Health Reform Gives Some Immediate Benefits for Californians

Health Reform Gives Some Immediate Benefits for Californians

Health care reform changes are vast and include many changes that will affect Americans now and in the future. While we’ve focused several articles on the changes affecting Medicare and Medicare beneficiaries, this article below, focuses on those affecting Californians old and young. Excerpted from the Passages HICAP Recap July-August 2010 newsletter (PDF), this article lists some of these changes and explains some of the immediate benefits impacting Californians.

Small business tax credits

503,000 small businesses in California could be helped by a new small business tax credit that makes it easier for businesses to provide coverage to their workers and makes premiums more affordable. Small businesses pay, on average, 18% more than large businesses for the same coverage, and health insurance premiums have gone up three 3 faster than wages in the past 10 years. This tax credit is just the first step towards bringing those costs down and making coverage affordable for small businesses.

Closing the Medicare Part D donut hole

Last year, roughly 382,000 Medicare beneficiaries in California hit the donut hole, or gap in Medicare Part D drug coverage, and received no extra help to defray the cost of their prescription drugs. Medicare beneficiaries in California who hit the gap this year will automatically be mailed a one-time $250 rebate check. These checks began being sent to beneficiaries in mid-June and will be mailed monthly throughout the year as new beneficiaries hit the donut hole. The new law continues to provide additional discounts for seniors on Medicare in the years ahead and completely closes the donut hole by 2020. (See our past blog article, Are You Eligible for the Part D Rebate: Q & A for more info.)

Support for health coverage for early retirees

An estimated 430,000 people from California retired before they were eligible for Medicare and have health coverage through their former employers. Unfortunately, the number of firms that provide health coverage to their retirees has decreased over time. On June 1, 2010, a $5 billion temporary early retiree reinsurance program started to help stabilize early retiree coverage and help ensure that firms continue to provide health coverage to their early retirees. Companies, unions, and state and local governments are eligible for these benefits.

New consumer protections in the insurance market beginning on or after September 23, 2010

  • Insurance companies will no longer be able to place lifetime limits on the coverage they provide, ensuring that the 19 million California residents with private insurance coverage never have to worry about their coverage running out and facing catastrophic out-of-pocket costs.
  • Insurance companies will be banned from dropping people from coverage when they get sick, protecting the 2.7 million individuals who purchase insurance in the individual market from dishonest insurance practices.
  • Insurance companies will not be able to exclude children from coverage because of a preexisting condition, giving parents across California peace of mind.
  • Insurance plans’ use of annual limits will be tightly regulated to ensure access to needed care. This will protect the 16.2 million residents of California with health insurance from their employer, along with anyone who signs up with a new insurance plan in California.

Health insurers offering new plans will have to develop an appeals process to make it easy for enrollees to dispute the denial of a medical claim. Patients’ choice of doctors will be protected by allowing plan members in new plans to pick any participating primary care provider, prohibiting insurers from requiring prior authorization before a woman sees an ob-gyn, and ensuring access to emergency care.

Extended coverage to young adults

Beginning on or after September 23, 2010, plans and issuers that offer coverage to children on their parents’ policy must allow children to remain on their parents’ policy until they turn 26, unless the adult child has another offer of job-based coverage in some cases. This provision will bring relief to roughly 196,000 individuals in California who could now have quality affordable coverage through their parents. Some employers and the vast majority of insurers have agreed to cover adult children immediately.

Affordable insurance for uninsured with preexisting conditions

$761 million federal dollars are available to California starting July 1 to provide coverage for uninsured residents with pre-existing medical conditions through a new transitional high-risk pool program, funded entirely by the Federal government. The program is a bridge to 2014, when Americans will have access to affordable coverage options in the new health insurance exchanges and insurance companies will be prohibited from denying coverage to Americans with pre-existing conditions. If states choose not to run the program, the Federal government will administer the program for those residents.

Strengthening community health centers

Beginning on October 1, 2010, increased funding for Community Health Centers will help nearly double the number of patients seen over the next 5 years. The funding could not only help the 1,049 Community Health Centers in California but also support the construction of the new centers.

 

More doctors where people need them

Beginning October 1, 2010, the Act will provide funding for the National Health Service Corps ($1.5 billion over 5 years) for scholarships to help the 1,049 Community Health Centers in California but also support the construction of new centers and loan repayments for doctors, nurses and other health care providers who work in areas with a shortage of health professionals. This will help the 9% of California’s population who live in an underserved area.

New Medicaid options for states

For the first time, California has the option of Federal Medicaid funding for coverage for all low-income populations, irrespective of age, disability, or family status. For more information on health care reform issues visit: www.healthcare.gov.

Also see our article, What Does Health Care Reform Mean for Beneficiaries? Summary of Key Provisions.

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.

3 Comments

  1. Laurel Schulman 8 years ago

    Hi Karen,

    My husband and I are in our early 60’s and unemployed, but currently on Cobra. Thanks to the Federal Government’s 65% subsidy, our monthly payment to Blue Shield of California has been around $500 per month.

    On October 1, 2010, the subsidy runs out and our new monthly payment will be roughly $1450.

    Can you point us to a resource for a lower cost PPO insurer, and explain how the $761 million for California residents is used?

    Many thanks,

    Laurel Schulman

  2. Karen Fletcher 8 years ago

    Hi Mrs. Schulman,
    Thank you for your comment. I don’t have specific information on insurance options for you and your husband, but one helpful resource is the Foundation for Health Coverage Education http://www.coverageforall.org/. While their website is not comprehensive, it does have good information on both public and private health insurance options.

    For more information on health care reform and where health care reform dollars are going in California see Health Access

    Here’s the government’s website on COBRA and COBRA related questions. It may have some good resources for you both as well. http://www.dol.gov/dol/topic/health-plans/cobra.htm

    I hope these links will be of help to you, Mrs. Schulman. I wish you and your husband the best and very good health!

    Warm regards,
    Karen

  3. Karen Fletcher 8 years ago

    Hi Mr. Murray,
    Thanks for your comment. The physicians payment cut actually is not related to the new Medicare benefits. It’s an old payment formula called the Medicare sustainable growth rate formula that determines what payment doctors receive. It is outdated and Congress has not addressed revising or doing away with this formula. Instead they’ve been passing a series of short-term fixes. Each time a “fix” is about to expire, the payment cut due under this formula is substantially greater.

    The new Medicare benefits coming with health care reform have nothing to do with this impending payment cut.
    Here’s a recent news article on the physician payment cut problem with links to several other articles as well.

    Thank you again for writing.

    Warm regards,
    Karen

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