2010 was a momentous year for the American health care system. In March, Congress passed—and President Barack Obama signed—landmark legislation that reforms the health insurance market, provides all Americans with affordable access to health coverage, and reduces the growth of health care costs.
The Department of Health and Human Services and other parts of the executive branch have begun to implement the new law in the subsequent 10 months. The Affordable Care Act, or ACA, includes many benefits for Americans who have health insurance today and those who have struggled to find and maintain health coverage. Many of these benefits came on-line in 2010.
Signature achievements include:
- Establishing pre-existing condition insurance plans in every state so that individuals with health problems who cannot find coverage in the regular market have a reliable source of coverage
- Requiring employer-sponsored health plans to offer coverage to the young-adult children of policyholders
- Helping employers with unpredictable health care spending for retired workers
- Providing more than 1 million rebate checks to Medicare enrollees who incurred high out-of-pocket prescription drug spending in 2010
- Prohibiting health insurance plans from denying coverage to children with pre-existing conditions
- Protecting individuals with high health care costs from the financial risk of absurdly low annual and lifetime limits on their benefits
- Prohibiting health insurance plans from rescinding coverage when a policyholder gets sick
These changes bring a new degree of stability and security to millions of Americans’ health coverage. And even more improvements are around the corner. Beginning this month, seniors will enjoy meaningful new benefits and significant improvements in their prescription drug coverage, while individuals and businesses will receive premium rebates from their insurance company when the insurers incur excessive administrative costs.
Specific improvements in 2011 include:
- Closing the Medicare prescription drug coverage gap. Seniors and people with disabilities who obtain prescription drug coverage through Medicare Part D will enjoy a new discount on brand-name and generic prescription drugs when they hit the so-called “doughnut hole” in their Part D benefits. Since the beginning of the program, enrollees have hit a gap in coverage when their total drug spending—including out-of-pocket costs and expenses covered by their Medicare Part D plan—exceeds a preset limit (currently $2,830). Patients then pay the total cost of their prescription drugs, without help from their drug plan, until their total drug expenses hit an upper limit and coverage kicks in again. With the new discount, people with drug spending high enough to hit the coverage gap will save almost $500 on average this year, while people with very high drug costs will save more than $1,500.
- Launching new prevention benefits for Medicare enrollees. Good coverage of preventive services helps seniors and other Medicare enrollees better manage their health. New benefits include coverage without cost-sharing for recommended preventive services (those that receive an “A” or “B” rating from the U.S. Preventive Services Task Force) and new coverage for a personal prevention plan.
- Increasing access to primary care. Medicare will pay primary care providers a 10 percent bonus payment, which offers a new incentive for physicians, nurses, and others to provide primary care services.
- Requiring insurers to provide high value for premium dollars. Beginning in 2011, insurers will pay rebates to policyholders—individuals and employers—when plan spending on clinical services falls below 80 percent of premium revenue in the individual and small group market, and 85 percent of premium revenue in the large group market.
Looking ahead, ACA provisions that will touch real people every day will continue coming on-line through 2011. These include providing more consumer information on healthy food choices by requiring chain restaurants and vending machines to provide nutritional data no later than March, and improving long-term care by sending enhanced federal Medicaid payments to support new state investments in community-based long-term care services starting in October. Tangible improvements will continue beyond this year, such as fully closing the coverage gap in Medicare Part D and improving Medicaid coverage for preventive care.
The Affordable Care Act’s most striking impact will come in 2014 when new health insurance exchanges launch, premium subsidies become available, and Medicaid coverage expands to include all low-income individuals regardless of family composition, age, or disability status.
These headline-grabbing changes in our health care system may be a few years down the road. But millions of Americans are already benefiting from the Affordable Care Act—and millions more will receive better care in the near future thanks to the changes in the new law.
Karen Davenport is Director of Health Policy at American Progress.