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Health Care Reform in Plain English

The term "health care reform" is being used a lot these days. Health care reform became a reality with the passage of two related bills:

Because these two bills work together, we often refer to health care reform as a single "new law" for the sake of simplicity.

Health care reform law has many separate provisions that will come into effect at different times over the next eight years. Here are some of the most important ones:

Individual Mandate

This law requires most Americans to buy health insurance by 2014 - or pay a penalty for not buying it.

Subsidies To Make Insurance More Affordable

The government will offer payments to help offset the cost of insurance for some people and tax credits to some small businesses to help offset health insurance costs.

Expanded Eligibility for Medicaid

This program, which helps people with low incomes pay for medical care, will now accept more people.

New Insurance Rules

No one will be excluded from coverage or have to wait for a pre-existing condition to be covered. Benefit plans will be allowed fewer coverage limitations. Young adults will be able to keep dependent coverage until age 26. There will be even tighter standards for canceling coverage based on the actions of an insured individual (such as fraud).


New state-run "health insurance exchanges" will give individuals and small groups a new way to compare plans and buy insurance from private companies.

Preventive Care

The new law requires health insurance plans to cover 100% of the costs of certain preventive care and health screenings which are intended to help people stay healthy and avoid more serious and costly treatments later in life.

Increased Prescription Assistance

Certain Medicare beneficiaries who buy prescription drugs using Medicare Part D receive additional money in 2010 and reductions in out-of-pocket cost in future years to help narrow a gap that existed before health care reform: the so-called "doughnut hole."

These are the most significant and talked-about provisions of health care reform, but the new law contains many other detailed changes to the way health care is developed, delivered and paid for in America.

Read the Law: