o Penalties will apply beginning in 2014 for any one who does not purchase health insurance.
o The uninsured and self-employed would be able to purchase insurance through the state, with subsidies available for those with income between 133% and 400% of the FPL. Individuals and families with income between 100% and 400% of the FPL will be able to purchase their own insurance with subsidies available (with exceptions).
o A person without insurance would have to pay whichever is greater: $695 per uninsured family member, up to a maximum of $2,085, or 2.5% of household income.
EFFECT ON SENIORS:
o Of perhaps greatest interest to seniors, the law will eventually close the Medicare Part D coverage gap known as the "donut hole." The Medicare Part D prescription drug program presently covers medications up to $2,830 per year, and then stops until the beneficiary's out-of-pocket spending reaches $4,550 in the same year, when coverage begins again. Many seniors fall into this "donut hole" around Labor Day, at which point they have to pay for their medications out of pocket through the end of the year.
o The law starts the process of closing the gap by providing a $250 tax-free rebate to Medicare beneficiaries who fall into the donut hole in 2010. Then, beginning in 2011, there will be a 50% discount on prescription drugs in the gap, and the gap will be closed completely by 2020, with beneficiaries covering only 25% of the cost of drugs up until they have spent so much on prescriptions that Medicare's catastrophic coverage kicks in, at which point co-payments drop to only 5%.
INCENTIVES TO SHIFT FROM INSTITUTIONALIZING PEOPLE WITH CHRONIC NEEDS TO PROVIDING CARE AT HOME:
o The goal is to have states create one-stop shops for consumer information on long-term care services and support. Additional support will be available for aging and disability resource centers.
o States will now have increased options for providing long-term care services and supports. Coverage may be provided for services that assist individuals with Activities of Daily Living (ADLs).
o Costs related to a transition from a facility to the community will now be covered.
CLASS ACT (Community Living Assistance Services and Supports)
o A voluntary, self-funded insurance program to begin in 2011, which will provide a lifetime cash benefit that offers protection against the costs of long-term care services. The benefit is $50 per day.
o All individuals will be automatically enrolled, but have the chance to opt out.
o To be eligible for this benefit, one must pay premiums for 5 years AND must be working for at least 3 of the 5 years. The CLASS Act will not be an option for those who are already disabled and unable to work or those who are retired.
EFFECT ON LONG-TERM CARE FACILITIES:
Extensive provisions have been made to improve:
o Information disclosure and quality of care;
o Enforcement of protective measures;
o Staff employment and training including dementia and abuse training for staff.
EFFECT ON LOW-INCOME OLDER ADULTS:
o Medicaid coverage will be expanded to adults under 65 with incomes below 133% of Federal Poverty Level (FPL).
o Part D co-payments will be eliminated for individuals receiving Medicaid home and community based services.
o A low-income subsidy will increase the number of zero premium plans into which low income subsidy recipients can enroll.
o The low-income subsidy eligibility of an individual whose spouse dies will be extended by one year.
EFFECT ON THOSE UNDER AGE 65:
o The new law expands coverage not only through Medicaid but also through the creation of Exchanges which individuals can use to purchase coverage from a private health insurance plan. Low income individuals will qualify for subsidies to make the coverage provided in the Exchange more affordable. The Exchanges will provide a lifeline to individuals under age 65 who are currently uninsured,. Individuals 65 and over will remain covered by Medicare and are not eligible for the Exchanges.
o Beginning in 2014, insurance companies cannot deny coverage to anyone with pre-existing conditions.
EFFECT ON YOUR TAXES:
o Taxes on Medicare payroll will increase from 0.9% to 2.35%.
o Investment income taxes will increase 3.8% on unearned income, such as dividends and interest for taxpayers earning more than $250,000 joint/$200,000 individual.
o The threshold for itemized medical deductions will rise from 7.5% of adjusted gross income to 10% (seniors over 65 will be exempt from this rise until 2016).
o The law also will limit the amount of money you can put in a flexible spending account to pay medical expenses to $2,500 starting in 2013.
KEY PROVISIONS THAT THE REFORM AFFECTS IMMEDIATELY
o Begins to close the Medicare Part D "donut hole."
o Free preventive care under Medicare and under new private plans.
o Help for early retirees (age 55-64) via a temporary program that offsets the costs of expensive health claims for employers.
o Immediate help for those uninsured because of a pre-existing condition.
o Extended coverage for young people up to 26 yeas of age.
o Health insurance consumer information provided to help with filing of complaints and appeals.
o Bans health plans from dropping people.
o Bans lifetime limits and restricts annual limits on coverage.
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