WASHINGTON — Some immediate benefits from the health care legislation advancing on Capitol Hill will ease the minds of parents who may have hit up against limitations of their existing health insurance.
Within six months, the Senate bill approved last week would allow dependent, unmarried children to remain on their parents’ policies until their 26th birthday; the House bill would allow an additional year of dependent coverage, until the 27th birthday. Right now it varies from state to state.
The Senate bill would also bar insurers from denying coverage to children under 19 years of age based on pre-existing medical conditions. And the House bill would require insurers to cover reconstructive surgery for children born with deformities.
In many cases, the requirements, including the extended coverage for adult children, would apply only to new insurance plans, though insurers could apply the changes to existing policies.
Many major provisions in the health care legislation would not take effect for several years. New federal subsidies to help moderate-income Americans afford coverage would not begin until 2013 under the House bill, and 2014 under the Senate bill. A new requirement that nearly all Americans obtain insurance would take effect at the same time that the subsidies become available.
On the flip side, many of the new taxes and fees that will help pay for the legislation would take effect much sooner. For this reason, some Republicans have criticized the bill as akin to legislation on a layaway plan: pay now for benefits later.
The concept, however, is not unprecedented. In 1965, when Medicare was created, the payroll tax began six months before the insurance coverage began for Americans age 65 and over.
Still, the lengthy gap between the expected completion of the legislation in early 2010 and the effective date of many major provisions has left Democrats working to answer the criticism with lists of “immediate deliverables.”
Here are some of the benefits that Democrats say would be available soon after the legislation is adopted:
No annual or lifetime limits Both the Senate and House versions of the legislation ultimately seek to prevent insurers from imposing annual or lifetime limits on coverage in new health policies. In the final package of amendments to the Senate bill, the majority leader, Harry Reid of Nevada, added new language giving the secretary of health and human services the authority to regulate annual limits from six months after the bill is enacted until the broader insurance provisions take effect in 2014. Such limits are a serious concern to people with chronic illnesses like cancer that can require expensive treatments within a relatively short period of time, and the change proposed by Mr. Reid was prompted by inquiries from the American Cancer Society.
Limits on insurance company profits Beginning in 2011, the Senate bill would set tight restrictions to force insurance companies to spend the bulk of their revenues on providing medical care to beneficiaries. The legislation would require insurance companies in the large group market to spend at least 85 percent of their revenues on care and insurers in the individual market to spend at least 80 percent of revenues on care. Critics of the private health insurance, including Senator John D. Rockefeller IV, Democrat of West Virginia, and Senator Sherrod Brown, Democrat of Ohio, said setting such requirements on what insurers call “medical loss ratios” was needed to tamp down on profiteering.
Short-term expansion of state high risk pools To help people who cannot obtain insurance because of pre-existing conditions, both the Senate and House bills would provide $5 billion to increase the availability of coverage through state high-risk insurance pools. This provision would take effect 90 days after enactment of the legislation, but many details remain to be worked out.
New financing for community health centers The House bill provides $12 billion in additional financing for community health centers, which serve needy populations, particularly in rural areas. Senator Bernard Sanders, independent of Vermont, won the inclusion of $10 billion in financing for community health centers in the Senate bill. The final dollar amount will be decided in negotiations between House and Senate leaders, but the money would be available for five years beginning in the current fiscal year.
Closing the Medicare drug “doughnut hole” The legislation would increase the amount of drug costs covered by Medicare by $500 in 2010. And beginning on July 1, 2010, the bill would provide 50 percent discounts on brand-name drugs and biologics that low- and middle-income beneficiaries have to pay for themselves once the coverage gap known as the doughnut hole begins.
Prohibition on rescinding existing coverage Both the House and Senate bills would bar insurance companies from rescinding existing coverage other than “in cases of fraud or intentional misrepresentation of material fact.”
Small business tax credits The Senate bill would offer tax credits to small businesses beginning in 2010 for up to 35 percent of premium costs. The full credit would be available to firms with 10 or fewer employees and average annual wages of $25,000. Reduced credits would be available to firms with up to 25 employees and with average annual wages of up to $50,000.
Patient protections For new health plans, beginning six months after enactment of the legislation, the Senate bill would prohibit insurers from requiring prior authorization before a woman sees an obstetrician or gynecologist. The bill would also require coverage for emergency care.
Discrimination protections for lower-income workers The Senate bill would bar group health plans from setting any eligibility rules for coverage that favor higher-wage employees. This provision would take effect six months after enactment of the legislation.
Cobra extension through 2013 Anyone currently paying for an extension of health benefits as permitted under federal law — for instance, after a loss of employment — would be permitted under the House legislation to continue Cobra coverage until the major insurance coverage provisions of the legislation take effect in 2013.
Reinsurance program for early retirees Both the House and Senate bills would provide federal financing for a new reinsurance program to encourage employers to maintain health benefits for employees and early retirees age 55 to 64.
Consumer assistance provisions Both the House and Senate bills would begin to impose new requirements aimed at making it easier for consumers to interact with insurers, including a requirement that health plans adopt uniform descriptions of plan benefits and appeals procedures and that they begin using identical forms.