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Health reform one year later: The haves and have-nots—so far

Consumer Reports News: March 21, 2011 03:35 PM

Americans don't know much more about the Affordable Care Act today than they did when President Obama signed into law a year ago, on March 23, 2010. A Kaiser health-tracking poll released last week found that 52 percent of the public admits to not knowing enough about the law to assess how it affects them personally--compared with 56 percent who said that a year ago in the same poll.

So in honor of the law's first birthday, we decided to provide a rough scorecard of who's been helped so far by the law, and who hasn't. Consumer Union's new guide, The Affordable Care Act: The First Year, can help decipher what the law means for you and your family.

Who's been helped

Medicare recipients. While seniors view the law less favorably than the population as a whole, Medicare recipients actually have gained the most from the new law. This year they're getting free coverage of preventive services and an annual wellness visit, and, most notably, major help in paying for prescription drugs in Medicare's notorious doughnut hole. Predictions of drastic cutbacks in private Medicare Advantage plans, whose subsidies are being reduced by the law, turned out to be wrong.

Young adults. The law allows parents to keep children on their health plans until they turn 26, even if they're not in school or even living at home. Federal officials estimate that this year, more than 1.2 million young adults will benefit from this change.

Small businesses. Most of the non-Medicare subsidies in the new law won't start until 2014. One exception is small businesses, which have historically had the hardest time finding and affording group health insurance. Businesses with fewer than 25 employees and average wages (not counting the owner's) of less than $50,000 are now eligible for tax credits of up to 35 percent of the employer's premium contribution. The subsidies and the number of eligible small business will both increase in 2014, but the Commonwealth Fund, a non-partisan health care research organization, estimates that between now and then firms employing about 3.4 million workers will have already been helped.

Some early retirees. A little-known subsidy in the health-reform law helps early-retiree insurance plans with expenses for retirees who develop costly health conditions. Consumers can't apply for this program on their own so even those being helped by it may not know it. But according to the most recent federal update more than 5,000 plans from every state are participating in the program.

Who's still waiting

People ages 55 to 65. People this age who lose access to group health coverage often find themselves in a world of financial pain if they have a pre-existing condition. We frequently hear from people in this predicament (examples here, here, and here), and frankly there's not much help for them until 2014, when health reform's major changes kick in.

At that point, they'll be able to go to their state's health-insurance exchange and buy a comprehensive policy without fear of being turned down or charged an arm and a leg because of their pre-existing condition. It's true that the health-reform law established subsidized Pre-existing Condition Insurance Plans in every state, but you have to be uninsured for six months to be eligible, and even then the premiums can run more than $500 a month. Perhaps that's why only 12,000 people had signed up by February, 2011.

Lower-income and unemployed adults. Nearly one in four adults-- an estimated 43 million people--said they or their spouse had lost a job in the previous two years, and nearly half of those said the job had been their household's source of health insurance, according to a recent Commonwealth survey. Of those, 57 percent became uninsured as a result. Twenty-six million people said they'd tried to buy insurance on the individual market, but 60 percent said it was "very difficult or impossible" to find coverage they could afford, and 35 percent said they were turned down, charged more, or had certain coverage excluded because of a pre-existing condition.

In 2014, such problems will cease to exist. Pre-existing conditions will no longer be a factor, and income-based subsidies will help low-income or unemployed adults pay for comprehensive coverage. Until then, there's not much help available, which goes a long way towards explaining why 52 million working-age adults went without health insurance at some point last year.

--Nancy Metcalf, senior program editor

Joel Keehn

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