Experts on the new health reform law highlighted provisions of interest to both elder law attorneys and their clients at a session of the National Academy of Elder Law Attorneys' Advanced Fall Institute. ElderLawAnswers has previously reported on many of the topics that the session panelists reviewed, but following are a few nuggets we have not covered or have given short shrift. (For ElderLawAnswers' earlier coverage of the law's provisions, click here and here and here.)
The session, titled "Health Care Reform Implementation 20 Tips," was led by Brian Lindberg, NAELA's public policy consultant and the Executive Director of the Consumer Coalition for Quality Health Care; Vicki Gottlich, Senior Policy Attorney in the Washington, D.C., office of the Center for Medicare Advocacy; and Mary Alice Jackson, CELA, a partner at Boyer & Jackson, P.A., in Sarasota, Florida.
Small Business Tax Credit
Jackson explained a new small business tax credit for small employers -- this could mean you! -- that is already available under the new law. Firms with fewer than 25 employees, with an average annual wage of $50,000 or less (not including the owner's income), and that already have a group health plan are eligible for a 35 percent tax credit for the premiums they are paying for their employees (assuming they are paying 50 percent of those premiums). This credit rises to 50 percent in 2014. Jackson said the IRS has a helpful page on the credit, as well as an FAQ page.
Adults With Pre-existing Conditions
In 2014, no one will be turned down or charged a higher premium because of a pre-existing condition, including a disability. Until then, the law creates a Pre-Existing Condition Insurance Program to make health coverage available to those who have been denied insurance by private insurers due to a pre-existing condition. Some states have their own plans and others are taking part in a federal plan. Applicants must have been uninsured for at least the last six months, and premiums and deductibles will not be low. The link above includes a map to find the options in your state, and for an excellent article on the program from RetirementRevised, click here. Many states are also offering High-Risk Pool (HRP) plans for people with pre-existing conditions who have been refused coverage by a private insurance company. For more about both these options, click here.
Lifetime and Annual Coverage Limits
Insurers often cap the benefits they will pay out over a lifetime or each year, or both. As part of the new law, lifetime limits are no longer allowed on individual or employer polices that are being issued or renewed. Jackson noted that this is especially important for clients with special needs.
Annual benefit limits will disappear by January 1, 2014, except for individual health plans that were in effect at the time of the bill's enactment, March 23, 2010. And some plans may be eligible for a waiver from the annual limit rules if complying would mean a significant decrease in benefits or a significant increase in premiums. (For a recent New York Times article on how the removal of lifetime limits has benefited patients, who now fear the law's repeal, click here.)
Medicare
Gottlich noted that changes to Medicare contained in the new law will extend the life of the Medicare trust fund another 12 years, to 2029. As ElderLawAnswers has previously reported, one of the signal benefits of the law for Medicare recipients is the gradual elimination of the notorious "doughnut hole" in the Part D prescription drug benefit, where many beneficiaries lose coverage until they reach a specified out-of-pocket dollar amount. (In recognition of the victory, the panelists handed out doughnut holes to audience members.)
Gottlich reminded her audience that about 5 percent of beneficiaries now pay extra for Part B because their incomes are more than $85,000 a year (this was actually part of an earlier Medicare law), and that the income figures will not be indexed for inflation but will remain the same until 2020. (Click here for all the premiums for higher-income beneficiaries in 2011.) Part D premiums will also be pegged to income, with higher earners paying premiums starting at $12 more on top of the regular premium. But Gottlich pointed to what is known as the "Bernie Madoff exception" under the new law, which protects high-income beneficiaries who can show that their income was reduced by fraud.
The new law also includes higher Medicare taxes that will affect about 2 percent of the population. Starting in 2013, individuals will pay an additional 0.9 percent in Medicare tax on wages above $200,000 ($250,000 for couples). The new law will also impose a 3.8 percent Medicare tax on unearned income that exceeds this level.
Gottlich also noted that if private Medicare providers (either Part D or Medicare Advantage) offer more than one plan, the plans' benefit packages must be meaningfully different from one another. This will somewhat reduce the plethora of Part D plans many beneficiaries must choose from.
The Dubious Appeal of Repeal
Lindberg said that in their efforts to repeal portions of the law, the Republicans will undoubtedly determine that a number of provisions are off the table because they are too popular with consumers. There is also the reality that according to the non-partisan Congressional Budget Office, the law will save about $1 trillion over 10 years. Under Congress's "pay as you go" rules, it will have to come up with other savings if portions of the law are scuttled. For example, Lindberg noted that the CLASS Act, while appearing to be a tempting target, is one of the provisions that actually brings in revenue, so repealing it would be a challenge. He added he was certain that "there are people in the Senate who would filibuster any bill to try to repeal [it]." Lindberg said NAELA will be doing an analysis of the parts of the law important to older persons that are most vulnerable to attack.
The panelists highly recommended the administration's Web site, HealthCare.gov for more information on the law. Those who want e-mail updates on the law's implementation can sign up for them here.
NAELA's Online Education Library features content and speaker materials from the 2010 Advanced Fall Institute. Institute attendees are eligible for a 72 percent-off coupon code; contact Casey Anderson at canderson@naela.org.
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