won’t be eligible immediately. Though states are now allowed to extend Medicaid coverage to childless adults, they won’t receive federal funds to defray the cost until 2014.

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I have prescription drug coverage under Medicare and will be hitting the “doughnut hole” pretty soon. What will the bill do to help me pay for my drugs?

Under the Medicare Part D program, seniors pay 25% of their drug costs up to $2,830 a year. After that they pay 100% until their out-of-pocket total reaches $4,550, at which point catastrophic coverage kicks in and seniors pay just 5% of the cost for the rest of the year.

The gap between the yearly limit and the point where catastrophic coverage kicks in is called the “doughnut hole.” In 2010, seniors who reach the coverage gap will be eligible for a $250 rebate.

Starting in 2011, the government and pharmaceutical makers will begin phasing in subsidies and discounts on brand-name and generic drugs purchased in the gap.

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By 2020, this program will have eliminated the gap entirely by covering 75% of seniors’ drug costs up to the catastrophic coverage limit.

kim.geiger@latimes.com


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