Complexity Of Obamacare Forces Experts To Admit, ‘I Don’T Know’

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Tom Russell

The health care reform law is touted as being comprehensive. Tom Russell of Tom Russell and Associates, who specializes in senior health and life insurance, says, “It’s a big, big problem. It’s a complex problem.”

Russell was the guest speaker at the Sept. 30 Business Buzz meeting on the 2010 Health Care Reform law, hosted by the Rim Country Regional Chamber of Commerce.

The law is still being sorted out by professionals, and sometimes they have to answer questions about it with the response, “I don’t know.”

What they do know might change if the political wave of anti-incumbents sweeps in a new majority in Congress based on promises to get rid of “Obamacare.”

At the Business Buzz meeting, Russell offered the following.

The law makes changes to individual, business, Medicare and Medicaid plans.

Russell recommends visiting the healthcare.com site for easy-to-navigate information about the law.

Another good site online is one provided by AARP, which is a supporter of Obamacare.

Russell gave the following highlights of the law:

• Companies may no longer deny coverage for preexisting conditions in children under 19. As a consequence of the new law, he said, no company in Arizona is selling child-only policies. Firms that were selling the policies ended that practice early this year in Arizona and in a number of other states.

• Children can stay on a parent’s plan to age 26, regardless of whether they are enrolled in school, married or living with a parent.

• Companies can no longer impose lifetime limits or annual caps on the amount paid for a client’s treatment and health care.

• Preventative care coverage must be provided.

• Companies can no longer make clients pay more for out-of-network emergency care.

• The law makes it more difficult for insurance companies to rescind policies; they can’t be rescinded retroactively and must give 30 days notice.

As explained on the AARP site, health insurance companies can’t drop an individual’s health coverage if they become sick. Insurance is guaranteed as long as the individual pays their premiums.

• Employers can no longer cancel insurance for employees ages 55 to 65.

• If individuals don’t buy insurance, they can be penalized up to 2-1/2 percent of their gross income.

• 85 percent of what is paid into insurance must go to claims.

For employees with group insurance, not much will change, Russell said. However, employers are facing a mine field if they don’t work with an insurance broker, he added. A number of major businesses are threatening to just pay a penalty and eliminate health insurance as a benefit for employees as a result of rising health care costs.

Scott Flake, a representative with Edward Jones in Payson, who served as master of ceremonies at the event, provided a timeline on when the various parts of the law will become effective. The company obtained the information from The Henry J. Kaiser Family Foundation of Menlo Park, Calif.

• 2010 — already in place as of September 2010 — insurance companies will no longer be able to deny children coverage based on a pre-existing condition; dependents will be allowed to stay on parents’ policies through age 26; Medicare payments in mostly rural areas will increase for two years while other Medicare cuts will begin to be phased in; seniors whose prescription drug benefits reach the coverage ceiling of “donut hole,” will receive a $250 rebate.

• 2011 — seniors in the prescription gap will receive a 50-percent discount on brand name drugs; although there is no public health option, states will receive funding to set up exchanges where the uninsured and self-employed can buy insurance, with subsidies provided for those with income up to 400 percent of the federal poverty level.

• 2013 — the Medicare Payroll Tax will increase from 2.9 percent to 3.8 percent for upper-income workers (individuals earning more than $200,000 and couples filing jointly earning more than $250,000); the higher tax rate will also expand to include investment income for higher-income investors.

• 2014 — all citizens will be required to have health insurance or pay a penalty of $695 per person or 2.5 percent of household income, whichever is greater and the penalty increases over time; employers must offer “affordable coverage” or pay a penalty for employees who receive tax credits for health insurance through an exchange; separate exchanges will be created for businesses with fewer than 100 employees to purchase insurance and exempt them from penalties; insurance companies can no longer impose any restrictions based on pre-existing conditions in adults; Medicaid will be expanded to 133 percent of the poverty level for everyone under age 65.

The Edward Jones/Kaiser document states, “More provisions are scheduled through the end of the decade, and there may be modifications to the law over time.” John Stanton, executive director of the chamber, said as needed, additional programs on the health care reform law will be presented.

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