Answers to Common Questions about the Implications of the
2010 Healthcare Reform Legislation

How will this new legislation positively affect my child who has a disability?
Health insurers will not be allowed to deny coverage to children with pre-existing conditions. This applies to new and existing employer plans and new individual plans. The elimination of disqualification based on pre-existing conditions does not apply to adults until 2014. Group health plans will be required to extend coverage to adult children (married or unmarried) through age 26 if the adult child is not eligible for coverage under another employer’s health plan. Beginning in 2014 the requirement that the adult child must not be eligible for coverage under another group employer plan will no longer apply. The coverage extension applies regardless of whether or not the child is a tax dependent claimed under the parent’s coverage and there is no requirement for full-time student status.

How will this new legislation affect my Medicare Part D prescription benefits?
Medicare beneficiaries who reach the Part D coverage gap in 2010 will receive a $250 rebate. In 2011 seniors in the donut hole will receive a 50% discount on prescription drugs, and the Part D coverage gap is gradually eliminated by 2020, with beneficiaries covering only 25 percent of the cost of drugs up until they have spent so much on prescriptions that Medicare's catastrophic coverage kicks in, at which point copayments drop to 5 percent. Beginning in 2011, Medicare Part D premiums will be set higher than the standard level for those individuals who have incomes over $85,000 per person or $170,000 for couples.

Is there any new long term care coverage under this legislation?
In 2011 the federal government will establish a national voluntary insurance program for purchasing community living assistance services and supports (CLASS). The CLASS Act will provide a lifetime cash benefit that offers people with disabilities some protection against the costs of paying for long term services and supports, and helps them remain in their homes and communities. CLASS is a voluntary, self-funded, insurance program with enrollment for people who are currently employed. Premiums will be paid through payroll deductions if an individual’s employer decides to participate in the program. Participation by workers is entirely voluntary. Self-employed people or those whose employers do not offer the benefit will also be able to join the CLASS program through a government payment mechanism. Individuals qualify to receive benefits when they need help with certain activities of daily living, have paid premiums for five years, and have worked at least three of those five years. Once qualified, beneficiaries will receive a lifetime cash benefit based on the degree of impairment, which is expected to average roughly $75 per day. These benefits are intended to help maintain independence at home or in the community, and can be used to offset the costs of assistive living and nursing home care. If you already have or are considering purchasing private long term care insurance you’ll likely find the coverage under a private policy to be more comprehensive than this new government plan.

How will it affect my taxes?
There are a number of provisions that will affect the taxes of middle class Americans. If you have unreimbursed medical expenses that you have deducted in the past, look for this threshold to change from 7.5% of adjusted gross income to 10% of adjusted gross income (though the increase is waived on individuals 65 years and older for tax years 2013 through 2016). The law also applies the Medicare payroll tax to net investment income for couples earning more than $250,000 a year or individuals earning more than $200,000 a year.

Will it affect my investments?
Maybe, if your money is invested in health care companies. Beginning in 2011 there are new annual fees imposed on the pharmaceutical manufacturing sector, and pharmaceutical manufacturers will be required to provide a 50% discount on brand-name prescriptions filled in the Medicare Part D coverage gap. It remains to be seen how private enterprise will adapt to these increases in the cost of doing business. But if you’re invested in real estate the outlook may be better, as the Atlanta Business Chronicle is reporting renewed interest in development of new medical office buildings, in anticipation of increased demand for care at outpatient centers.