State officials say thousands of people with medical problems are in danger of losing coverage as the Obama administration winds down one of the earliest programs in the federal health care overhaul.

At risk is the Pre-Existing Condition Insurance Plan, a transition program that has turned into a lifeline for the so-called "uninsurables" — people with serious medical conditions who can't get coverage elsewhere.

The health care law capped spending on the program, and now money is running out.

In a letter this week to Health and Human Services Secretary Kathleen Sebelius, state officials said they were "blindsided" and "disappointed" by a federal proposal they say would shift the risk for cost overruns to states in the waning days of the program.

There was no immediate response from HHS.

We're in denial: Americans underestimate their chances of needing long-term care as they get older — and are taking few steps to get ready.

A new poll examined how people 40 and over are preparing for this difficult and often pricey reality of aging, and found two-thirds say they've done little to no planning.

In fact, 3 in 10 would rather not think about getting older at all. Only a quarter predict it's very likely that they'll need help getting around or caring for themselves during their senior years, according to the poll by the AP-NORC Center for Public Affairs Research.

That's a surprise considering the poll found more than half of the 40-plus crowd already have been caregivers for an impaired relative or friend — seeing from the other side the kind of assistance they, too, may need later on.

"I didn't think I was old. I still don't think I'm old," explained retired schoolteacher Malinda Bowman, 60, of Laura, Ohio.

Bowman has been a caregiver twice, first for her grandmother. Then after her father died in 2006, Bowman moved in with her mother, caring for her until her death in January. Yet Bowman has made few plans for herself.

"I guess I was focused on caring for my grandmother and mom and dad, so I didn't really think about myself," she said. "Everything we had was devoted to taking care of them."

The poll found most people expect family to step up if they need long-term care — even though 6 in 10 haven't talked with loved ones about the possibility and how they'd like it to work.

Bowman said she's healthy now but expects to need help someday from her two grown sons. Last month, prompted by a brother's fall and blood clot, she began the conversation by telling her youngest son about her living will and life insurance policy.

"I need to plan eventually," she acknowledged.

Those family conversations are crucial: Even if they want to help, do your relatives have the time, money and knowhow? What starts as driving Dad to the doctor or picking up his groceries gradually can turn into feeding and bathing him, maybe even doing tasks once left to nurses such as giving injections or cleaning open wounds. If loved ones can't do all that, can they afford to hire help? What if you no longer can live alone?

"The expectation that your family is going to be there when you need them often doesn't mean they understand the full extent of what the job of caregiving will be," Susan Reinhard, a nurse who directs AARP's Public Policy Institute, said. "Your survey is pointing out a problem for not just people approaching the need for long-term care, but for family members who will be expected to take on the huge responsibility of providing care."

Those who have been through the experience of receiving care are less apt to say they can rely on their families in times of need, the poll found.

With a rapidly aging population, more families will be facing those responsibilities. Government figures show nearly 7 in 10 Americans will need long-term care at some point after they reach age 65, whether it's from a relative, a home health aide, assisted living or a nursing home. On average, they'll need that care for three years.

Despite the "it won't happen to me" reaction, the AP-NORC Center poll found half of those surveyed think just about everyone will need some assistance at some point. There are widespread misperceptions about how much care costs and who will pay for it. Nearly 60 percent of those surveyed underestimated the cost of a nursing home, which averages more than $6,700 a month.

Medicare doesn't pay for the most common types of long-term care. Yet 37 percent of those surveyed mistakenly think it will pay for a nursing home and even more expect it to cover a home health aide when that's only approved under certain conditions.

The harsh reality: Medicaid, the federal-state program for the poor, is the main payer of long-term care in the U.S., and to qualify seniors must have spent most of their savings and assets. But fewer than half of those polled think they'll ever need Medicaid — even though only a third are setting aside money for later care, and just 27 percent are confident they'll have the financial resources they'll need.

In Cottage Grove, Ore., Police Chief Mike Grover, 64, says his retirement plan means he could afford a nursing home. And like 47 percent of those polled, he's created an advance directive, a legal document outlining what medical care he'd want if he couldn't communicate.

Otherwise, Grover said he hasn't thought much about his future care needs. He knows caregiving is difficult, as he and his brother are caring for their 85-year-old mother.

Still, "until I cross that bridge, I don't know what I would do. I hope that my kids and wife will pick the right thing," he said. "It depends on my physical condition, because I do not want to be a burden to my children."

The AP-NORC Center poll found widespread support for tax breaks to encourage saving for long-term care, and about half favor the government establishing a voluntary long-term care insurance program. An Obama administration attempt to create such a program ended in 2011 because it was too costly.

The older they get, the more preparations people take. Just 8 percent of 40- to 54-year-olds have done much planning for long-term care, compared with 30 percent of those 65 or older, the poll found.

Mary Pastrano, 74, of Port Orchard, Wash., has planned extensively for her future health care. She has lupus, heart problems and other conditions, and now uses a wheelchair. She also remembers her family's financial struggles after her own father died when she was a child.

"I don't want people to stand around and wring their hands and wonder, 'What would Mom think was the best?'" said Pastrano, who has discussed her insurance policies, living will and care preferences with her husband and children.

Still, Pastrano wishes she and her husband had started saving earlier, during their working years.

"You never know how soon you're going to be down," she said. "That's what older people have a problem understanding: You can be in your 60s and then next flat on your back. You think you're invincible, until you can't walk."

The AP-NORC Center for Public Affairs Research survey was conducted Feb. 21 through March 27, with funding from the SCAN Foundation. The SCAN Foundation is an independent, nonprofit organization that supports research and other initiatives on aging and health care. The nationally representative poll involved landline and cellphone interviews with 1,019 Americans age 40 or older. It has a margin of sampling error of plus or minus 4.1 percentage point

Related:

• Few seniors prepared for long-term illness
• Boomers not aging gracefully
• Managing aging parents from afar

By Michelle Andrews
Kaiser Health News

Starting next year, the Affordable Care Act will largely prohibit insurers who sell individual and small-group health policies from charging women higher premiums than men for the same coverage.

Long-term-care insurance, however, isn't bound by that law, and the country's largest provider of such coverage has announced it will begin setting its prices based on sex this spring.

"Gender pricing is good for insurance companies," said Bonnie Burns, a policy specialist at California Health Advocates, a Medicare advocacy and education organization, "but it’s bad public policy and it's bad for women."

Genworth Financial says the new pricing reflects the fact that women receive two of every three claims dollars. The change will affect only women who buy new individual policies, or about 10 percent of all purchasers, according to the company. The new rates won't be applied to existing policyholders or those who apply as a couple with their husbands.

"This change is being made now to reflect our actual claims experience and help stabilize pricing," Genworth Financial spokeman Thomas Topinka said in an e-mail.

Women's premiums may increase by 20 to 40 percent under the new pricing policy, said Jesse Slome, executive director of the American Association for Long-Term Care Insurance. The average annual premium for a 55-year-old who qualified for preferred health discounts and bought between $165,000 and $200,000 of coverage was $1,720 last year, according to the association.

Experts say they expect other long-term-care insurers will soon follow suit.

Long-term-care insurance provides protection for people who need help with basic daily tasks such as bathing and dressing. It typically pays a set amount for a certain number of years -- say, $150 daily for three years -- for care provided in a nursing home, assisted living facility or at home. Never a very popular product with consumers, many of whom found it unaffordable, in recent years the industry has struggled and many carriers have raised premiums by double digits or left the market.

Consumer health advocates say they aren't surprised that women's claims for long-term-care insurance are higher than men's.

Because women typically live longer than men, they frequently act as caregivers when their husbands need long-term care, advocates say, thus reducing the need for nursing help that insurance might otherwise pay for. Once a woman needs care, however, there may be no one left to provide it.

"Women live longer alone than men," Burns said. "If you don't have a live-in caregiver when you start needing this kind of care, you’re in big trouble."

LuMarie Polivka-West knows the potential problems all too well. Polivka-West, 64, is the senior director of policy and program development for the Florida Health Care Association, a trade organization for nursing homes and assisted living facilities. (I first spoke with Polivka-West two years ago, when she discussed the financial challenges she and her two brothers faced caring for their aging parents.)

About 15 years ago, she bought a long-term-care policy. The company went out of business after five years, and she let her policy lapse rather than switch to another plan with higher premiums and less comprehensive coverage. But she's reconsidering that decision. Polivka-West's husband is four years older than she is. Her mother died of Alzheimer's disease at age 89 after struggling with it for eight years. What if a similar fate awaits her?

Polivka-West thinks insurers shouldn't be allowed to charge her more just because she's a woman.

"The Affordable Care Act recognized the gender bias in health insurance," she said. "The same [rules] should apply to long-term-care insurance."

The federal health overhaul sought to eliminate the coverage and price discrepancies in the larger health insurance market. A 2012 study by the National Women's Law Center found that 92 percent of top-selling health plans in the individual market practiced sex-based pricing in states where the practice was allowed. (Fourteen states banned or limited the practice, according to the report.) Nearly a third of plans charged women at least 30 percent more than men for the same coverage, even plans that did not include maternity benefits, the study found.

Insurers that sell individual and small-group health policies on the state-based health insurance exchanges or outside them on the private market in 2014 will be able to vary premiums based only on geography, family size, age and tobacco use. (Plans that have grandfathered status under the law are exempt from these requirements.)

Under federal laws against sex discrimination in the workplace, employers are generally prohibited from charging women more than men for the same health insurance coverage.

Meanwhile, Genworth Financial says it won't switch to gender-based pricing for long-term care in two states—Colorado and Montana--that prohibit varying premiums based on gender in all health insurance products.

As states move to bring their laws into conformance with the gender rating requirements under the Affordable Care Act, some advocates see an opportunity.

"Any state with a strong advocacy group could be advocating for a very broad-based prohibition against gender rating" in all insurance products, says Donna Wagner, the associate dean for academic affairs at the College of Health and Social Services at New Mexico State University who also chairs the policy committee for the Older Women’s League, an advocacy group.

Updated at 7:40 p.m. ET: UnitedHealth Group's plan to continue offering some elements of the Affordable Care Act regardless of the fate of the legislation is a political as well as a business decision.

While people — especially young adults and people suffering from expensive or chronic illnesses — will benefit from the insurance giant's initiative, the company reaps a public relations coup that will increase its costs by as little as one or two percent, one analyst said. 

"It makes UHG attractive among employees and, hence, employers," Uwe Reinhardt, professor of economics and public affairs at Princeton University, said via e-mail. 

In a statement Monday, UnitedHealth Group said its UnitedHealthcare company will preserve a few popular aspects of the new healthcare law that have already been put into place even if the Supreme Court strikes down all or part of the ACA. It will continue to let young adults stay on their parents' policies until they turn 26, not charge co-pays for some preventative health services and waive lifetime coverage dollar caps, along with provisions related to appeals and policy termination. 

"I think the company sees the opportunity to score some political points by standing behind these very popular aspects of the law," said Matthew Coffina, an analyst at Morningstar. Coffina pointed out that since the company is already offering these services as required by law, the costs of providing them has already been incorporated into premium prices. 

Later Monday, Humana said it would continue those same provisions, according to Kaiser Health News. Aetna, too, said it would retain the young adult provision, the preventive care benefits and a third-party appeals program. The  Aetna announcement did not include a reference to lifetime limits on coverage. 

"The protections we are voluntarily extending are good for people’s health, promote broader access to quality care and contribute to helping control rising health care costs," UnitedHealth Group president and CEO Stephen J. Hemsley said in a statement. "These provisions make sense for the people we serve."

It might seem strange that insurance companies — an industry known for aggressive cost-cutting tactics — only are now getting around to realizing the potential savings in services like free diabetes and blood pressure screenings. 

"Sheer inertia can explain it," Reinhardt said. "It would be a mistake to assume that private health insurers are particularly visionary or innovative in this regard." 

Insurance companies haven't traditionally been motivated to provide this kind of service because it hasn't been demanded by companies. A majority of Americans are still insured through their workplaces, although that number is falling. But since people rarely stay with one employer for their entire careers, there's little economic incentive for a company to make long-term investments in workers' health.

Coffina said the intense political debates about healthcare issues have prompted Americans and insurance companies alike to think more about long-term trends and ramifications. "Reform legislation frames what's expected of these companies and what a minimum level of service is," he said.

The provision allowing young adults to stay on their parents' insurance is particularly popular, and has been widely used. An April poll conducted by the Kaiser Family Foundation found that 71 percent of Americans support the provision, and nonprofit group the Commonwealth Fund calculated that 6.6 million people between the ages of 19 and 25 were able to obtain health insurance as a result.

Some Republican lawmakers — who are unified in their opposition to the health reform law — have conceded that this is a good idea, and it's politically popular enough that rejecting it could be political suicide. Bloomberg reported last week that Rep.Phil Gingrey, R-Ga., co-chair of the GOP Doctors Caucus, called the young-adult provision “a good policy," although the Caucus advocates a "complete repeal" of the Affordable Care Act on its website. 

If health insurers expect that lawmakers will require them to provide certain services even if the Supreme Court strikes down the law, preempting that by volunteering compliance is a shrewd maneuver. "It seems like they're trying to get ahead of their competitors," said Igor Volsky, deputy editor of left-leaning blog ThinkProgress.org. "I wouldn't be surprised to see others echo it."

Some other insurers have already weighed in. The CEOs of Aetna and Humana both acknowledged in recent interviews that popular provisions such as young adult coverage might be already too ingrained in the system to roll back, according to the Wall Street Journal. 

Even if legislation doesn't force their hand, taking away benefits is an unpalatable choice for insurance companies because it makes them look like the bad guys. "It's going to be very hard, regardless of what happens with the [Supreme Court] decision, for insurance companies to take away benefits," Volsky said. "I think once you grant people certain benefits, it's very difficult to move backwards." 

By Judith Graham
Kaiser Health News

Doctors assess patients' breathing, heart rate and blood pressure routinely at office visits. Soon, they may be adding body mass index to that list too.

Tracking this measure – an indicator of whether someone is obese or overweight – as if it were a vital sign at medical checkups is among a new set of strategies recommended for battling obesity, a concern that some experts predict will affect 42 percent of adults by 2030.

Although professional medical societies have said for years that physicians should monitor patients' body mass index, most doctors fail to do so. For example, a 2006 survey of family physicians found that fewer than half checked BMIs for children over the age of 2, even though 71 percent knew this has been recommended.

Just over 40 percent of adult patients in commercial HMOs had documented BMI measurements in 2009 and 2010, according to a survey by the National Committee for Quality Assurance, an organization that evaluates health plans. That figure falls to 12 percent for patients in commercial PPOs, a more common type of plan.

The Institute of Medicine last week called for the medical profession and health insurers to become more rigorous in their approach in a report proposing an anti-obesity campaign that would involve every part of society, from individuals and families to schools, communities, workplaces, the food industry and the media.

Pointing to the more than 90 million children, teens and adults counted as obese, well-established links to medical conditions such as diabetes, hypertension, heart disease, and arthritis, and annual healthcare expenses exceeding $190 billion, the report urged comprehensive and sustained action.

For physicians, monitoring body mass index – a ratio of height to weight – is at the top of the list of priorities because it's the best way to identify people who have a weight problem. (Adults are counted as obese if they have a BMI of 30 or higher; children if their BMI is at the 95 percentile or higher for kids of the same age and sex.)

"We need to normalize the process of obesity screening and lifestyle counseling so they're usual and people expect this," said Dr. Sandra Hassink, a member of the panel that prepared the IOM report and director of the Obesity Initiative at Nemours, a pediatric health system in four states.

Medical groups call for change
Groups such as the American Medical Association and the American Academy of Pediatrics have recommended regular BMI checks for years. Several health care systems also have embraced the practice. Kaiser includes BMI as a "vital sign" in electronic medical records for nearly 9 million members, and it is planning to do the same for physical activity, another contributor to the obesity epidemic, said Ray Baxter, the plan's senior vice president for community benefit and health policy.

(Kaiser Health News is not affiliated with Kaiser Permanente.)

So why the problem? Many harried physicians are unprepared to advise people about how to change their behaviors, unconvinced they have time to do so, and therefore look skeptically at screening, said Dr. Robert Kushner, clinical director of the Comprehensive Center on Obesity at Northwestern University.

If doctors are overweight themselves, they're less likely to recognize the issue in their patients, research shows. What's more, doctors aren't trained in medical school to handle weight issues. They also often aren't convinced obesity treatments work, and many believe there aren't good community programs to which they can refer patients.

"The question is, how many programs are out there for primary care doctors to refer to in the community, and answer is – not many," said Dr. Ned Calonge, a Colorado physician who is the immediate past chairman of the U.S. Preventive Services Task Force.

Northwestern is tackling a part of that by weaving instruction in "lifestyle medicine" throughout all four years of a new medical school curriculum being introduced this August.

Another significant problem has been a historic lack of reimbursement from insurers for obesity screening and counseling. That changed last year for seniors, when Medicare said it would cover up to six months of weight loss counseling for obese beneficiaries as part of a package of new preventive services. Nearly 13 million Medicare members are thought to be obese.

Meanwhile, new preventive services guidelines from the government call for all insurance plans to cover obesity screening and counseling without charge to patients.

And insurers are expanding childhood obesity programs following a 2010 recommendation from the U.S. Preventive Services Task Force that endorsed comprehensive weight management programs for youngsters at least 6 years old. Previously, the task force supported BMI screening but not weight loss programs.

Seeking evidence-based programs
For the insurance industry, the challenge now is providing evidence-based programs that can be introduced on a broad scale.

UnitedHealth Group is promoting "Join for Me," a year-long behavioral modification program piloted with the YMCA of Greater Providence, R.I., in which youngsters 6 to 17 years old, accompanied by a parent, learn about healthy eating and exercise in a group led by a coordinator.

"Doctors are in short supply" and it makes sense to conduct intensive behavioral change programs in the community, not in their offices, said Dr. Deneen Vojta, senior vice president of UnitedHealth's Center for Health Reform & Modernization. For overweight and obese adults, the company is looking at offering a version of the Diabetes Prevention Program, a well-studied intensive intervention that has been shown to help people lose weight.

WellPoint has taken a different approach, choosing to work through doctors and with the Alliance for a Healthier Generation, an organization that's trying to convince health plans to offer more comprehensive coverage for obesity counseling and treatment. The alliance asks participating plans to offer four visits with a child's primary care doctor and four visits with a dietitian if the youngster is found to be overweight or obese. So far several plans, including WellPoint, Aetna, Humana and Highmark, Inc., have signed up, and 2.4 million children are covered.

WellPoint recently launched a limited pilot study of this type of benefit in California and is learning what physicians need and members want before deciding whether to roll it out more broadly, said Harvinder Sareen, clinical program director for the insurance company.

Insurance companies and some self-insured employers are also exploring the use of financial incentives -- cash payments or reduced premiums or deductibles – to motivate members to keep their weight in check and to adopt other lifestyle changes. One program at UnitedHealthcare offers members up to $250 for reaching a BMI of 25 or less, and similar incentives for not smoking and lowering cholesterol and blood pressure.

"Is there coverage [for obesity] is yesterday's conversation. Today's conversation is how to design coverage to encourage people to use it and continue using it," said Karen Ignagni, president of America’s Health Insurance Plans, an industry trade group.

Others disagree that coverage for obesity counseling is adequate.

"The problem is there's no real incentive for the insurance industry to pay for better prevention and treatment, because the costs are immediate while the benefits are long-term," said Dr. David Ludwig, director of the new Balance Foundation Obesity Prevention Center at Children's Hospital, Boston. "Although reducing the prevalence of obesity is one of the most profitable investments the healthcare system could make, it doesn't make a lot of sense for individual plans when families change policies every three to five years."

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• Holding steady on U.S. obesity rate could save $550 million
• A modest proposal: To solve health spending crisis, tax cats

By Mary Agnes Carey
Kaiser Health News

Friday marks the two-year anniversary of the 2010 health care overhaul law, and despite an upcoming challenge in the Supreme Court, it has already begun to be implemented.

While some of the key features don’t kick in until 2014, the still-controversial law has already altered the health care industry and established a number of consumer benefits.

Here’s an FAQ about some of the law’s provisions that are already in place as well as major features of what’s to come, if the law stays in place.

Q: I don’t have health insurance. Will I have to buy it and what happens if I don’t?

A: Right now, you are not required to have health insurance. But beginning in 2014, most people will have to have it or pay a fine. For individuals, the penalty would start at $95 a year, or up to 1 percent of income, whichever is greater, and rise to $695, or 2.5 percent of income, by 2016.

For families the penalty would be $2,085 or 2.5 percent of household income, whichever is greater by 2016 and beyond. The requirement to have coverage, known as the individual mandate, can be waived for several reasons, including financial hardship or religious beliefs.

Millions of additional people will qualify for Medicaid or federal subsidies to buy insurance under the law.

Q: I get my health coverage at work and I’d like to keep my current plan. Will I be able to do that? How will my plan be affected by the health law?

A: If you get insurance through your job, it is likely to stay that way. But, just as before the law was passed, your employer is not obligated to keep the current plan and may change premiums, deductibles, co-pays and network coverage.

You may have seen some law-related changes already. For example, most plans now ban lifetime coverage limits  and include a guarantee that an adult child up to age 26  who can’t get health insurance at a job can stay on her parents’ health plan.

Q: What are some other parts of the law that are now in place?

A: You are likely to be eligible for preventive services with no out-of-pocket costs, such as breast cancer screenings and cholesterol tests.

Health plans can’t cancel your coverage once you get sick -- a practice known as “rescission” -- unless you committed fraud when you applied for coverage.

Children with pre-existing conditions cannot be denied coverage (this will apply to adults in 2014).
Insurers will have to provide rebates to consumers if they spend less than 80 to 85 percent of premium dollars on medical care.

Some existing plans, if they haven’t changed significantly since passage of the law, do not have to abide by certain parts of the law. For example, these “grandfathered” plans  can still charge beneficiaries part of the cost for preventive services.

If you’re currently in one of these plans, and your employer makes significant changes, such as raising your out-of-pocket costs, the plan would then have to abide by all aspects of the health law.

Q: I want health insurance but I can’t afford it. What will I do?

A: Depending on your income, you might be eligible for Medicaid, the state-federal program for the poor and disabled. Currently, in most states nonelderly adults without minor children don’t qualify for Medicaid. But beginning in 2014, anyone with an income at or lower than 133 percent of the federal poverty level, (which currently would be $14,856 for an individual or $30,656 for a family of four) will be eligible for Medicaid (based on current poverty guidelines).

Q: What if I make too much money for Medicaid but still can’t afford to buy insurance?

A: You might be eligible for government subsidies to help you pay for private insurance sold in the state-based insurance marketplaces, called exchanges, slated to begin operation in 2014. Exchanges will sell insurance plans to individuals and small businesses.

These premium subsidies will be available for individuals and families with incomes between 133 percent and 400 percent of the poverty level, or $14,856 to $44,680 for individuals and $30,656 to $92,200 for a family of four (based on current poverty guidelines).

Q: Will it be easier for me to get coverage even if I have health problems?

A: Insurers will be barred from rejecting applicants based on health status once the exchanges are operating in 2014.

Q: I own a small business. Will I have to buy health insurance for my workers?

A: No employer is required to provide insurance. But starting in 2014, businesses with 50 or more employees that don’t provide health care coverage and have at least one full-time worker who receives subsidized coverage in the health insurance exchange will have to pay a fee of up to $2,000 per full-time employee. The firm’s first 30 workers would be excluded from the fee.

However, if you have a firm with 50 or fewer people you won’t face any penalties.

In addition, if you own a small business, the health law offers a tax credit to help cover the cost. Employers with 25 or fewer full-time workers who earn an average yearly salary of $50,000 or less today can get tax credits of up 35 percent of the cost of premiums. The credit increases to 50 percent in 2014.

Q: I’m over 65. How does the legislation affect seniors?

A: The law is narrowing a gap in the Medicare Part D prescription drug plan known as the “doughnut hole.” That’s when seniors who have paid a certain initial amount in prescription costs have to pay for all of their drug costs until they spend a total of $4,700 for the year. Then the plan coverage begins again.
That coverage gap will be closed entirely by 2020. Seniors will still be responsible for 25 percent of their prescription drug costs.

The law also has expanded Medicare’s coverage of preventive services, such as screenings for colon, prostate and breast cancer, which are now free to beneficiaries. Medicare will also pay for an annual wellness visit to the doctor.

The federal government’s payments to Medicare Advantage plans, run by private insurers as an alternative to the traditional Medicare, were cut in 2011 and will continue to be reduced in future years. Medicare Advantage costs more per beneficiary than traditional Medicare. Critics of those payment cuts say that could mean the private plans may not offer many extra benefits, such as free eyeglasses, hearing aids and gym memberships that they now provide.

Q: Will I have to pay more for my health care because of the law?

A: No one knows for sure. Even supporters of the law acknowledge its steps to control health costs, such as incentives to coordinate care better, may take a while to show significant savings. Opponents say the law’s additional coverage requirements will make health insurance more expensive for individuals and for the government.

That said, there are some new taxes and fees. For example, starting in 2013, individual with earnings above $200,000 and married couples making more than $250,000 will pay a Medicare payroll tax of 2.35 percent, up from the current 1.45 percent, on income over those thresholds. In addition, higher-income people will face a 3.8 percent tax on unearned income, such as dividends and interest.

Starting in 2018, the law will also impose a 40 percent excise tax on the portion of most employer-sponsored health coverage (excluding dental and vision) that exceeds $10,200 a year and $27,500 for families. The tax has been dubbed a “Cadillac” tax because it hits the most generous plans.

Q. Has the law hit some bumps in the road?

A: Like any major piece of legislation, some aspects have not worked out as well as its authors intended.
For example, the law created high-risk insurance pools to help people purchase health insurance. But enrollment in the pools has been less than expected. In February, the Obama administration announced that almost 50,000 people had signed up for the high-risk pools, but the program, which began in June 2009, was initially expected to enroll between 200,000 to 400,000 people. The cost and the requirements have been difficult for some to meet.

For example, applicants must be uninsured for six months because of a pre-existing medical condition before they can join a pool. And because participants are sicker than the general population, the premiums are higher.

Enrollment has increased since the summer, after the premiums were lowered in some states by as much as 40 percent and some states stepped up advertising.

Another feature of the law that hasn’t worked as envisioned is its long-term care provision. The Community Living Assistance Services and Supports program (CLASS Act) was designed for people to buy federally guaranteed insurance that would have helped consumers eventually cover some long-term-care costs. But last fall, federal officials effectively suspended the program even before it was slated to begin,  saying they could not find a way to make it work financially.

 Related stories:

Amid controversy, health care law changes marching on

By Michelle Andrews
Kaiser Health News

Two years after its passage, the sweeping health care overhaul remains deeply controversial, with both political parties trying to use it to their advantage in the upcoming elections. As GOP lawmakers constantly deride "Obamacare" and threaten to repeal it, it’s easy to forget that implementation marches on, and a number of notable changes will take effect for consumers this year. 

They will, that is, unless the Supreme Court strikes down some or all of the law, including the requirement that nearly everyone have health insurance beginning in 2014. If that happens, all bets are off. Provisions that have already taken effect -- such as allowing adult children to remain on their parents’ health plans until age 26 and the 50 percent discount on brand-name drugs for seniors who reach the so-called donut hole in their prescription drug plans -- could be rolled back, and provisions for 2012 cancelled. The court will hear arguments in the case later this month and a decision is expected this summer.

If the law stands, here are the major new provisions that will affect consumers this year:

Free contraception coverage
Starting in August, the Obama administration's new rules on contraceptive coverage that have generated such controversy take effect. That means that women in a new health plan or in an existing one that has changed its benefits enough to not be considered grandfathered under the law will be able to receive contraceptives without an out-of-pocket charge. In addition, these plans will have to provide a variety of basic women’s health services, including well-woman visits (breast exams, pap smears, etc); screening for gestational diabetes; HPV testing; counseling for sexually transmitted infections; counseling and screening for HIV; and screening and counseling for interpersonal and domestic violence.

Religious employers such as churches are exempt from the new requirement. Colleges, hospitals and other employers that are affiliated with religious institutions are not exempt, but employees at those institutions will receive free contraceptive services from their employer's insurer.

Religiously-affiliated employers have a one-year grace period to implement this change, so some employees may not receive the free benefit until August 2013.

Rebates for consumers
Under the health-care overhaul, insurers have to spend at least 80 to 85 percent of premium revenues on medical claims and quality improvement or else rebate the difference to policyholders. In most group plans, that would mean the employer.

How much consumers can expect to receive remains an open question. An analysis by the National Association of Insurance Commissioners, based on 2010 data, estimated that insurers would have returned $2 billion to consumers had the provision been in force then. The analysis said rebates would have gone to 53 percent of people in individual plans, 23 percent in small-group plans and 15 percent of large-group plan members.

In December, the Obama administration estimated that 9 million Americans might receive rebates totaling up to $1.4 billion, also based on 2010 data. The administration says some reports show insurers have been moderating their premium increases to avoid having to pay rebates. But other policy experts aren't so sure.

"My guess is that rebates will be higher [than the NAIC estimate] in 2011," says Timothy Jost, a law professor at Washington and Lee University who helped prepare the NAIC report. "Insurers seem to have raised their premiums based on projected increases in utilization that never occurred."

Clearer descriptions
Beginning in September, at the start of the open enrollment season, all health plans will have to provide concise, consistent plan information aimed at allowing consumers to easily understand their benefits and compare plans.

Every plan will be required to give people a short summary of coverage and a uniform glossary of terms. It will also have to provide examples of how much the plan would cover if someone had a baby or was managing Type 2 diabetes -- two common situations that should make it easier for people to compare plans.

"This is a big deal," says Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation. "Some of the materials people get explaining their health plan benefits are extraordinarily confusing, and this should make it clearer." (Kaiser Health News is an editorially-independent project of the Foundation.)

Shrinking doughnut hole
The health care overhaul is slowly eliminating the ‘doughnut hole.’ This is the break in Medicare prescription drug benefits that, in a standard plan, begins after total drug spending by the beneficiary and the health plan exceeds $2,930 and continues until the beneficiary has hit the $4,700 out-of-pocket limit.

Last year, Medicare beneficiaries with high drug costs got a 50 percent discount on brand-name drugs once they reached the doughnut hole. This year, they'll see a 14 percent discount on generic drugs as well.

Drug costs will continue to diminish in coming years, until in 2020 the doughnut hole no longer exists and Medicare beneficiaries with drug plans will simply be responsible for 25 percent of their drug costs.

'Accountable Care'
Last December, the administration announced that 32 health-care organizations would participate in a three-year Pioneer Accountable Care Organization programaimed at providing better, coordinated care for 860,000 Medicare beneficiaries. Providers -- including hospitals, clinics and physician groups -- that work together to improve beneficiaries' health and to bring costs down will share in the savings that they achieve.

Although Medicare beneficiaries may not realize that their health-care provider is participating in the program, they may start to notice changes in their care this year, says Debra Ness, president of the National Partnership for Women and Families. She leads the Campaign for Better Care, a coalition of organizations focusing on improving health-care delivery.

"For some of these folks, it may start to feel like they have a team working with them, or like their primary-care provider is developing an individualized care plan," she says. "Compared to what happens now, it could feel like a pretty big change."the