Newsletter Issue 1

Health Reform & You

As our politicians try to hammer out the differences between the House and Senate versions of a health reform act, the general public remains nervous. Nobody is quite sure what it will mean to them! The one thing we can anticipate, however, is that the House negotiators will probably acquiesce to the Senate version in a major way. The reason is that the Senate Democrats cannot afford the loss of a single vote.

In January, Newsweek magazine provided one of the most useful and informative articles about how this reform bill will actually affect you, the private citizen. Remember none of this is confirmed, none of this is law. This is merely a best guess of what the final bill might look like based on a compilation of the two versions.

1. You will be required to buy health insurance. Citizens will be required to file a proof of insurance beginning with their 2014 tax returns – or pay a $95 penalty to the IRS. That fine will jump to $350 in 2015 and $750 in 2016.
2. You won't be denied coverage based on a pre-existing condition. Prior to this regulation going into effect in 2014, the government will spend $5 billion to subsidize a high-risk pool for people with pre-existing conditions who have been uninsured for more than six months.
3. Exchanges will provide affordable plans. Individuals and small businesses will be able to buy insurance through government-regulated health insurance exchanges. Insurers will be required to provide coverage that in 2010 would cost no more than $5,950 for an individual, $11,900 for a family.
4. Costs will be capped. Out-of-pocket expenses will be capped in accordance with income. A family of three with an income of $73,240 in 2009 would be required to pay no more than $7,733.
5. "Cadillac" plans may be eliminated. The amount of premium exceeding $8,500 for an individual or $23,000 for a family may be subject to a 40% tax paid by the insurer in order to discourage such plans.
6. Medicaid will serve more people. Anyone under 65 who makes less than $14,440 per year will be eligible for Medicaid. Currently the program is limited to certain categories of people with low income, such as pregnant women and people with disabilities.
7. Riskier customers cannot be charged astronomical premiums. Older citizens will pay a maximum of 3 times the premiums of their younger counterparts. Smokers will pay 1.5 times the rate of non-smokers and gender can no longer be considered a risk factor.
8. The government may help pay your premiums. Individuals earning up to $43,320 ($88,200 for a family of four) may receive credits throughout the year to subsidize premiums.
9. Your kids can stay on your insurance longer. Most insurers currently drop children from the policy when they graduate from high school or college. The age for inclusion would be raised to 26.
10. Medicare drug benefits will improve. Drug manufacturers will be required to discount brand-name drugs by 50% for those spending between $2,700 and $6,154 annually on prescriptions.

Here at Connell Insurance we are continually monitoring and assessing the developments in this health care reform arena and will keep you posted as developments occur. Along with our carriers, we will be prepared to accommodate your needs in the future in accordance with new and existing legislation – always committed to bringing you the best value per premium dollar.

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