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What health reforms mean for you

New changes will improve options for children and young adults and protect the coverage of anyone who is sick.

By Karen Datko Sep 24, 2010 8:17PM

Is there anything more confusing to the public than health care reform? That's what a recent Associated Press poll suggests.

Now that several new provisions of health reform have kicked in, let's look at what effect -- if any -- they will have on you or your family. Most important: They provide more insurance options for children and young adults. Also of note: Insurance companies can no longer drop coverage of people who get  sick.

For many families, these changes couldn't happen soon enough. But more extensive reforms to provide affordable coverage to many of the nation's uninsured -- now a staggering 50.7 million people, according to the latest census report -- won't take effect until 2014. (A video by the Kaiser Family Foundation provides an excellent overview.)

 

Here are the latest developments: Post continues after video.

Children and young adults

Insurance companies can no longer deny coverage to children up to age 19 with pre-existing conditions. (That protection won't apply to adults until 2014.) "New individual plans and all group plans -- such as those you get at work -- can't refuse to cover a child," Kaiser Health News reports. (Note: Kaiser Health News is an excellent source.)

 

Sounds great, but there's also some bad news on this front. To avoid this reform, major insurers Aetna, Cigna, WellPoint and others will stop selling new child-only individual policies in some states, despite an earlier industry pledge to cooperate. Companies say they fear that parents will enroll their kids only after they've become sick, making the cost unsustainable. 

 

While the number of children in need of individual policies is relatively small, about 8% of the individual insurance market, some parents have nowhere else to turn. They may not have group health insurance at work and earn too much for their kids to qualify for the Children's Health Insurance Program or Medicaid.

 

One possible solution to deal with insurers' concerns: Have open enrollment for kids only once or twice a year, which would encourage the parents of both sick and healthy kids to sign up. Meanwhile, parents of sick children who can't find a child-only policy should check out their state's new high-risk pool.

 

Young adults can stay on a parent's health care plan until age 26, or return to the parent's plan if they've been dropped -- unless they can get insurance through their own employer. This is a heck of a deal: Aaron Smith, founder of Young Invincibles, "says that under this new health care provision, a person shelling out $150 a month for his own policy will now be able to join a parent's plan for around $35," American Public Media's Marketplace reports. Right now, about a third of people between 18 and 24 are uninsured.

 

Insurers like this part of health reform because young adults are generally healthy and won't cost them much. The Baltimore Sun reports that "many health insurers, including Aetna, Humana, WellPoint, CareFirst BlueCross BlueShield and United Healthcare, extended policies immediately after overall health care law passed in March, so there would be no disruptions for those graduating from college."

 

Changes for everyone

Insurers can't drop coverage to anyone because they've become ill, except in cases of fraud. The practice, known as "recission" has been a nightmare. The Post observes that "stories abound of people losing their coverage just when they needed it most because they had slightly misstated their height and weight, or failed to mention a gall stone removal years earlier that had no relation to their current illness."

Lifetime caps on coverage are eliminated for all plans, and annual caps will be phased out. "First they'll increase to $750,000 for all employer plans and new individual plans, rising to $1.25 million after Sept. 23, 2011, and then to $2 million the following September," Kaiser says.

 

Also:

  • You will no longer need prior approval to use an emergency room outside your health care network and you won't be financially penalized for doing so.
  • Insurers can't charge co-payments or deductibles for preventive tests like mammograms and vaccinations.
  • If a claim is denied, you can demand an external, independent review.

So far, so good? OK, here's the tricky part: Generally speaking, these changes take effect in your policy when it renews or if you get a new one. For more details about that, see Healthcare.gov. To further confuse the issue, some "grandfathered" plans are exempt. A USA Today story explains how that works.

 

What do you think? Will these changes help protect your family's health and finances?

 

More from MSN Money:

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