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Your Health Care: What's Next

Kimberly Lankford

Be prepared for changes to your health care coverage now that the Supreme Court has upheld health care reform.



Now that the Supreme Court has upheld the health care law, what does this mean for my coverage? And what changes do I need to be prepared for?

SEE ALSO: 30 Ways to Save on Health Care

Your current health care coverage won’t change because of the Supreme Court’s decision, but you should be prepared for several changes that are scheduled to take place in the next year and a half. Here’s what the new law involves, along with strategies to make the most of it.

A mandate to buy health insurance, and new ways to find it. One of the biggest and most controversial changes to health coverage takes place in 2014, when everyone will be required to get insurance or pay a penalty (or tax, as the Supreme Court calls it). The way people buy health insurance will change significantly. If you have coverage through a small group or on your own, you’ll be able to buy your policy through a state-run health insurance exchange. Low- to middle-income people will qualify for subsidies to help them pay for the coverage, which will automatically be applied to their premiums if they buy the coverage through the exchanges. About one-third of the states have been moving forward with the development of these exchanges over the past few years, but many of the others had been waiting for the Supreme Court decision before they did much work on the exchanges. These states will need to show the government by January 2013 that they have made enough progress to be able to open by January 2014, or the federal government will put up the exchange in that state. Until then, you can find a comprehensive list of the policies available in your area at HealthCare.gov, or get price quotes at eHealthInsurance.com.

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Coverage for pre-existing conditions. Another big change in 2014 will be the requirement that insurers cover everyone regardless of their health. Until then, insurers can deny coverage or charge higher rates to people with health conditions. If you have a health problem and need coverage now, you may be able to find it through your state high-risk insurance pool. Many states currently have two kinds of high-risk pools: The Pre-Existing Condition Insurance Plans, which were created as part of the health care law but require that you be uninsured for six months before coverage kicks in, and the already-established state high-risk pools, which charge higher premiums but may not require that you be uninsured for six months first. See HealthCare.gov for more information about the high-risk pools in your state, or see CoverageForAll.org for more information, state resources and strategies for getting coverage if you have health issues.

Coverage for young adults. Young adults will continue to be eligible to stay on their parents’ health insurance policies until age 26. If your child is moving away from home (and out of your plan network) and is healthy, he or she might find better coverage with an individual policy – and it may even cost less than what you would pay if you don’t have other children on your policy. See Health Coverage for College Grads for details.

Coverage for preventive care. Most policies must provide some preventive care with no out-of-pocket expenses, regardless of the deductible. This provision makes high-deductible policies an even better deal than they once were, especially for relatively healthy people who visit the doctor primarily for their annual check-ups and tests but who need high coverage limits for unexpected illnesses and emergencies. If you have a deductible of $1,200 for individual coverage (or $2,400 for family coverage), you can make tax-deductible contributions to a health savings account and use the money tax-free for medical expenses in any year. See Take Advantage of Expanded Preventive Care Coverage and What to Know About Health Savings Accounts.

Consumer rebates arriving. The health care law requires insurers to use at least 80% of their premiums for medical care and quality improvements (or 85% for large-group plans), a figure called the “medical loss ratio.” Companies that didn’t meet these standards for 2011 have to pay rebates to consumers by August 1, 2012. Many insurers made changes to their plans and cost structures so they could avoid having to pay the rebates. Employers will generally receive the rebates for group plans, but you could receive a check or discount on future premiums if you have individual coverage, and you should be hearing from your insurer soon.

Shrinking flexible-spending accounts. Many employers currently let you set aside $3,000 to $4,000 of pretax money in a flexible spending account for out-of-pocket medical expenses. That maximum limit will shrink to $2,500 in 2013. If you expect to have any major uninsured medical expenses soon and have socked away enough money this year to cover them, use the money for those expenses and save the less-costly procedures for next year, when the limit shrinks.

Smaller Medicare Part D doughnut hole. Medicare Part D prescription-drug plans have always had a gap in coverage known as the doughnut hole. The coverage pays until your drug costs reach a certain level; you have to pay out of pocket until they reach the next level, at which point coverage resumes. There is currently a 50% discount on brand-name drugs that kicks in while you are in the doughnut hole, and a federal subsidy of 14% helps cover the cost of generics. Both of these breaks will increase in 2013 and close the gap even further – with a 52.5% discount on brand-name drugs and 21% subsidy for generics (go to www.medicare.gov/find-a-plan to compare plans and prices in your area for your particular drugs).

Year-round Medicare Advantage plan switch. Most people over 65 who get their medical and prescription-drug coverage through a Medicare Advantage plan can only switch plans during open-enrollment season in the fall (from October 15 to December 7), with the new plan taking effect January 1. But the health care law lets people who have access to a Medicare Advantage plan with a five-star quality rating switch plans anytime during the year (you can only switch once outside of open enrollment). This special rule doesn’t help a lot of people yet – there are only 12 five-star Medicare Advantage plans in the U.S. in 2012 – but many more plans are expected to get the five-star rating next year. See Some Can Switch Medicare Advantage Plans Mid-Year for more information and to find out if there is a five-star plan in your area.

Got a question? Ask Kim at askkim@kiplinger.com.



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