As new provisions related to last year's massive health-care overhaul take effect, 2011 will bring important changes to U.S. health-insurance rules.
The new rules, which took effect January 1, are designed to help those caught in Medicare's "doughnut hole," offer seniors more preventative care, and limit how much of their customers' money health-insurance companies can keep for overhead and profit.
These provisions were not affected by a Dec. 13 federal court ruling in Virginia that declared another piece of the new health-care law - therequirement that all Americans buy health insurance - unconstitutional.
The judge allowed implementation of the overhaul to continue until a higher court rules on the issue.
The new rules include:
*A provision that limits what health insurers can do with the money their customers send in as premiums.
The rule requires that insurers spend at least 80 percent of this money on the customers themselves. The companies must either spend this money to pay insurance claims or use it for activities that improve customers' health.
For policies that are sold to large groups instead of small companies and individuals, the number is even higher: 85 percent. The remaining 15 or 20 percent of the money can be used for a company's salaries, marketing and overhead - or kept as profit.
Previously, there was no federal restrictions on insurance companies' spending. The federal government says some insurers kept 30 or even 50 percent.
Insurance companies say this could cause them to cut back on the services they offer, or even pull out of states where administrative costs are higher.
State officials also worry that the companies might cut the fees they pay to insurance brokers. That, they fear, would eliminate key middlemen who help individuals navigate a complicated insurance system.
*A provision that provides prescription-drug discounts for seniors in Medicare's "doughnut hole."
The doughnut hole is a controversial gap in the Medicare prescription-drug benefit passed in 2003. In 2010, for instance, Medicare paid for part of the cost of drugs - until the total cost of the drugs hit $2,830.
After that, seniors were responsible for 100 percent of the cost of their drugs, until they had spent $3,610 of their own money. That was the other side of the doughnut hole, and federal insurance kicked in again.
This provision will give Medicare recipients stuck in the doughnut hole a 50 percent discount on the price of brand-name prescription drugs. Health-care activists are worried, however, that drugmakers will jack up their prices. In that case, customers would receive 50 percent off that higher number - which might not be much less than what they were paying before.
*A rule giving seniors free screenings for cancer and other diseases.
Nearly all Medicare beneficiaries will be able to receive for free all "preventive services" screenings given an A or B rating by the U.S. Preventive Services Task Force. That could include mammograms, colorectal cancer screening, bone mass measurement and nutritional counseling. Medicare will also provide one free "wellness visit" per year for patients who want a checkup.
*The creation of the Center for Medicare and Medicaid Innovation.
This new agency is aimed at slowing down the rapid rise of health-care costs. It is supposed to foster innovation in both ca