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Health
Care Reform
What
to Expect in 2010
Don
Nestor CFP, CPA
Many
of the new health-care provisions won't take effect for years,
but several are quickly coming into effect.
High-risk pools for Americans without health insurance
- Individuals who have been denied private health insurance
because of a preexisting condition will be able to get temporary
coverage through federal high-risk pools. These high-risk
pools will be up and running by June 21, 2010, and will eventually
phase out by 2014, when private insurers will be required
to accept adults with preexisting conditions. Children with
preexisting conditions must be accepted by private insurers
starting in 2010.
Dependent coverage to age 26 - Starting on September 23, 2010,
private insurers that offer dependent coverage to children
must allow young adults up to age 26 to remain on their parents'
plans. The actual required effective date for insurers is
the beginning of the next plan year that starts after September
23.
Closing the doughnut hole - Medicare
will undergo a number of changes under the new law. Most of
them won't take effect until 2013 or 2014. However, in 2010,
Medicare beneficiaries whose drug expenses are more than $2,830
but less than $6,440 (the dreaded "doughnut hole")
will receive a check for $250 to help pay for their drugs.
The $250 check won't do a lot, but it represents the start
of a 10-year plan to close the coverage gap that began in
2003. After this year's $250 rebate, Medicare beneficiaries
who hit the doughnut hole in 2011 can expect to receive a
50% discount on brand-name drugs, thanks to the forced generosity
of the drug companies. Starting in 2013, government subsidies
will begin. By 2020 the doughnut hole will effectively be
closed.
Tax credit for small businesses - Starting with
their 2010 tax returns, many small businesses will be able
to claim a tax credit to offset insurance premiums. To get
the credit, a business must have fewer than 25 full-time workers,
pay an average annual wage of less than $50,000, and cover
at least half the cost of health insurance premiums for their
workers. The credit is on a sliding scale. In 2014, the top
tax credit jumps up to 50%.
Overhaul of federal student loan program
- A last-minute amendment to the health-care legislation,
called the Health Care and Education Reconciliation Act of
2010, overhauls the student loan industry.
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