By now you have probably already heard more than you wish to digest about the Patient Protection and Affordable Care Act (ACA). Regardless of whether or not you are a supporter or an opponent of the new law, implementation of provisions that will affect you and your family is already underway, and it is important for consumers, like you and me, to know how and when we will be affected.
The ACA means so many different things for providers, the insurance industry and regulators, but what does it mean for you and me, the consumers? I will spare you the nitty gritty details of every single provision in the health care law, and perhaps we can start with the top ten provisions that I think consumers should be aware of.
1. Coverage cannot be denied to individuals with pre-existing conditions. I have heard horror stories from consumers who were denied health coverage because they were diagnosed with acid reflux disease or had freckles or even because they were pregnant. Under the ACA, insurance companies will no longer be able to refuse coverage to individuals with pre-existing medical conditions. Although this provision doesn’t kick in for adults older than 19 until 2014, insurance companies are prohibited from limiting or denying coverage to children with pre-existing conditions as of 2010. In the meantime, the law establishes funding for a temporary subsidized high-risk pool that provides coverage for uninsured adults with pre-existing conditions until health insurance exchanges are created in 2014.
2. Free preventive care. We all love freebies, and under the ACA, those of us with new policies will be receiving a major one. Effective as of 2010, new health policies from private plans must offer preventive care such as mammograms, colonoscopies, vaccinations and preventive screenings for free. So that means no co-pays, no deductibles and no coinsurance for these services.
3. Coverage cannot be rescinded. In addition to hearing countless horror stories about consumers being denied coverage due to pre-existing conditions, I have also heard stories that are just as horrific about consumers being dropped from their coverage once they become sick. Effective already is the provision that prohibits insurance companies from retroactively canceling consumers’ insurance coverage unless they can provide proof that the consumer intentionally committed an act of fraud. Of course, determining intent can be very subjective, especially if the insurance company is making that decision. Fortunately, for consumers, the ACA also creates new review boards that decide objectively what constitutes fraud.
4. Restrictions on imposing limits on insurance coverage. Some of us have insurance plans that include something like a $100,000 limit on coverage. That sounds great, right? Wrong! Anyone who has been diagnosed with a serious condition or who has experienced a medical emergency knows that $100,000 in health expenses can disappear very quickly, and once you have reached that limit, you are on your own and out of luck. Currently, under the new law, insurance companies are restricted from imposing lifetime dollar limits on coverage, and by 2014, they will be restricted from imposing annual limits on coverage.
5. Consumers will have more options to appeal coverage decisions. Many consumers have had to deal with the headache of receiving a letter stating that their insurance provider has denied their claims and in addition, they will not be able to appeal the decision. The new law ensures that consumers have access to an effective internal and external appeals process. In other words, consumers have the right to demand that their insurance provider reconsider a decision to deny payment for a medical procedure. Additionally, consumers can also make an external appeal to an independent reviewer.
5. Medicare beneficiaries can say goodbye to the “donut hole.” If you are a senior or if you have older family members or friends, then you are probably familiar with the Medicare “donut hole.” The “donut hole” represents the gap in prescription drug coverage that Medicare Part D beneficiaries have to account for. To clarify, once a Medicare beneficiary reaches around $2,250, in prescription drug benefits, then he or she will be responsible for paying the next $2,250 toward prescription drugs before Medicare coverage kicks back in. For some seniors who are already on fixed incomes, this means, cutting pills in half or deciding not to take medications altogether. Beginning in 2010, Medicare beneficiaries who hit the “donut hole” will receive a $250 rebate. Each year, that rebate will get larger until the “donut hole” is closed completely by 2020.
6. Consumers will be provided with tools to understand their health plans. Navigating insurance plans can be incredibly confusing and discouraging, especially when insurance companies fail to disclose information that can be important and helpful for consumers. When consumers do not understand what their plans include or what they are purchasing, they can be vulnerable to falling into medical debt. The ACA provides funding to states to establish or expand offices of health insurance consumer assistance in order to help individuals file complaints and appeals and understand their benefit packages. In addition, insurance companies will be required to publicly post consumer health insurance information.
7. Insurance companies will be prohibited from issuing unreasonable rate hikes. In 2010, insurance company rate hikes caught the media’s attention. Consumers were receiving notices informing them that their rates would be increased by up to 33% and that insurance companies have the right to issue rate increases more than once a year. Consumers were outraged, especially when insurance companies were unable to justify the rate hikes. The ACA creates a grant program to support states in requiring health insurance companies to submit justification for all requested premium increases.
8. Young adults can stay on their parents’ plan until age 26. Although some young adults are fortunate enough to land a job that offers them good health benefits right out of high school or college, the reality is that the majority of young adults are not this fortunate and have difficulty purchasing expensive private insurance plans on their own. Under the ACA, parents have to option to add or keep their children on their health policy until they turn 26, even if their child is not claimed as a dependent, lives in another state or has a full-time job.
9. No more penalties for using out-of-network emergency rooms. When you are suffering from a medical emergency, the last thing you want to be doing is worrying about whether or not your health plan will cover the emergency room services you are receiving. New health plans will be prohibited from requiring consumers to get prior authorization before seeking emergency room services from a provider or hospital outside a plan’s network. In addition, they will also be prohibited from requiring higher co-pays and co-insurance for these services.
10. The individual mandate. Most consumers are aware that by 2014, they will be required to have health insurance coverage. Without the individual mandate, the health reform law would not have been as viable. Younger, healthier individuals might opt out of coverage and the insurance pools would be disproportionately utilized by people who are older and sicker. As a result, premiums would be raised for everyone. Furthermore, because insurance companies are no longer allowed to deny coverage due to pre-existing conditions, the individuals who initially opted out of coverage can opt back in once they get sick. The mandate ensures shared responsibility among consumers. The ACA also includes subsidies for purchasing insurance for consumers who qualify and exemptions for reasons such as financial hardship, religious objection and immigrant status.
What we covered here is just the tip of the iceberg when it comes to the ACA, but hopefully this will serve as a starting point in understanding how you, the consumer, could be impacted by health reform. For more details about health reform and what it means for you, a good site to start with is www.healthcare.gov.