How will health reform affect me?

By guest blogger Robert Field:

Polls show that Americans remain divided over whether health reform will leave them better or worse off.  President Obama said that if you like your current coverage, you can keep it, but many are skeptical. Looking at reform from a personal perspective, what should each of us expect?

Despite all of the drama over reform, most of us will actually feel very little direct effect. Over half of all Americans receive coverage from an employer, and that will stay the same, at least in the short-run. The major change is that the coverage will be better. There will be no annual or lifetime limits on benefits, more coverage of preventive care, and the option to keep dependent children on your policy up to age 26. While these changes could create pressure for higher premiums, some believe they could eventually have the opposite effect. More healthy young people in employer risk pools would better spread the cost of care for those who become sick.

In other words, if you like your employer’s coverage, you probably won’t be able to keep it in the exact same form. However, the changes you see will be mostly for the better.

If you are covered under Medicare, there will be changes, but they will be relatively small. Most beneficiaries will see better coverage for drugs and for preventive care. Those who chose to receive benefits from private plans under Medicare Advantage may see higher premiums, because government subsidies for this alternative will shrink. However, Medicare Advantage was never intended to maintain the same high level of subsidies indefinitely.

If your income is very low and you live in a state with a stingy Medicaid program, there will be big changes. (This does not include residents of Pennsylvania and New Jersey, where Medicaid is relatively generous.) Starting in 2014, Medicaid in all states will cover everyone who earns up to 133 percent of the federal poverty level. It will also cover adults with no children at home, a group that is presently excluded in most states. These new Medicaid recipients will be among the biggest winners of all from health reform.

The most dramatic change will be for the approximately 60 million people without access to employer-based or public coverage. They must turn to the individual insurance market. The bad news for them is that they will now have to obtain a policy whether or not they want to or face a penalty. However, there are exceptions for financial hardship and religious objections.

The good news for them is that if they earn less than four times the federal poverty level, they will receive a subsidy to help pay for insurance. Most important of all, for the first time, they are guaranteed that coverage will be available through an exchange regardless of their age or health status. After all is said and done, this is the core change that health reform was intended to accomplish.

Of course, the effects of health reform over the longer-term are much more difficult to predict. Looking back on a previous reform, Medicare has changed health care in ways that no one could have imagined when it was enacted in 1965. However, health care is in for a period of rapid transition with or without a new federal law. The insurance plan you may like today probably did not exist ten years ago. It will almost certainly not exist ten years from now, regardless of how health reform unfolds.

Yesterday, the U.S. Census Bureau released new data estimating that 50.7 million people in America were uninsured in 2009, check that item out here.

Find earlier items by Robert Field here, including this examinaiton of the legal challenges to the Affordable Care Act (Obamacare).

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