How Healthcare Reform Impacts Caregivers
By John Mills
A few weeks ago President Obama signed into law a new healthcare reform bill which will expand health insurance coverage for 32 million people who are currently uninsured. This law will be phased in over the next decade but it offers a lot to help family caregivers both in the short term and the long term.
The benefits of the law fall into two categories – provisions which help the care recipient through Medicare and other public programs and those that help the caregiver through expanded health insurance coverage and better consumer protections. The biggest advantages to care recipients come through better coverage under the Medicare prescription drug program and through expanded health insurance options for pre-Medicare retirees.
Family caregivers will see their biggest benefits come from the fact that health insurance will begin to be de-coupled from employment starting in 2014. Many family caregivers face the difficult choice of whether to stay employed and hire professional caregivers to look after their loved ones or to leave their jobs and care for them full time. This decision is made more difficult by the fact that people who leave their jobs risk losing the health insurance benefits that go with them. By providing new health coverage options and subsidies to help pay for them, family caregivers will have one less thing to worry about when making these difficult choices.
Below is an outline of the key provisions of the healthcare reform law and how they are likely to impact family caregivers.
What Goes Into Effect during 2010 and 2011
The expansion of coverage provided by the new healthcare reform law will not be available until 2014 but there are many portions of the law which will go into effect during 2010 and 2011.
Improvements to Medicare Prescription Drug Coverage - The bill provides a $250 “bonus” to all people in a Medicare Prescription drug program in 2010 that hit the “doughnut hole,” the coverage gap that currently begins at $2,830. It also begins closing the “doughnut hole” in 2011 and completely eliminates it by 2020.
Helping Sandwich Generation Caregivers – The bill helps sandwich generation caregivers, those caring for sick parents or relatives and their own children, by:
Eliminating pre-existing conditions for children thereby ensuring sick children can get insurance coverage.
Permitting children up to age 26 to stay on their parents insurance policies regardless of whether or not they are full-time students. Most insurers currently cover dependents not in school only up to age 19 and those in school up to age 23.
Prohibiting lifetime benefits caps on health insurance.
Temporary Early Retiree Program – The law creates a temporary voluntary reinsurance program for employers to help cover early retirees within 90 days of enactment. This should help pre-Medicare retirees find affordable coverage. The program ends in 2014 when the expanded coverage provisions come online.
Medicare Advantage Changes – The law changes the way that Medicare Advantage plans are paid by bringing payments into line with the costs of the regular Medicare program. These payment changes may impact the benefits provided under these plans so review plans carefully at renewal time.
2011 and Beyond
The bulk of the new benefits and subsidies for health insurance will begin in 2014. The lead time is necessary to accumulate funds to pay for the cost of the new coverage.
Expanded Health Insurance Coverage – Starting in 2014, expanded health insurance options will be available for individuals and small business through Health Insurance Exchanges. These are state-based marketplaces that are modeled on the Massachusetts Health Connector system where individuals and small businesses are able to purchase health insurance. The goal is to provide individuals and small businesses with transparency in benefits and pricing so they can compare health insurance and purchase the coverage that best fits their needs.
Health Insurance Subsidies. In order to help families afford the mandatory insurance premiums, starting in 2014 subsidies will be available on a sliding scale, up to a level of $88,000 per year for a family of four. The amount of the subsidies will also be on a sliding scale, meaning that people with lower incomes will receive larger benefits.
Individual Mandate - Almost all Americans will be required to get insurance coverage or face fines—a system similar to the one that’s already in place in Massachusetts. The fines start small at $95 in 2014, but rise rapidly to $695 in 2016. Low-income individuals are exempted from the mandate but most of them will be eligible for coverage through Medicaid or other subsidies.
Consumer Protections – The law has a number of consumer protections including:
Elimination of pre-existing conditions.
Prohibition on recissions, a procedure where insurance companies retroactively cancel coverage.
Expanded appeals for denial of medical services including the ability to appeal decisions to an external review board.
Long Term Care. The bill includes the CLASS Act, which provides a public, voluntary long term care program that working people can purchase. The program would cover home care, respite care, home modifications, transportation, and assistive technologies.
What’s Next
The lesson of social insurance programs is that they always remain works-in-progress. Social Security and Medicare have been modified and expanded a great deal since they were first enacted.
It is likely that there will be expansion and changes to the new healthcare reform law in the coming years. With the aging of the population and people living longer, some of those changes may include additional assistance for the cost of long term care and family caregivers.
John Mills is founder of www.eCareDiary.com, a website for family caregivers. He was a member of the Clinton Task Force on National Health Reform, and legislative director to U.S. Rep. Eliot Engel, D-N.Y.