The ink is drying on the Affordable Care Act and many are wondering how it will impact their wallets. Many of the measures in the bill, including the requirement to buy health insurance, subsidies and the expansion of Medicaid (to help those who can't afford health insurance) and the setting up of state health insurance exchanges, aren't expected to be in place until 2014.
The Congressional Budget Office says that the bill will reduce the federal deficit over the next 10 years due to the following inclusions: cut some Medicare benefits; raise Medicare (not income) taxes on singles making more than $200,000 and couples making more than $250,000; making changes to how non-reimbursed medical expenses are deducted on tax forms.
That's all well and good, but are there any immediate impacts to your wallet from health care reform? The answer is yes. Within six months, there are several new requirements. Here are five immediate things that will impact some wallets:
1. No more rescissions: This is a biggie. The health care reform bill says that insurance companies can't drop your coverage if you get sick. Many people have found their health insurance coverage revoked or denied after years of faithfully paying premiums. Now, as long as you are current on your premiums, insurance companies can only rescind your coverage if you are engaged in fraud.
2. Children can't be denied for pre-existing conditions: Until now, many parents have been unable to pay, or bankrupted themselves, for treatments for children afflicted with a variety of terminal and chronic illnesses. Now, those under the age of 19 cannot be denied coverage for a pre-existing condition. (Starting in 2014, adults can't be denied, either.)
3. Tax credits for small businesses: Small businesses offering health insurance coverage to their employees will receive tax credits for 2009 and 2010.
4. Adult children can remain on policies until 27: If your adult child does not get coverage at work, he or she can remain on your insurance policy until his or her 27th birthday. For many families, this is likely to ease the costs associated with not having coverage, since many insurance companies only allowed adult children to remain on insurance as full-time students - and then only until the age of 23.
5. Closing the Medicare prescription "donut hole": Medicare enrollees will receive $250 to help them pay for prescription drugs if they have hit the "donut hole" created in the legislation passed a few years ago affecting Medicare prescription drug plans. Eventually, the donut hole will disappear completely.
Consider your spending habits, and look at your situation. You will need to begin preparing for 2014, especially if you are one of those who will have to buy insurance going forward, but you can also look for ways to take advantage of the more immediate effects of the health care reform bill.
-- Miranda
Image source: Tom Varco via Wikimedia Commons