President Obama recently signed into law a new healthcare reform bill which will make expand health insurance coverage for 32 million who do not currently have insurance coverage. This law will be phased into effect over the next decade but it offers a lot to help family caregivers both in the short term and the long term.

The benefits of the law fall into 2 categories – provisions which help the care recipient through public programs and those that help the caregiver through expanded health insurance coverage and better consumer protections. The biggest advantage to care recipients comes through expanded Medicare prescription drug coverage and additional health insurance options for pre-Medicare retirees.

Family caregivers will see their biggest benefits come from the fact that they will be able to get health insurance whether or not they are employed. The new insurance coverage options will be a big benefit to caregivers because many remain tied to jobs in order to receive health insurance. By providing new coverage options and subsidies to help pay for them, family caregivers now have additional options on whether or not they want to continue working or care for their loved one full time. Below we walk through the key provisions which are likely to impact family caregivers.

Goes Into Effect Over the Next Year

The expansion of coverage provided by the new healthcare reform law will not be available until 2014 but there are many portions of the law which will go into effect during 2010 and 2011.

Improvements to Medicare Prescription Drug Coverage. The bill provides a $250 “bonus” to all people in a Medicare Prescription drug program in 2010 that hit the “doughnut hole” which currently begins at $2,830. It also begins closing the Medicare Prescription Drug “doughnut hole” in 2011 and would completely eliminate it by 2020.

Helping Sandwich Generation Caregivers. The bill helps sandwich generation caregivers, those caring for sick parents or relatives and their own children, by:

* Eliminating pre-existing conditions for children thereby ensuring sick children can get insurance coverage.
* Permitting children up to age 26 to stay on their parents insurance policies regardless of whether or not they are full-time students. Most insurers currently cover dependents not in school only up to age 19 and those in school up to age 23.
* Prohibiting lifetime benefits caps on health insurance.

Temporary Early Retiree Program. The law requires the creation of a temporary voluntary reinsurance program for employers to help cover early retirees within 90 days of enactment. This should help pre-Medicare retirees find affordable coverage. The program ends in 2014 when the expanded coverage provisions come online.

Medicare Advantage Changes. The law changes the way that Medicare Advantage plans are paid by bringing payments closer into line with the costs of the regular Medicare program. These payment changes may impact the benefits provided under these plans so keep review your plans coverage carefully at renewal time.

2011 and Beyond

The bulk of the new benefits and subsidies for health insurance will begin in 2014. The lead time is necessary to accumulate funds to pay for the cost of the new coverage.

Expanded Coverage Through Health Exchanges. These state-based marketplaces start operation in 2014 and are based on the Massachusetts Health Connector system, in which individuals and small businesses are able to purchase health insurance. The goal is to provide individuals and small businesses with transparency in benefits and pricing so they can compare health insurance and purchase the coverage that best fits their needs.

Individual Mandate. Almost all Americans will be required to get insurance coverage or face fines-a system similar to the one that’s already in place in Massachusetts. The fines start small at $95 in 2014, but rise rapidly to $695 in 2016. Low-income individuals are exempted from the mandate but most of them will be eligible for coverage through Medicaid or other subsidies.

Health Insurance Subsidies. In order to help families afford the mandatory insurance premiums, starting in 2014 subsidies will be available on a sliding scale, up to a level of $88,000 per year for a family of four. The amount of the subsidies will also be on a sliding scale, meaning that people with lower incomes will receive larger benefits.

Long Term Care. The bill includes the CLASS Act, which provides a public, voluntary long term care program that working people can purchase. The program would cover home care, respite care, home modifications, transportation, and assistive technologies.

What’s Next

While health insurance reform has passed and will be signed by the President within days, the Senate still needs to act on a bill to fix some of the problems in the bill enacted into law. That’s expected to take place this week.

It is unlikely that work on health reform is done. The lesson of other social insurance programs is that they always remain works-in-progress. Social Security and Medicare have been modified and expanded a great deal since they were first enacted. You can expect similar developments to occur with healthcare reform as it moves forward.

By John K. Mills