Nine Key Provisions of the New Health Care Reform Law Take Effect January 1, 2011

Here is a list of the nine key provisions of the new national Health Care Reform Law that take effect on January 1, 2011:

  • Restriction on Insurance Company Use of Premium Dollars. Health-insurance companies will now be required to spend 80 to 85 percent of premium dollars on medical care and quality improvements for patients, rather than on administrative costs or profits for the insurance companies.  Companies that do not comply will be required to provide a refund to their customers beginning in 2012.
  • According to the Department of Health and Human Services, the new rules will protect up to 74.8 million insured Americans, and up to 9 million people could be eligible for rebates from insurance companies worth up to $1.4 billion.

  • Closing the Medicare drug coverage “doughnut hole.”  Pharmaceutical companies are now required to provide a 50 percent discount on brand-name prescription drugs to Medicare recipients who fall into the coverage gap in the Part D drug plans.  In addition, federal subsidies are being phased in for generic prescriptions in this Part D coverage gap. The coverage gap is to be closed within the next 10 years.
  • Preventive care for seniors. Medicare recipients will receive free preventive services, including annual checkups and certain screenings.  Cost sharing will no longer be required for qualified preventive care. Personalized prevention plans for Seniors are among the free preventive services provided under the new law.
  • Medicare bonus payment for some physicians. Primary-care physicians and general surgeons will receive a 10 percent bonus payment for treating Medicare patients.
  • Center for Medicare and Medicaid Innovation Implemented.  This center, with the purpose of testing new ways of delivering care to patients that reduce costs but maintain or improve quality, was to be established by Jan. 1. But it is already established and operating, and has launched several initiatives.  One initiative is a Medicare demonstration project in which eight states will participate, to evaluate the performance of health-care providers when they better coordinate their services and payments.
  • Community Based Care Transitions Program. This new program, which coordinates care and connects senior patients to services in their communities upon discharge from hospitals, aims to improve care for seniors after they leave the hospital, and thereby reduce hospital re-admissions.
  • Changes to Medicare Advantage Program.  Reforms will be implemented to eliminate over-payments to insurers and over-charging of Medicare beneficiaries in the Medicare Advantage Program. This is a program through which some Medicare recipients receive their benefits through private insurance companies, rather than directly from the federal government as in the traditional Medicare system.
  • Incentives in Medicaid for Chronic Disease Prevention. This plan includes $25 million for state grants aimed at helping low-income recipients of Medicaid address chronic problems, such as weight control, tobacco use, and various health conditions.
  • New Rule for Tax-Free Savings Accounts.  Over-the-counter drugs not prescribed by a doctor will no longer eligible for reimbursement from flexible spending accounts and health reimbursement accounts.

Read More » Health care reform 101: What will kick in Jan. 1? –


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