For someone who is 50-Something, with young adult children and years to go before qualifying for Medicare, how will I and my children benefit from this new legislation? I want to know how Health Care Reform will save me money. Here are some of the features of the bill that will affect a lot of 50-Somethings.
Starting in September of 2010, dependent children up to age 26 will be eligible for coverage on their parents’ health plans (without having to be a full-time student to receive this coverage). An adult dependent child is considered dependent if you, the parent, pay for 50% or more of that adult dependent child’s cost of living (upkeep) for a full calendar year (taxable year).
Starting in 2010, many health plans will be prohibited from placing lifetime limits on medical coverage, prohibited from retroactively canceling policies on people who become ill, and (in September) prohibited from denying coverage to children with pre-existing conditions.
Starting in June 2010, if you have been locked out of the insurance market because of a pre-existing condition then you will be eligible for subsidized coverage through a new high-risk insurance program. And starting in 2014, insurance companies will be prohibited from denying coverage to people with pre-existing conditions.
Starting in September 2010, insurance firms will face new limits on administrative costs and executive compensation. Funds will be provided to states to review unreasonable insurance premium rate hikes. It is anticipated that people with moderate incomes will benefit from this financially because their health insurance premiums will remains more reasonable. (And starting in 2014, people with incomes below four times the federal poverty level will receive tax credits to help pay the cost of insurance premiums.)
Starting in 2013, families with an annual income of $250,000 or more will have to pay a 3.8% tax on their investment income and will be required to contribute more to the Medicare program (taken from their payroll taxes).
Starting in 2014, employers with 50 employees or more will be required to provide health coverage to all employees or face a federal fine. If you work in one of these types of businesses and have not had health insurance through work in the past then you can look forward to having coverage offered to you starting in 2014.
Starting in 2014, new state-run insurance exchanges will offer coverage at a more affordable competitive rate to people who wish to buy into this option. This opportunity will make it possible for self-employed people who are getting older and therefore have more pre-existing conditions to buy affordable health coverage. Note that this opportunity will make it possible for more people to retire at 65. This is the case because many people who currently receive health benefits through their employer for coverage of themselves and a younger spouse are unable to retire without losing the younger spouse’s health coverage. Starting in 2014, the older spouse can retire at 65 and the younger spouse can obtain coverage through an insurance exchange. Note that having coverage available through these insurance exchanges will also make it possible for people who are unhappy in their job, but who are staying mainly for the health coverage, to leave that job.
Starting in 2014, all lifetime and annual limits on coverage will be prohibited and new policies will be required to meet higher benefit standards.
Starting in 2014, people who do not have health insurance will be fined by the federal government. In that first year, the fine will be $95 or 1% of income (whichever is more). (The fine will be raised over time to $695 or 2% of income.) People with low and moderate incomes (as yet to be defined) will not be fined. People who can’t find a policy that costs less than 8% of their income will not be fined.
Starting in 2014, if your income is less than four times the federal poverty level, and your insurance premium costs more than 8% but less than 9.8% of your income, you can receive a voucher from your employer to buy into a health insurance exchange.
More people under age 65 with low and moderate incomes will be eligible for Medicaid. Households with an income of up to 133% of the federal poverty level (about $29,000 for a family of four) will be eligible. Households between 133% and 400% (incomes between $29,000 and $88,000 for a family of four) of the federal poverty level will be eligible for health insurance premium subsidies through the insurance exchanges.
For our family, these changes mean that my husband can retire at 65 without worrying about my health coverage and two of my adult children will be able to continue on my husband’s health plan in the coming year rather than paying for costlier private plans that do not include dental or vision benefits. The immediate cost savings for us will be close to $2,000 per year and my husband is jubilant that he can actually entertain the thought of retiring in a few years. So far so good. It remains to be seen how the changes will actually play out.