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Steps to Take Now to Prepare for ObamaCare

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health care reformNow that health care reform has passed, people want to know how they will be affected and when they will feel these effects.  Some measures will be noticed almost immediately, while others won’t be seen for a few years, or longer.  To prepare consumers for these changes to their health care, moneywatch.com suggests what people can do now to ensure they’re ready for some key measures outlined below.

Expanded Coverage for Dependents

On September 23, 2010, kids will be allowed to remain on their parents’ health plan until their 26th birthday, provided they’re not already covered by their own employer plan.  If a child age 25 or younger has been dropped from your plan, ask your insurer how to get him or her reinstated.  If this causes your premiums to rise significantly, compare the price increase with policies sold on the individual market to ensure you receive the best plan at the best price.

Reducing the Medicare “Doughnut Hole”

Currently, once seniors have spent $2,830 on prescription drugs, they then have to pay the next $3,610 in prescription bills out-of-pocket until coverage kicks in again at $6,440.  This costly gap in coverage is known as the “doughnut hole.”  Now, seniors who fall into the doughnut hole in any calendar quarter this year will receive a $250 rebate check.  Next year, seniors will receive discounts on prescription drugs, and more discounts will be applied until the doughnut hole is closed.  To prepare for this, people should save all Medicare documentation and prescription bills to prove they’re entitled to the rebates.

Cuts to Medicare Advantage Plus

Over the next three to seven years, government subsidies to Medicare Advantage Plus plans, which provide coverage and additional benefits to 11 million seniors, will be cut by $136 billion.  To prepare, seniors are encouraged to keep track of their Medicare renewal period.  Because prices and services could vary significantly from plan to plan as these changes take effect, seniors might need to make a new decision each year about whether to change plans.

Limits on Flexible Spending Accounts

On January 1, 2013, contributions to Flexible Spending Accounts (FSAs) will be capped at $2,000, and reimbursement for non-prescription drugs will no longer be allowed.  If you want to put away more money for medical costs, consider a Health Savings Account (HSA) instead of or in collaboration with your FSA.   HSAs allow you to save pre-tax money for future medical costs, and unlike a use-it-or-lose-it Flexible Spending Account, HSAs roll over from year to year.  To be eligible for an HSA, you simply need to pair it with a high deductible health insurance plan.

New Tax on Investment Income

Starting January 1, 2013, individuals who make more than $200,000 a year—or couples who earn more than $250,000 together—will be hit with a new 3.8 percent tax on investment income like dividends, interest and royalties.  To combat this, people can invest in tax deferred investments like municipal bonds or Roth IRAs.

In addition to the above measures, there are many other changes to be aware of as health care reform rolls out.  Visit moneywatch.com for more details on how to begin planning for the expected changes to your health care and finances.

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