The new health care reform law includes provisions that will help older Americans who are not yet eligible for Medicare have access to affordable health insurance coverage. In addition, it includes provisions to help employers with the costs of providing coverage to early-retirees and older workers.
Limiting Aging Rating of Health Insurance Premiums
The health care reform law establishes a 3:1 ratio for setting health insurance premiums based on age. Currently, older Americans buying health insurance in the individual or small group markets are likely to be charged much more than three times the cost for a younger person.
Reforming Private Insurance for All
The health care reform law includes many reforms to private health insurance that are benefiting Americans of all ages, including older Americans. These reforms include prohibiting coverage denials for preexisting conditions, banning caps on lifetime coverage, ending annual limits on coverage, and prohibiting insurers from dropping coverage when someone is sick. In addition, the law requires that parents be allowed to keep their unmarried adult children on their family health insurance plan until age 26.
Providing Immediate Assistance through a High-Risk Pool
The law establishes a temporary national high-risk pool to provide health coverage to individuals with pre-existing medical conditions who have been uninsured for at least six months. Premiums are subsidized and cost-sharing is limited.
Providing Affordable Private Insurance Choices through Exchanges
A major provision of the health care reform law is to create state-based American Health Benefit Exchanges through which individuals can purchase coverage beginning in 2014. Subsidies will be available to help individuals and families with income between 133- 400 percent of the federal poverty level afford insurance. U.S. citizens and legal residents will be required to have qualifying health care coverage individually or through an employer.
Creating a Program to Help Employers Cover Retirees Age 55-64
The health care reform law creates a temporary $5 billion reinsurance program for employers providing health insurance coverage to retirees over age 55 who are not eligible for Medicare. The program, which is designed to encourage former employers to maintain retiree health care coverage, reimburses employers or insurers for 80 percent of retiree claims between $15,000 and $90,000. Payments from the reinsurance program are used to lower the costs for enrollees in the employer plan.
Increasing the Thresholds for the Excise Tax Based on Age
The health care reform law imposes an excise tax on high-cost insurance plans beginning in 2018. However, the threshold amounts for imposing the tax will be increased for retired individuals age 55 and older who are not eligible for Medicare, and they will also be increased for employers who may have higher health care costs because of the age or gender of their workers. This will make it less expensive for employers with an older workforce to continue providing health insurance.
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