Provisions effective January 1, 2011:
General provisions

• Tax-free health accounts (FSA, HSA, HRA) may no longer be used to purchase OTC drugs without a prescription.
• Health insurers must report the proportion of premiums spent on medical care and healthcare quality improvement. Individual market and small group business must have a minimum MLR of 80% and large groups must have a minimum MLR of 85%. BCBSNC has consistently met these thresholds.
• Health plans are required to revise their internal appeals processes to include additional rights for members:
  
  • Right to review information used to make benefit determination
  • Right to receive certain denial notices in a culturally and linguistically appropriate manner with additional information such as denial and treatment codes.
  • Non-grandfathered, self-funded plans must also have an external review process.

Provisions specific to Medicare beneficiaries:

• Pharmaceutical companies will subsidize brand name drugs 50 percent. Medicare beneficiaries will be responsible for the remaining 50 percent. By 2020, beneficiaries will pay 25 percent of the cost of brand name drugs.
• Medicare Part D plans reduced the beneficiary cost share of generic prescriptions by 7 percent. Beneficiary cost share will reduce an additional 7 percent each year until 2020, when beneficiaries will pay 25 percent of the cost of generic drugs.
• Many preventive services covered with no cost sharing for most Medicare beneficiaries.

Provision effective March 23, 2011:

• Standard menu items at chain restaurants and in vending machines will be required to have nutritional labeling of their content.

• Dependents under age 26 may be eligible to remain on your plan. It will depend on whether or not the dependent is eligible for coverage through their employer.
• Children under the age of 19 cannot have insurance coverage denied or delayed because of pre-existing conditions.
• Insurance plans must cover, at no out-of-pocket cost to the individual, qualified preventive services.
• Health insurance plans can no longer limit the amount of health benefits you receive over your lifetime. Annual limits on care are also restricted.
• Insurers cannot terminate (or "rescind") existing policies except in cases of fraud, or where information that the insured individual provided in the policy application is intentionally misstated and that information affected:
  
  • The insurer's decision to issue coverage in the first place
  • The terms of the coverage issued
  • The premium charged
• Small employers with fewer than 25 employees whose wages average less than $50,000 may qualify for tax credits if they provide health insurance and meet other necessary requirements. Learn more about tax savings for small businesses. 
• Early Retirees Reinsurance Program - Employers may qualify to obtain financial help in order to provide coverage to those aged 55 or older but not yet eligible for Medicare - which may provide financial relief to early retirees.

The provisions covered on this page become effective for plan years beginning September 23, 2010, and after, upon January 1, 2011, for individual coverage.

For health insurance to work properly, everyone must be in the system. This allows risk - and costs - to be spread across the sick and the healthy, the young and the old. The individual mandate is believed to be the easiest way for this to happen.

When people without insurance get sick or hurt, the cost of their care is paid by other users of the health care system and society in general. For example, emergency rooms can't turn away people who are unable to pay, so everyone else ends up sharing the cost of this uncompensated care. When the individual mandate is enacted, millions more people will pay into the system, so there will be more money available to pay for care when people need it.

The insurance industry has long supported an individual mandate. Our biggest concern is that this individual mandate isn't strong enough. The new law calls for an annual penalty of the greater of $695 per person (up to a maximum of $2,085 per family), or 2.5% of household income. And it will be three years before the penalty reaches even that level. At that rate, we think millions of Americans will choose to pay that penalty instead of their premiums.

Yes, insurers will be required to cover everyone.

Beginning in 2014, the new law requires that all individuals have coverage and insurers must offer coverage to anyone, regardless of health status. Insurers cannot vary premiums based on health status either.

Beginning in 2014, states or the federal government will establish "American Health Benefit Exchanges" as an alternate way for people to shop for health insurance from private companies. People who use exchanges will be offered a choice of health plans at different price levels.

Each exchange will set up rules and communication tools to help people make fair, accurate comparisons. Those individuals and small employers who are eligible for subsidies will only be able to claim them by purchasing coverage through an exchange. At first, exchanges will serve individual people and small employers. Later, states will have the option of opening them to larger employers.

Exactly how insurance exchanges will work is unknown at this time, but some people think the experience will be similar to how travel plans can be made on websites like Orbitz^® or Expedia^®.

Health care reform requires all people to buy health insurance if the least affordable plan available to them costs no more than 8 percent of their monthly income, and if that income is above the federal poverty line.

Those who fall within this requirement and don't buy insurance will pay a penalty - which will eventually grow to a maximum of $695 a year per person (up to a maximum of $2,085 per family) or 2.5 percent of income, whichever is greater.

There's no simple answer - it depends on your insurance status and how much care you need.

We believe that the price of insurance on average will increase, especially plans for individuals and small businesses, as a result of certain provisions in the reform legislation. These provisions guarantee richer levels of benefits than most consumers buy today.

Insufficient discounts for the young and healthy will encourage many of them to forgo coverage and pay the penalty instead. New fees and taxes mandated by the new law will also likely increase the cost of premiums as they are phased in. For the millions of individuals and small employers who qualify for subsidies, what they actually pay for insurance themselves may not increase.

Federal agencies must work out how subsidies would be paid. The Congressional Budget Office estimates that about 20 million American households will be eligible for subsidies. Part of health care reform is an expansion of Medicaid (a program through which state and federal governments provide health insurance for the poor and disabled). Beginning in 2014, people who make no more than 133% of the federal poverty level can receive Medicaid.

Some of the factors driving health insurance premiums:

• Increasing use of the health care system due to an aging population, obesity and chronic illnesses
• New treatments
• Prescription drugs
• Expensive new technologies

Changing the way medical care is paid for by insurers and government programs is considered to be the most effective way to address these factors.

While the new law establishes a few new programs aimed at these cost factors, the law doesn't aggressively attempt to control rising health care costs. How do medical costs affect what people pay for health insurance?

If your plan started on or after October 1, 2010, your dependent can remain on your plan until his/her 26th birthday. For customers on BCBSNC plans that started before October 1, 2010, there is a good chance that 25-year-old dependents are still eligible for coverage. BCBSNC extended dependent coverage to the age of 26 in 2008 for most of our customers.