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.

What the New Health Care Law Means for You

The new law requires that Medicaid be expanded to cover Americans whose incomes are at or below 133 percent of the federal poverty level -- which equates to about $14,000 in 2010 for a person living alone.

Several states have cut their Medicaid benefits, including Arizona and Texas.

Other Provisions:

As part of the new changes, over-the-counter drugs will not be reimbursed through a Health Reimbursement Account or a Flexible Spending Account.

Small businesses that establish wellness programs will become eligible for grants, beginning in January 2011.

States will also start receiving grants, starting March 23, to establish insurance exchanges in which individuals and small-business owners can shop for coverage.

In what has become one of the most contentious parts of the health care legislation, many states are opposed to insurance exchanges. Meanwhile, some Washington lawmakers are proposing ideas to allow states to opt out of exchanges. Exchanges are set to go into effect Jan. 1, 2014.

A new Center for Medicare and Medicaid Innovation will be established Jan. 1 to examine new methods of payment and delivery to reduce health care costs.

In the coming year, nutrition labeling requirements will also be issued for chain restaurants and vending machines.

As many Americans renew their health insurance plans, they will likely see new benefits kick in that went into effect in 2010, such as allowing young adults to stay on their parents' health insurance plans until they turn 26, and no lifetime caps on insurance.

Political Fallout:

Even as new provisions roll out, the political debate over health care is far from subsiding.

"The real issue for next year is Medicare and Medicaid. There will be an all-out attack on those programs on the grounds that the deficit needs to be reduced," said Joseph White, director of the Center for Policy Studies at Case Western Reserve University. "It is very hard to see how any set of Medicaid cuts will fit with the Medicaid expansions that are a major part of the health care reform. The effects of Medicare cuts will be less direct, but will be damaging in their own right."

Incoming lawmakers who campaigned against the bill vow to repeal or defund parts of the legislation, even as it takes effect.

In the Senate, such lawmakers as Sen. Scott Brown, R-Mass., are crafting plans to revise the bill and give states more options.

The part that has garnered the most controversy -- and lawsuits -- is the requirement that all individuals have health insurance by 2014.

Opponents argue that the individual mandate is unconstitutional and should be cut, but whether any action is taken on it remains to be seen.

"Early in the new session they might pass repeal of this provision in the House, but even while doing this they will know that it is only symbolic, since it won't pass the Senate and even if it did, it would obviously be vetoed by President Obama," said Daniel S. Blumenthal, an associate dean for community health at Morehouse School of Medicine in Atlanta.

ABC News' Kim Carollo contributed to this report.