The American Recovery and Reinvestment Act “Changes for 2010”

On 3-23-2010, President Obama signed into law the most comprehensive healthcare reform in the history of the United States, the American Recovery and Reinvestment Act of 2009 (ARRA). The health insurance and healthcare world as we know it has changed forever. The healthcare reform bill is an issue being passionately debated across the country. Some Americans think it is very positive, some very negative and others who see it in the grey area believing some parts of the healthcare reform bill are positive and some negative. This article introduces the sweeping healthcare changes of 2010 which are part of the ARRA with an understanding that we will see additional, and still undetermined, reforms each year through 2018.

The final goal is for all Americans to have insurance by 2014. What follows is a list of the “top ten” changes you can expect to see happen just over the course of 2010.  While not every change is new to every state, the reform does mark a distinct step forward in the national attitude towards health care.

It bears mentioning that none of these changes are set in stone.  Many of these changes are the subject of ongoing negotiation: for example, the issue of lifetime dollar limits for medical insurance coverage is a source of constant debate, and may yet be introduced incrementally.  As of July 7th, 2010, all of these changes are accurate: but please understand that everything is subject to change, especially with potential changes in the political climate come November 2010.

What follows is the “top ten” list of Health Insurance changes for the year 2010, primarily after September 23rd.

No Pre-Existing Condition Exclusions for Anyone Under Age 19

Health Insurance Plans are prohibited from denying coverage to anyone under the age of 19 based on pre-existing condition. This ban includes both benefit limitations and coverage denials. This applies to both the individual market as well as all group health insurance plans. As a note, this is not new to several states: for example, New Jersey has eliminated Pre-Existing Condition (in most cases) Exclusions since 1994.  This will (ideally and eventually) be ramped up to forbid all pre-existing condition exclusions by 2014.

Plans Must Cover Dependent Children to Age 26

This condition means that qualifying health plans must cover an employee’s children, up to 26 years old. As long as their children do not have another source of employer-sponsored coverage, they will be able to be covered even if they live in different states. This benefit applies even to married children, but will not extend to their families (wife, husband, children).

Emergency Services

Whenever you receive emergency services it will always be paid in-network. Moreover, in an emergency you no longer have to agonize over hospital choices, you may go to any hospital for emergency services. Finally, there will be one less surprise after the fact, as you cannot be charged extra for using emergency care out of your network.

Full Time Employees

Full time employees are defined as employees working 30 hours per week, averaged over a month. Various states have had varying numbers of hours listed as 'full time:' this change is standardizing the term nation-wide.

No Lifetime Dollar Limits on Coverage

Insurers and employers are prohibited from imposing lifetime dollar limits in all health plans.  This is change which has many consequences for consumers, providers and insurers. And one that is causing quite a stir: it will probably be revised in the near future.

Preventative Health Care

In a landmark change, healthcare checkups cannot include any employee cost share: there will be no co- pay or co-insurance. The term most often used is “well care”. This strategy will (ideally) improve the health of our society and cost savings for consumer and insurance companies, by catching and stopping preventable diseases before they become expensive to treat. Currently, twenty percent of the population is responsible for eighty percent of healthcare claims: If we can keep this twenty percent healthier, everyone will benefit as a result.

Broader Doctor Choice

Health plan members are free to designate any available participating primary care physician (PCP) as their provider (Ex. Pediatrician for children, OB-GYN for women.)  Also, the need for referrals will be decreasing as plans cannot require a referral for OB-GYN care.

No Arbitrary Rescission of Insurance Coverage

Insurers and employers will be prohibited from rescinding coverage for individuals or groups of people, except in cases involving fraud or an intentional misrepresentation of material facts. This has been a high-profile problem in many states, and provides a coup for consumer protection.

Early Retirees

Employers providing early retiree coverage (over 55 to 64) may participate in a temporary re-imbursement program while the $5 billion put aside lasts.  This will operate on a first come, first serve basis, and the $5 billion will not be refreshed once it is spent.

Medicare Part D Subsidy

Employers that provide a Medicare Part D subsidy to retirees will have to account for the future loss of deductibility of this subsidy on liability and income statement. Companies which can receive a deductible for Medicare Part D will no longer be able to.

Health Care Reform in 2010 and beyond is a rapidly changing landscape. No one can afford to ignore the changes. Keeping up to date with the changes and considering how they effect employee benefits and consumer rights are critical concerns which will be perilous if ignored. You are on the right path reading articles on this topic.

About The Author

Aida G. Visakay, President/CEO, CFP

The CEO and Director of Employee Benefits, has over 25 years experience specializing in employee benefits. In her position, she is responsible for overseeing and managing all operational activities of AxisPointe, Inc. Aida is a graduate of Rowan University with a Bachelor of Arts degree in Business and Spanish.  She is started out as an agent with Prudential Insurance Company five years prior to forming AxisPointe, Inc.  As the principal owner of AxisPointe, Inc. she brings strong leadership skills, extensive knowledge in negotiating, managing and implementing employee group plans for both the private and public sector.  By employing an entrepreneurial philosophy and a passion for her work, she has proven to be the cornerstone of a rapid, client-focused path she forged with all of her clients.

Ms. Visakay’s commitment to expanding diversity and advancing women in the corporate world has been recognized by several organizations. Aida is a current member of the National Association of Health Underwriters, the Morris County Society of Human Resource Management (SHRM), and the Executive Women of New Jersey. She is also a member of the Morris County Chamber of Commerce where she is involved with the Government Affairs Committee and was elected to the Women in Business Steering Committee. Aida is an appointed representative with all the health and life insurance carriers in the state, and currently holds a Life, Health, Property/Casualty, and NASD Series Six licenses. She also holds licenses in the states of New Jersey, New York, Florida, Connecticut, Ohio, and California.