Now That Health Care Reform Is the Law, What Happens Now?

Last Updated May 13, 2010 12:13 PM EDT

Health care reform - officially known as The Patient Protection and Affordable Care Act -- is now the law of the land. The law is a collection of new rules, regulations, and policies. In this year alone there are over 25 changes that will go into effect. Some of the biggest changes won't happen for several years and some changes will be phased in.

There is no doubt that the new health care rules will have an impact on how you or your family will access health care and what you'll pay for it.

As for the changes this year, some are required to go into effect this summer and some on or after September 23rd. One thing to be aware of is that if your existing health insurance plan contract is on a calendar year (i.e., it runs from January 1st to December 31st), then your curent health care benefits will probably not change until January 1st 2011, which is the beginning of the next contract year.

Here is what you need to know about some of the changes that go into effect this year that will impact individuals, families, and small business owners.

Effective this July 1st:
Coverage for Uninsured with Pre-existing Conditions. Individuals locked out of getting health insurance because of a pre-existing condition will be able to buy subsidized health insurance through a nationalized high-risk pool for a limited time. To qualify, you must be uninsured for at least six months and the new policies must cap annual out-of-pocket costs to $5,950 for individuals and $11,900 for families.

The hitch is that the details have yet to be ironed out on how this national high risk pool will work with existing states programs. Folks who could qualify should check out the NAIC web site and Coverage for All for additional information. By 2014, when the health care reform law is required to be fully phased in, insurers will no longer be able to turn away anyone because of a pre-existing condition, and folks not covered by an employer's plan will get coverage from a health insurance exchange.

Effective for health insurance plan years beginning on or after September 23, 2010:
No Rescissions of Coverage. Later this year all health plans will be banned from dropping people from coverage when they develop an illness or medical condition. For some folks, this is nothing new since this provision is already in place in a number of states. So for some people in certain parts of the country (such as New York, Vermont, New Hampshire, etc.), nothing will change, while others will see additional coverage and benefits.

Extending Dependent Coverage to Age 26. All health insurance policies will be required to allow dependent children to stay covered on their parents' existing health insurance up to their 26th birthday. In the industry, they are calling this rule "Dependent 26." This year's college grads and their parents can breathe easier and will have more time to check into coverage options. But don't assume that staying on a parent's plan is always the better option. For example, if you are a healthy 20-something grad you can buy an individual health policy for about $150 per month, which may be less than paying extra to remain on your parents' existing policy. But if you're a grad with health issues and you don't have to pay extra to keep covered on your parent's policy, then that may be the better option.

Eliminate Pre-existing Condition Restrictions for Children. No longer can an insurance company deny coverage to children with pre-existing conditions. This change will apply to all employers' plans and to any new individual policies offered in the market.

No More Annual and Lifetime Limits. The new rules require that all group health plans and policies sold to individuals can no longer include restrictive annual and lifetime dollar limits for essential health benefits. But at this time it's still not clear as to exactly what heath benefits are included as "essential."

Later this week I'll write about some more changes that will affect seniors and small business owners.
  • Ray Martin

    View all articles by Ray Martin on CBS MoneyWatch»
    Ray Martin has been a practicing financial advisor since 1986, providing financial guidance and advice to individuals. He has appeared regularly as a contributor on the CBS Early Show, CBS NewsPath, as a columnist on CBS Moneywatch.com and on NBC-TV's morning newscast TODAY. He has also appeared on the Oprah Winfrey Show and is the author of two books.

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