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How New Health Care Benefits Affect You

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The Affordable Care Act was signed by President Obama in March of this year.  The act ensures that all Americans will have access to affordable health insurance, whether they have pre-existing conditions or not.  While some of the health care reform changes will not be implemented until 2014, several new reforms under the Affordable Care Act were implemented on September 23, 2010, allowing more children health coverage, ending lifetime and most annual limitations for care, and providing preventative services.

New Health Care Benefits

Here are some of the details of the changes which went into effect on September 23, 2010. For a more in depth look at the changes, check out this health care reform timeline.

Pre-Existing Condition Insurance Plans

Under the Affordable Care Act, no one can be denied health insurance based on pre-existing health conditions, this includes children and adults.  This will make it possible for about 72,000 people who have previously been denied health insurance due to their health conditions to obtain health insurance.

For now, each state offers a pre-existing condition insurance plan, or “high-risk” plan which is either managed by the state or the federal government.  Anyone with a pre-existing health problem will be granted access to health insurance under these plans, provided they have gone at least six months uninsured previously.  The plans are to provide temporary coverage through 2014, when the rest of the Affordable Care Act provisions for health insurance coverage are implemented.

Extended Healthcare Benefits for Young Adults

As of September 23, 2010, young adults can remain on their parents’ health insurance plans until they turn 26 years old.  It doesn’t matter if the young adult is a student, employed, or married. The act allows young adults to remain under the parents’ plan regardless of their financial or marital status, regardless of where they live, and regardless of their student or employment status. Considering that 30% of Americans between the ages of 19 and 29 are uninsured, this is a big improvement.

The U.S Department of Health estimates that more than 2.37 million young adults will obtain health insurance due to this change in health care policy.

Medicare – Filling the “Donut Hole”

If you have Medicare, you may have found that there is usually a gap in what your Medicare covers and the amount you pay for your prescriptions.  This gap is called the “donut hole” and the new health care reform attempts to fill it with a one-time, tax free $250 donut hole rebate from Medicare to help pay for your prescriptions.

After 2011, if you continue to have high prescription drug costs that put you in the donut hole, your brand name drugs will be offered at a 50% discounted price.  Between 2011 and 2020, Medicare will offer continuous coverage for prescription drugs.

Ending LifeTime Dollar Limits

Previously, most health plans set an annual limit on how much they would pay towards your care, typically on specific types of services (mental health, for example) or amount of prescriptions.  Limitations were created either in the form of limiting the number of visits you could have each year, or through the dollar amount for covered services.  When you reached the annual limit, any expenses incurred would then come out of your pocket for the rest of the year.

Under the Affordable Care Act, for health plan or insurance policies issued or renewed after September 23, 2010, annual limitations will be between $750,000 and $2 million per insured individual, with no annual dollar limitations allowed on most covered benefits beginning on January 1, 2014.


Published or updated October 5, 2010.
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{ 2 comments… read them below or add one }

1 PW

Some of Obama’s biggest supporters, labor unions, hate the Cadillac tax because it hits their members with so-called Cadillac plans. Obama badly needed their support to get his health care plan through Congress.

Obama agreed to push the start back to 2018 in a special deal for labor union members.

While the big union and their members have some of the most comprehensive rich benefits and most would easily qualfiy as “Cadillac Plans” they have been given a pass until 2018.

Additionally, children can stay on their parents medical policy until age 26 UNLESS they get a job that offers them their own insurance.

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2 Ryan

Thanks for the info and clarification, PW.

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