It was a historic moment when President Obama signed the United States Patient Protection and Affordable Care Act on 23 March 2010. The coverage of this reformative healthcare law commenced on 1 January 2011. The law has kick-started comprehensive health insurance reforms that would need four years to come in full force. By 2014 the adjustments would have been made at all levels in health insurance agencies and new coverage parameters would offer the full advantage as designed by this law.

Key components of the United States Patient Protection and Affordable Care Act

• Special care was given to the seniors. The law provides free preventive services which include Medicare personalized prevention plans and annual wellness visits.

• Seniors who enter the coverage gap would be eligible for 50 percent discount on branded drugs (with prescription) under Medicare Part D.

• The new law requires that insurance companies use at least 85% of the funds collected as premium from plans sold to large employers be spent on improving health care services quality. For plans sold to individuals and small sized organizations, the insurance companies are required to use 80% of the premium in the same manner. If they cannot do so, for any reason, they would be required to provide discounts to their customers.

• Because Medicare is paying all insurance companies of Medicare Advantage about $1,000 more per person than the Original Medicare, the premiums are obviously higher for all Medicare beneficiaries. This increase is also applicable for Medicare Advantage beneficiaries who are not yet enrolled under this plan, a number which accounts for 77% of the total beneficiaries enrolled. The new law eliminates this problem by offering all guaranteed medical benefits to the people enrolled in Medicare Advantage plan, while high quality care is taken care of by bonus payment Medicare Advantage plans.

• A new Center for Medicare & Medicaid Innovation is being established that would have as its primary goal researching and looking for novel ways to improve healthcare delivery system to patients. These improvements are expected to reduce the rising costs of CHIP (Children’s Health Insurance Program), Medicaid, and Medicare. Funding will be made available for this purpose in October 2011.

• By 2014 insurance plans would drop all discriminations against pre-existing conditions. Until then, with effect from 1 July 2011 all states will have option to offer a pre-existing condition insurance plan that would serve as a bridge until 2014. Alternatively, the Department of Health and Human Services of each state would offer a special plan.