In 2010, Congress passed and President Obama signed into law the Affordable Care Act, which has already brought change to the health insurance industry. Although many of the major provisions from the health reform law don’t go into effect until 2014, there are some changes that 2011 will usher into place.
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Here are some of the things you can expect from health care reform in the coming year:
1. The Medicare “donut hole” for prescription coverage will be narrowed, with the help of a 50% drug discount.
Although it sounds appetizing, the Medicare “donut hole” does not refer to a sugary treat.
Here’s how it happens: Once a deductible has been met, seniors with Medicare Part D prescription drug coverage pay 25% of the cost of drugs and the insurance company pays the difference.
This coverage remains in place until a total of $2,800 has been spent (by both the senior and the drug company). When that limit has been met, seniors then enter the so-called “donut hole” and must pay the full cost of prescriptions until they reach the annual out-of-pocket limit of $4,550.
At that time, seniors are only responsible for a small portion of the cost of prescription drugs, often 5%.
While coverage does eventually kick in again, this gap in insurance coverage can put many seniors at financial risk. In 2010, seniors who reached the “donut hole,” received a one-time $250 rebate. Starting in 2011, seniors who meet the coverage gap receive a 50% discount on Medicare Part D-covered brand-name prescription drugs. Discounts on brand-name and generic drugs will increase over time, gradually closing the “donut hole” by 2020.
2. Medicare cost-sharing will be eliminated for many preventative and diagnostic services.
Seniors will receive certain Medicare-covered preventive services, such as an annual wellness visit, without having to pay the Medicare Part B coinsurance or deductible.
3. Health insurance companies will be required to spend more premium dollars on medical services.
Health insurance companies will be required to spend a larger percentage of premium dollars on clinical services and activities that promote health care quality improvements. Insurers who provide affordable health insurance to individuals and small group plans must spend 80% of premiums on health care, while large group plans will have to spend 85% of their premiums on health care. Insurers that don’t comply, because administrative costs or profits are too high, will have to provide rebates to policyholders.
4. Efforts will be made to increase the number of Medicare primary care doctors.
From the onset of 2011, Medicare will provide a 10% bonus for primary care services to encourage more doctors to enter this field. Additionally, Medicare will give bonuses to surgeons working in areas where there are shortages of health care professionals.
5. Nutritional labels at certain restaurants
Beginning on March 23, 2011, you’ll be more aware of how good (or bad) the food you order at certain restaurants is for you. The health reform law requires that restaurants, and similar retail food establishments, with 20 or more locations clearly post nutritional information for menu items.
6. New rules for tax-free savings accounts
If you have health insurance provided by an employer, chances are that you also have access to a tax-free savings account, such as a flexible spending account (FSA) or a health reimbursement account, to pay for health expenses. In 2011, unless you have a prescription from your doctor, you can no longer use your tax-free savings account to pay for over-the-counter medications.
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Six important health reform changes in 2011 was written by Miranda Marquit, a writer for AffordableHealthInsurance.net.