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Health Care Reform Demystified

Health Care Reform Demystified: Why Health Care Reform Matters

With U. Horace Cartwright

The more you know about the Patient Protection and Affordable Care Act, the better prepared you'll be to make smart decisions about your coverage. Take a moment to learn about preventive care coverage, health benefit exchanges, tax breaks for small businesses, and more.

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Health Care Reform Demystified: Why Health Care Reform Matters Welcome to Health care Reform Demystified. Today’s episode: Why Health care Reform Matters. The Patient Protection and Affordable Care Act, often referred to as Health care reform has more pages than the New York City phone book. Its impact on the health care industry, employers, and individuals is just beginning to be felt and many of its provisions won’t take effect until 2014. All the same no recent act of government has inspired more conversation or controversy. Some think that the Affordable Care Act is just what the country needs. Some think it goes too far in requiring people to have health care coverage. While others think it doesn’t go nearly far enough in providing coverage for those at risk of falling through the cracks. I’m not here to convince you one way or the other but I would like to talk about why the idea of health reform and the specifics of the Affordable Care Act matter to you. So, let’s start with the basics. How did we get here? The biggest issue driving the health care debate is our old friend, money. Health care costs are growing and fast. How fast? Faster than the rate of inflation, which is never good news. And while people on both sides of the issue will quibble about why costs are on the rise, they agree that something has to be done to get them under control. Issue number two is money’s second cousin, access. As costs increase more Americans are getting left out of the health care system all together. When the health reform law was passed, in 2010, it was estimated that nearly 50 million Americans did not have health insurance. Some people could be denied coverage due to pre-existing health conditions. Some plans had lifetime or annual dollar limits on benefits, which could leave people without health care coverage at the time when they need it the most. On the employer side, businesses saw their premiums go up if their employees got sick or injured. Making insurance coverage more difficult to afford. All together it was estimated that one in six Americans had no health insurance. So, now that we’ve got an idea of the challenges that prompted health care reform, let’s take a look at some of the things the Affordable Care Act does to address them. Some of the first changes, made under the law, are the elimination of coverage rescissions except in the case of fraud. The end of pre-existing condition limitations for children under the age of 19. And, the elimination of lifetime and annual limits on coverage. Check out my video on lifetime and annual limits for more information on these changes. The law requires each state to establish a Health Benefit Exchange by January 1, 2014. This is intended to create a competitive marketplace for Americans shopping for health insurance. Insurers must spend a certain percentage of premium dollars on heath care services like paying claims and improving health care quality. The percentage that Insurers spend on health care in contrast to the percentage spent on administrative services is called the Medical Loss Ratio. Insurers are required to maintain medical loss ratios at 80% for small group or individual plans, and 85% for large group plans. Some small business owners may get tax breaks to help make offering their employees more affordable. If you are a small business with fewer than 25 full-time workers, check out the small business tax credit video to see if you are eligible for this credit. Beyond that, health plan members may also enjoy new benefits. Certain important preventive services are now available without copays, coinsurance or deductibles. I dug a little deeper into this in the video called, Preventive Services. Also, health plans that provide coverage for dependents are now required to cover adult children until they reach age 26. See the video call Dependent Coverage for more on that. And if your plan denies coverage for a procedure or service that you believe should covered, you have the right to appeal that decision. To learn more about this, take a gander at the Appeals video. Finally, if you have a flexible spending account, heath reimbursement account or health savings account you’ll want to take in the video on how the Affordable Care Act effects those accounts. I simply could not conclude without reminding you that there are exceptions to every rule and the Affordable Care Act is no exception. Not all provisions of the law applying to self-funded plans and plans in effect as of March 23, 2010 may be considered grandfathered and therefore exempt from some provisions of the health reform law. You can learn more in my video about Grandfather Plans. The Affordable Care Act is a remarkably large and complex piece of legislation. I’ve taken a shot at simplifying some of the most important elements in the new law in a series of videos like this one and new videos will be added to help make sense of other provisions in the future. And, on that note it’s time for me to hit the books again. Wish me luck. Narrator: If you have questions about your benefit plan, please call the toll-free number on the back of your health plan ID card. (whistling)