Tuesday, September 21, 2010
Most major elements of the landmark law, part of an overall plan to extend coverage to 30 million Americans, won't be in place for nearly four years. In 2014, the law will require most Americans to obtain health insurance, and insurers will be prevented from rejecting applicants because of their pre-existing medical conditions.
But, six months to the day after President Obama signed the legislation, a number of consumer-friendly provisions will take effect, timed to the midterm elections.
In addition to the provisions dealing with young people, insurers will be prohibited from dropping members after they get sick for minor or inadvertent mistakes on their applications, and they will be required to cover preventive services, including cancer screenings and physicals, at no cost to consumers.
Many will still wait
Despite Thursday's milestone, many people won't be able to take advantage of the law's provisions until Jan. 1 or later. That's because the law allows for the changes to occur only when a new policy year starts, which for most employees with job-based coverage is Jan. 1."Although the provisions go into effect with policy years that start after or on Sept. 23, ... these provisions may not go into effect for some individuals until as much as 11 or 12 months from now," said Gerald Kominski, professor and associate director of the UCLA Center for Health Policy Research.
Renee Vargas found that out the hard way. The 23-year-old San Bruno woman, who graduated from UC Santa Cruz in 2009, had just been laid off from her job as a school photographer in June when her father received a letter from his insurer informing him that the policy change in the health reform law affecting young adults would be effective immediately.
"After we received that letter, I called my insurance provider through my work and canceled my insurance," said Vargas, explaining that the coverage cost more than her unemployment benefits. "Then, two weeks later, I don't have any insurance at all."
That's because the insurer failed to explain that the policy change depended on when the plan year started for her father's employer. In this case, Vargas would not be covered until July 2011.
Vargas, who was able to get back on her former employer's insurance and has since secured a new job with health benefits, said it was frustrating to receive conflicting information.
"It was scary, but I'm glad now we have answers," said Vargas, who is nonetheless relieved that she will have the option to go back on her parents' coverage in the next three years if necessary.
Small-business credit
Small businesses also have a lot at stake with the new law. The law will offer generous tax credits this year to firms with fewer than 25 full-time workers who have wages averaging less than $50,000 a year.Amy Thomas, owner of Pegasus Books in Oakland and Berkeley, has figured that had the law already been on the books, her business would have qualified for at least $30,000 in tax credits based on 2009 health costs for her employees. Thomas estimates she will receive more for 2010 because her premiums went up about 18 percent this year.
Thomas said she welcomes the relief offered in the new law, but wishes it went further by offering a government-administered health plan and addressing the underlying drivers of health cost increases.
"People talk a lot of about small businesses being the engine of the community and economy, but we don't see sales increases of 17, 18 percent a year," she said, adding that she spends about $84,000 a year on health costs.
"It's disappointing we couldn't do something more dramatic, but I'm really grateful for some of the provisions that will be there for people. We just can't keep sustaining these increases year after year."
