Health Care Reform 101
The Affordable Care Act (ACA) includes many new terms and benefits that can lead to questions and confusion for those with and without insurance. To help you through the health care reform maze here is a list of health care reform related terms and details on how they may impact your health insurance coverage.
Annual and Lifetime Limits – Beginning in 2014, insurance carriers are not allowed to place annual or lifetime dollar limits on the essential health benefits.
Coverage for Dependents to age 26 – The ACA requires health plans to allow young adults up to their 26th birthday to remain on their parents' insurance policy, at the parents' choice.
Essential Health Benefits – A core set of benefits that must be covered by all individual and small group plans for beginning in 2014.
Guarantee Issue – Within specific enrollment periods, all health insurers must accept any individual that applies for coverage without regard to health status, use of services or pre-existing conditions.
Health Insurance Marketplace – The Marketplace is a Federal online resource to compare and purchase health insurance plans for individuals and small group employers. Enrollment begins October 1, 2013 with coverage effective as early as January 1, 2014.
Individual Mandate – Beginning in 2014 the vast majority of Americans are required to have insurance. Individuals who do not have a plan that qualifies as minimum essential coverage may have to pay a fee. People with very low incomes and others may be eligible for waivers.
Maximum Out of Pocket Costs – Out-of-pocket costs are your expenses for medical care that aren’t reimbursed by insurance and include deductibles, coinsurance, and copayments for covered services plus all costs for services that aren't covered. Beginning in 2014 the ACA requires that all plans adhere to out-of-pocket maximums on essential health benefits of $6,350 for self-only coverage and $12,700 for family coverage.
Medical Loss Ratio – Beginning in 2011 the ACA includes a provision that requires plans in the individual and small group market to spend not less than 80 percent (80%) of premiums on medical services. Plans in the large group market must spend no less than 85 percent (85%) on medical services. Insurers that don't meet these thresholds must provide rebates to policyholders.
Metal Tier – Plans are primarily separated into four levels – Bronze, Silver, Gold or Platinum – based on the percentage the plan pay of the average overall cost of providing essential health benefits to members.
Minimum Essential Coverage – The type of coverage an individual needs to have to meet the individual responsibility requirement under the Affordable Care Act. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage.
New Appeals Process – In 2010, new rules were established to ensure consumers in new plans have access to an effective internal and external appeals process to appeal decisions.
New Premium Rating Rules – You can’t be charged more because you’re sick or have a health condition. Also, women can’t be charged more than men.
Pre-existing conditions – For plan years beginning in 2014, a health plan may not refuse to cover certain services because of a health condition you had before you applied for coverage. The pre-existing condition limitation for children under 19 was eliminated in September 2010.
Preventive Services – Since 2010 preventive services have been covered with no co-payments, co-insurance or deductibles. Beginning in 2012, additional preventive services for women were also added without co-payments, co-insurance or deductibles.
Special Enrollment Period - A time outside of the open enrollment period which an individual/family has the right to sign up for or change health coverage and receive guaranteed coverage.
Summary of Benefits and Coverage – Beginning in 2012 insurance carriers have been required to provide consumers with a concise document outlining, in plain language, simple and consistent information about health plan benefits and coverage.