Insurance Reforms Under the New Health Care Law
The insurance industry has undergone a complete overhaul as the federal government recently implemented major changes in the system. The aim is to provide affordable health care coverage to every person, especially for those who need it most and when it is most needed. The implementation of the Affordable Health Care Act instituted significant changes. Several exclusions imposed by insurance companies have been eliminated, while a number of inclusions have been instituted. Other major changes are expected to take place by 2014.
In addition, consumers can now find insurance coverage plans, government public programs, and community services through the Health Care.gov website. This site furnishes an online insurance tool for finding the insurance coverage tailor-fitted according to a person’s needs rather than the insurance company’s.
Health Care Coverage for Young Adults
Young adults, whether married or unmarried, who have no insurance coverage of their own, are now allowed to stay under their parent’s health care plan through age twenty-six. This reform in the insurance industry was based on the findings that 30 percent of young American adults are uninsured. Most of these individuals are still in college, in a start-up stage, or practically unemployed; thus, unable to set aside funds for their own health plans.
However, this is subject to the provision that by 2014, a child who receives an offer for an employee-based health plan of his own, shall avail of this offer, even if he or she is under twenty-six years of age.
Children, who age-out of the 26th year limit, will still be provided with coverage under a family policy with an open enrollment plan. The latter refers to the options open to the policy holder or to the insured, which may become available in the future, in order to meet the person’s needs and his budget, considered as affordable health insurance coverage.
In addition, employer-sponsored health care plans that include coverage for the employee’s children up to age 26 will not be taxable or form part of the employee’s income. This provision shall be applicable in various workplaces, including retiree plans and self-employed insurance coverage, all in accordance with their use as qualified tax deductible medical expenses.
To find information about insurance companies that now allow inclusion of coverage for children up to 26 years of age, under their parents’ health care insurance plans, refer to the list on this page under the section “Companies Responding to Secretary Sebelius’ Call for Early Implementation”.
Patient’s Bill of Rights Under the New Law
There is now a set of provisions designed to protect the patient’s rights to affordable insurance plans , especially for those who need the most medical assistance. This takes effect six months after the Act’s approval on September 23, 2010.
1. Insurance companies will no longer limit the care a person needs, or his or her family needs, including children and individuals with pre-existing conditions. This applies to all plans, whether employer-sponsored or self-financed, excluding those that already existed on March 23, 2010.
If a child has cancer at the time of enrollment, insurance companies are prohibited from excluding the child in the family’s insurance coverage. Hence, all critical care needed by the child for cancer treatment, are included as benefits under the child’s health care coverage.
By 2014, the pre-existing condition exclusion for all ages and all types of health plans, will no longer be applicable.
2. Policy holders are given the right to choose their own doctor, particularly if the policy holder already has his or her own primary care provider. This includes the parent’s’ own choice of a pediatrician, or the pregnant female’s choice of obstetrician or gynecologist. This ensures the right of the patient to get the proper health care they need to avoid unnecessary health care costs like hospitalization or expensive medical prescriptions.
3. Insurance companies are no longer allowed to set barriers to the policy holder’s right to emergency treatment. Pre-approvals for emergency treatment are now prohibited; hence, emergency treatments received from out-of network medical providers are now reimbursable, albeit subject to the procedures required on how these reimbursements should be processed.
4. Insurance companies are now prohibited from rescinding or retroactively rescinding the insurance coverage of individuals that develop injuries or health disorders during coverage. Policies can be rescinded only if the insurance company can prove there was intentional misrepresentation or fraud involved. However, unintentional mistakes will not be considered as grounds for rescinding the contract.
5. Lifetime limits on insurance coverage of policy holders shall no longer be imposed. Under this regulation, the policy holder or that of his covered dependent will have the benefits of insurance coverage for as long as it is needed.
6. New annual dollar limits shall be set according to the provisions of the recently approved health care law. Insurance companies are no longer allowed to set their own dollar limit on the amount of health care assistance that the policy holder will get annually. Instead, insurance companies shall adhere to the provision of the Act that the dollar limit, imposed on the policy holder or that of his covered dependents, shall not be less than $750,000 per year.
By the year 2011, this limit will be raised to $1.2 million per year and by 2012, the annual limit shall be no lower than $2 million. This rule applies to all new health care plans including those provided by employers, except those that already existed in March 23, 2010.
7. Affordable insurance coverage to individuals with pre-existing conditions is now available under the Pre-Existing Condition Insurance Plan (PCIP) up to 2014. Under this provision, individuals that were prevented from getting insurance coverage because of pre-existing medical conditions are furnished with the benefits of insurance coverage without any medical undertaking. Newborns are also entitled to have health care coverage under this plan.
Inasmuch as PCIP ends on 2014, it is expected that insurance companies will offer health coverage for those with pre-existing conditions. Otherwise, insurers that refuse to do so will be banned from the insurance industry. That way, individuals with pre-existing medical conditions are assured that there will be affordable insurance coverage available through the Health Insurance Exchange system.
For information about the Pre-Existing Condition Insurance Plan’s eligibility requirements and premiums, you can find information via the US Dept. of Health & Human Services webpage entitled Temporary High Risk Program.
9. The right of policy holders to receive benefits in proportion to the premiums paid. Based on the Medical Loss Ratio, health insurance issuers are required to submit information disclosing the proportion of how revenues from insurance premiums, were spent. The Medical Loss Ratio (MLR) requires that the amount spent by the insurance company in providing clinical services and for quality improvement, should be proportionate to the premiums paid by the policy holder. Otherwise, if the insurance company’s revenue spending did not meet the standards of the MLR, their policy holders will be entitled to receive reimbursements. These reimbursements will be established and ordered by the National Association of Insurance Commissioners.
Mandatory Inclusions in Affordable Health Care Plans
Except for grandfathered-plans (those that already existed in March 23, 2010) or employer-sponsored plans, the following provisions are mandatory inclusions in all individual health care coverage:
• Ambulatory patient services;
• Emergency services;
• Hospitalization, maternity and newborn care;
• Rehabilitation and habilitation services, including treatments for behavioral disorders, for sufferers of mental health disorders or users of prohibited substances. This includes prescription drugs and devices necessary for the patients’ way to wellness and recovery.
• Preventive and wellness services;
• Laboratory services,
• Pediatric services including oral and vision care;
• Management of chronic diseases;
• The law, as represented by the Secretary of Health and Human Services, reserves the right to add essential benefits for the rehabilitation and habilitation services considered essential to persons with disabilities and to other diverse and underserved groups.. Examples of these services are: maintenance of muscle bulk and minimization of spasticity.
• Medical devices refer to durable medical equipment like wheelchairs, prosthetics, orthotics and its supplies.
• The amount of out-of-pocket expenses shared by policy holder should not be greater than the limits of an individuals’ health savings account.
For more information about the new laws governing affordable health care coverage for everyone, including guidelines for employers who wish to provide health care plans to their employees, details are available at the US Dept. of Health and Human Services’ – Regulations and Guidance page.
Reference Materials and Image Credit Section
- All images are courtesy of Wikimedia. Commons