Health Reform -- The Early Benefits

Last week, the U.S. Census Bureau reported the number of people without health insurance shot up by another 4.4 million for a total of 50.7 million people. That's the biggest jump in a year ever, and it's a dramatic reminder of why we need health reform.

But the news also reminds us that we now have a new health reform law that is currently helping people get coverage and providing some important new protections. The next wave of reforms is coming up this week on September 23, the six-month anniversary of the law's passage.

Though it's far from perfect, the health reform law points us in the right direction. If you examine what's really in the law, there are many good provisions that help a lot of people. Here are a few examples of what I'm talking about:

Health insurers have a new set of rules. And it's high time. They won't be able to cancel your coverage if you get sick, impose financial barriers to emergency care, put a lifetime dollar limit on your coverage, or deny coverage to children under age 19 who have pre-existing conditions. They also have to begin to tell you in plain English what's covered and not covered, what they'll pay for specific services, and what rights you have to appeal their decisions. And, already, there are new tools that let you compare health plans and policies in every state in ways you couldn't (and insurers didn't want you to) in the past. You can check out these comparisons at

The law preserves job-based coverage. If you get health insurance through your job, your coverage will likely remain pretty much the same, except for some added consumer protections. For example, over time, insurers have to improve the procedures by which you can appeal coverage denials. At the same time, some small businesses get a leg up. Starting this year, those with up to 25 full-time workers and average wages under $50,000 per worker are eligible for tax credits of up to 35% of premium costs for two years. Big businesses get help, too. Those that provide coverage to early retirees aged 55 to 64 can get a government subsidy if they preserve that coverage until 2014.

Some uninsured people have new access to coverage now. In addition to workers at some small firms and early retirees, two other groups benefit right away. Those are young adults up to age 26, who can now stay on their parents' health plans, and uninsured people with pre-existing medical conditions, who can now enroll in "high risk" pools being set up in all 50 states.

Medicare is strengthened. Medicare certainly faces big challenges in the future, but the reform law lays the foundation for preserving and strengthening it, even as seniors get new benefits. Medicare was projected to go bankrupt by 2017. The reform law extends that to 2029 through belt-tightening, attacking fraud and waste, and new sources of revenue. Amid the belt-tightening, the much-despised "doughnut hole" in prescription drug coverage is gradually closed over the next decade. And, starting in 2011, proven preventive care services will be covered 100 percent, with no-copays or deductibles.

All well and good you say, but what about rising health premiums? Is this going to help? There are some good mechanisms baked into the law that should help lower the out-of-control health-cost trend. These provisions compel states to scrutinize health insurance rate hikes more closely and require that insurers spend at least 80 to 85 cents out of every premium dollar on actual medical care and quality improvement. Some insurers are blaming short-term rate increases on the reform law, but we think that's disingenuous and misleading, as their profit margins are well above average.

There is no silver bullet for everything that ails the American health-care system. But when this law is fully implemented, it should steadily reduce the number of people who don't have health coverage while improving services for those who do. Six months after health reform became law, we're beginning to see some real benefits that put us on the right track to better health care.

A free consumer guide about the changes in health care and what they mean to you is available on our web site Consumer Reports Health.