Deciphering the Healthcare Law

Healthcare in the United States is changing rapidly, but the details, thus far, have been murky at best.  The passage of the Patient Protection and Affordable Care Act, as well as the subsequent United States Supreme Court ruling in National Federation of Independent Business v. Sebelius have created more than their fair share of confusion.  The Act itself is 2,409 pages, not including the additional 55 pages of the Healthcare and Education Reconciliation Act or the regulations that are currently open for comment.

Many of the provisions of the Act have already been rolled out, with some of the largest changes coming in 2014.  Everyone, from individuals to businesses of all sizes, must adjust and prepare themselves. CMDA is ready to help you find your way through these changes.

A logical starting point to understanding the changing environment is to look at what has already happened.  Many provisions of the Act have already been implemented in ways that likely affect your current health insurance coverage.

The following is a compilation of the significant changes that have already taken place:

Closing the Medicare Prescription Drug Gap – In 2010, seniors with a Medicare prescription drug plan were eligible for a one-time $250 rebate to cover prescription drug costs. This rebate was the first step in attempting to close the gap in Medicare prescription drug coverage. The gap will continue to close through 2020, with increasing discounts on brand-name prescriptions and increasing Medicare coverage for generic prescriptions.

Dependent Coverage – Any plans beginning after September 23, 2010 that offer coverage for dependents, must cover dependents up through the age of 26. Until 2014, plans that already existed in September 2010 (grandfathered plans), do not have to provide coverage if the dependent is offered healthcare through their own employer.  In 2014, that exception will no longer exist for grandfathered plans.

Preventative Services – Certain preventative services must now be covered without a co-pay, co-insurance or deductible. These services include blood pressure screenings, diabetes screenings, vaccinations, mammograms for women over 40, autism screenings for children between 18 and 24 months and many others.  For a complete list, please visit www.healthcare.gov and search for “preventative services.”

Small Business Tax Credit – In 2010, small businesses became eligible for a tax credit based on a number of factors, including the number of full-time and part-time employees, the average wages per employee and the amount the employer contributes towards the health coverage.  Thus far, the credit has been difficult to calculate and only a small percentage of eligible businesses have claimed the credit.  In 2014, the amount of the credit will increase and be limited to two years.

Pre-Existing Condition Health Plans – Each state had the option to establish a health plan available to those with pre-existing conditions that had been uninsured for at least six months.  If the state chose not to establish its own plan, the Department of Health and Human Services established a plan in that state.  Michigan created its own plan.  Enrollment has just recently been suspended in all programs due to the high volume of enrollees and limited funds.  In 2014, all plans will be required to provide coverage, regardless of an individual’s pre-existing conditions, thus eliminating the need for these special plans.

Eliminating Coverage Limits – Plans beginning after September 23, 2010, are no longer permitted to place dollar limits on coverage of “essential” benefits.  Annual limits on most covered benefits are also being phased out through 2014, when they will be completely eliminated.  There are, of course, exceptions for certain plans where eliminating annual limits would cause a significant decrease in coverage or a significant increase in premiums.

This list is not exhaustive and many other changes have also been implemented.  Over the coming months, we will continue to explore various aspects of the changing healthcare environment and its impact on individuals and small businesses.

Kali Lester, an attorney in our Livonia office, concentrates her practice on municipal law, utility law and appellate law.  She can be reached at (734) 261-2400 or klester@cmda-law.com.