New Year, New Health Care Provisions: What You Can Expect

Dec. 30, 2010— -- The new year brings new changes in the U.S. health care system.

Although most of the new provisions that will roll out next week as part of the Affordable Care Act apply mainly to insurers, they will have a direct impact on consumers too.

Here's a look at some of the changes Americans can expect starting Jan. 1, 2011.

End of Life Care:

One provision that triggered particular controversy earlier this year was end-of-life counseling, which the federal government will pay for starting Jan. 1.

The White House points out that the option to allow older Americans to receive end-of-life counseling was signed into law by President George W. Bush, and the only new aspect is that such visits will now be covered as part of the new annual wellness visit created by the Affordable Care Act.

Still, the provision has revived discussion of "death panels," a term first coined by former Alaska Gov. Sarah Palin, and could be one of the targets for repeal or defunding in the new Congress.

Filling the Medicare 'Doughnut Hole':

Pharmaceutical manufacturers will have to provide a 50 percent discount on brand-name prescription drugs to older Americans who fall into the "doughnut hole," the out-of-pocket expenses Medicare recipients have to pay once their prescription drug costs reach $2,830.

The "doughnut hole" will eventually be phased out so that enrollees in the Medicare Part D drug coverage program will be responsible only for 25 percent of their prescription drug costs by 2020.

In 2010, elderly Americans who fell into the gap received a $250 rebate check.

More Medicare Benefits:

There will be a 10 percent Medicare bonus payment for primary care services, and a 10 percent Medicare bonus payment to some surgeons in specialties with fewer doctors.

That component of the health care bill lasts until Dec. 31, 2015.

The new law eliminates any cost sharing Medicare beneficiaries need to pay for preventive care and waives the deductible for colorectal cancer screening tests.

A 15-member, independent advisory board will be established to study how to reduce Medicare spending if it exceeds targeted growth rates.

Medical Loss Ratio for Insurers:

Under the new law, insurance companies serving the large group market will have to devote 85 percent of every dollar to patient care and improving quality of care, and not to such expenses as overhead costs, executive salaries or dividends for shareholders. For those serving small business and individuals, that has to amount to 80 percent of every dollar.

If insurance companies fail to meet these standards, they will have to provide rebates to consumers.

The medical loss ratio -- the ratio of medical expenses to administrative spending -- came under fire last year when some companies, such as McDonald's, reportedly threatened to drop limited coverage plans because of the new standards.

Medicaid Expansion:

A new program will go into effect that will provide matching federal funds for long-term care services under Medicaid. The federal government will also provide funds for home health care and attending services for people with disabilities.

The Medicaid expansion under the new health care law has met with resistance from many state governments that say it puts additional burdens on them at a time when they're struggling with budget deficits.