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Jim Lentini: What does health-care reform mean for you?

Posted: April 26, 2010 4:13 p.m.
Updated: April 27, 2010 4:55 a.m.
I just returned from a seminar sponsored by the Foundation for Health Coverage Education, which explained more about the health plan the president signed into law on March 23. Please note, these details may/will change as the implementation costs of this program over time change dramatically, according to the experts in the health insurance industry.

Following are the highlights of the plan that we know about at this time:

Uninsured individuals 
* Interim high-risk pool for the uninsured with pre-existing conditions: Effective 90 days after enactment. It provides eligible individuals with pre-existing health conditions access to high-risk pool insurance. This provision ends when exchanges are available.

* Coverage for the uninsured with pre-existing conditions is effective in 2014. It provides eligible individuals with pre-existing health conditions access to insurance. Health plans can no longer exclude coverage for treatments based on pre-existing health conditions.

* The individual mandate to purchase health insurance is effective in 2014. It requires most individuals to obtain qualifying health insurance coverage, or pay a penalty (for individuals) of $95 for 2014, $325 for 2015 and $695 for 2016 (or up to 2.5 percent of taxable income in 2016).

Families will pay up to three times the amount, up to a cap of $2,085 per family. After 2016, dollar amounts are indexed. If affordable coverage is not available to an individual, they will not be penalized. Note: Exempt individuals include those with religious objections, undocumented immigrants, those without coverage for less than three months and Native Americans.

* Coverage for children with pre-existing conditions is effective six months after enactment. Health plans can no longer deny coverage to children with pre-existing conditions.

* Dependents may remain on their parent's insurance until their 26th birthday, effective on the first plan renewal that occurs six months after enactment. It requires a health plan that provides dependent coverage for children to continue to make coverage available to an employee's dependents until age 26, at the parent's choice.

Privately insured individuals
* Health plans can no longer drop people from coverage when they get sick, effective six months after enactment.

* Health plans no longer place lifetime caps/limits on coverage, effective six months after enactment.

* Free preventative care under new plans; Effective six months after enactment. Requires new private plans to cover preventive services with no cost sharing.

* Consumers have access to an effective internal and external appeals process, effective six months after enactment.

* Plans must put more premium dollars into care, effective on Jan. 1, 2011. The medical-loss ratio requires plans in the individual and small group market to spend 80 percent of premiums on medical services, and plans in the large group market to spend 85 percent. Insurers that don't meet these thresholds must provide rebates to policy holders.

* Prohibiting health coverage discrimination in favor of higher-wage employees is effective six months after enactment. It prevents new group health plans from establishing eligibility rules for health care coverage that have the effect of discriminating in favor of higher-wage employees.

* Help for early retirees is effective 90 days after enactment.

It creates a temporary re-insurance program (until exchanges are available) to help offset the cost of expensive health claims for employers that provided health benefits for retirees age 55-64.

General reforms
* Increased funding to community health centers, to increase the number of patients served over the next five years, effective beginning in fiscal year 2010.

* Increase the number of primary care doctors, nurses and public-health professionals, by providing new investment in training programs: Effective beginning in fiscal year 2010.

* Provide money to states to establish health-insurance consumer assistance offices to help consumers file complaints and appeals: Effective beginning in fiscal year 2010.

* Creates a long-term care insurance program, to be paid for by voluntary payroll deductions to provide benefits to those who become functionally disabled, effective beginning on Jan. 1, 2011.

Be advised, the information noted above is one portion of the 2,800-plus-page bill and its amendments printed at this time.

I will report other issues of the bill in future columns. What appears to be unfolding about this bill is that it will be very costly and will greatly expand government invasion into an industry important to all of us, that represents one-sixth of America's GDP.

The Foundation for Health Coverage Education noted its research concluded that of those individuals without health insurance in California, 80 percent would qualify for public insurance plans already in existence.

Remember what former President Ronald Reagan said: "The nine scariest words in America are, ‘Hi, I'm from the government, here to help you.'"

Jim Lentini, CLU, ChFC, IAR is president of Lentini Insurance & Investments Inc. His column reflects his own views and not necessarily those of The Signal.


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