6 Ways to Cash In On the New Health-Care Reform Law
Kiplinger Personal Finance
After a tumultuous infancy, the health-care reform law celebrated its first birthday
Here's what you need to know to make the most of the new rules:
1. Health coverage for adult children.
One of the highest-profile changes was the rule permitting adult children to stay on their parents' health-insurance policies until age 26, rather than kicking them off when they turn 21 or graduate from college. You usually need to add your kids to your policy during open enrollment in the fall for coverage to start at the beginning of the next plan year. But parents may add adult children in the middle of the year under certain circumstances, such as if the kids lose their own health-care coverage. Contact your insurer or employer for specific sign-up rules.
If you already have family coverage for younger siblings, then you may not have to pay more to add your grown kids. But if you have to switch from an individual plan to a higher-cost family plan, it pays to compare the extra premiums with the cost of buying the young adult his or her own policy. In many states, a healthy twentysomething can buy an individual health insurance policy for about
(See Keeping Adult Children Insured for more information about the new rules and alternatives: http://www.kiplinger.com/columns/ask/archive/keeping-adult-children-insured.html#)
2. Coverage for preventive care.
Many insurance plans must now provide certain preventive-care screenings without charging deductibles or co-payments. Depending on your age, this rule may apply to blood-pressure, diabetes and cholesterol tests, mammograms and colonoscopies, flu shots, routine vaccines, well-baby and well-child visits and other services.
If your health-insurance plan has not made major changes to its costs and benefits since health-care reform was enacted (technically called a "grandfathered" plan), the preventive-care requirements may not apply. Ask your insurer or your employer's benefits office whether your plan qualifies.
(See the preventive-care page at Healthcare.gov for a detailed list of the eligible services: http://www.healthcare.gov/law/about/provisions/services/lists.html)
3. Restrictions on using flexible spending money for nonprescription drugs.
Starting this year, you may no longer use tax-free money in your flexible spending account or health savings account to stock up on over-the-counter drugs, such as pain relievers and allergy medications, with the exception of insulin. But there is a loophole: You can use the money if you get a prescription. Don't schedule a special appointment, but the next time you're at the doctor's office, ask for prescriptions for any pain relievers, allergy medications, anti-fungals or cough-and-cold medicines you use regularly.
(See Make the Most of the New Flex-Account Rules for more about this and other changes to FSAs: http://www.kiplinger.com/columns/ask/archive/make-the-most-of-the-new-flexaccount-rules.html)
4. Stiffer penalty for nonmedical withdrawals from a health savings account.
Although HSAs have always provided attractive tax benefits, the downside was that you paid a 10 percent penalty if you used the money for nonmedical expenses before age 65. That penalty has now doubled, to 20 percent, starting in 2011.
But there are still plenty of medical bills you can spend the money on penalty-free at any age, including insurance deductibles and co-payments, prescription drugs, uninsured vision and dental care, and a portion of long-term-care premiums (based on age).
You may open a health savings account if you have a health-insurance policy with at least a
(See What to Know About Health Savings Accounts and Health Savings Account Answers for more information about how these plans work and which expenses qualify: http://www.kiplinger.com/columns/ask/archive/make-the-most-of-the-new-flexaccount-rules.html#)
5. The shrinking
The worst thing about the
This year, after your total drug costs reach
6. New coverage for people with preexisting conditions.
The health-reform law will eventually prohibit insurers from rejecting people because of their health. But that rule doesn't take effect until 2014, so the law also created high-risk insurance pools to help cover people with health problems until then.
The Pre-Existing Condition Insurance Plan sounds good on paper, but it has been less popular than expected because of a big catch: You may only qualify for coverage if you've been uninsured for at least six months.
The new pools -- some are run by states, some by the federal government -- can be a good solution for people who have been uninsured for an extended period of time. But there are better options for people with health problems who are about to lose coverage: You may have other federal and state protections, including coverage-extension requirements or access to state high-risk pools that existed before health-care reform and may not have a six-month waiting period.
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Personal Finance - 6 Ways to Cash In On the New Health-Care Reform Law
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