Most laws are imperfect as they are written or as they are applied, but some good can be found in most of them. The new health insurance law is no exception. Despite the doom and gloom predictions by some, it has some very good parts, and some of them go into effect quickly. Here's a rundown on some of them.
The act provides for small business tax credits. Why is that important? Because tax credits reduce the cost of insurance for the business which means that a business is more likely to provide good insurance for its employees. Under the new law, tax credits of up to 35% of premiums will be immediately available to companies that offer insurance to their employees. Better yet, in 4 years, the tax credits will climb to 50% for small businesses.
You've probably heard about the Medicare Donut Hole that keeps some people from getting Medicare benefits for drugs. The new law starts to close that hole. People who hit it this year get a $250 rebate. Beginning next year, there will be a 50% reduction in the price of brand-name drugs in the donut hole, and the hole will be completely eliminated by 2020.
A wonderful benefit of the law beginning only 6 months from now on January 1, 2011, is the elimination of co-payments for preventive services and the complete exemption of preventive services from deductibles under the Medicare program. Health insurance plans are notorious for dropping the coverage of people who are sick, just when they need coverage the most.
The new law prevents that practice. This provision will take effect before the end of the year. Insurance companies have been just as notorious about refusing to insure children with pre-existing conditions like leukemia. Before this year is over, that practice will be banned, and 3 years from now, it will be banned for everyone.
Maybe you have heard of another harmful practice in the health insurance industry. It's the practice of capping the amount of benefits one can have during a lifetime. Under it, the sickest people, that is, those most in need of insurance, find themselves being cut off when the arbitrary cap is reached. If you have been keeping up with the oil spill discussions, you may have come to the conclusion that caps on damages, like the 75 million dollar cap in the Oil Protection Act, are designed to shield industry from their wrongdoing and to shift the burdens to ordinary people.
The health insurance act rectifies this effect, because by the end of this year, it will ban the insurance industry from placing lifetime caps on coverage. A person with cancer or other ravaging disease will no longer have coverage dropped mid-stream in treatment. The act, while imperfect, still has major benefits for most of us.