Significant changes can be expected for many Americans in terms of the "Essential Health Benefits" plans.
Significant changes can be expected for many Americans in terms of the "Essential Health Benefits" plans that will be offered when states begin implementing the public health care exchanges mandated by the Patient Protection and Affordable Care Act (PPACA) in less than one year.
These changes are in addition to the benefit plan adjustments that already went into effect for new and existing insurance policies over the past year. Changes that already have been made include limits on pre-existing conditions, raising the cap on lifetime limits for essential benefits, limitations on when coverage can be rescinded, the age extension on coverage eligibility for children up to age 26 and coverage for preventive care - among other reforms.
As agents, we are vigilant and track the impending mandates that will take effect. The good news is that there will be opportunities to standardize health care benefit offerings, but the bad news is that the PPACA-mandated changes will increase premium costs exponentially for many and disrupt existing insurance markets.
Effective January 1, 2014, a health benefit plan offered through a state exchange will have to provide an Essential Health Benefits Package with limited cost sharing. (Section 1302 of PPACA):
(A) Ambulatory patient services.
(B) Emergency services.
(D) Maternity and newborn care.
(E) Mental health and substance use disorder services, including behavioral health treatment.
(F) Prescription drugs.
(G) Rehabilitative and habilitative services and devices.
(H) Laboratory services.
(I) Preventive and Wellness services and Chronic Disease Management.
(J) Pediatric services, including oral and vision care.
The cost-sharing under a health plan may not exceed the cost-sharing for high deductible health plans in 2014 (currently $5,950 individual/$11,900 family). In following years, the limitation on cost-sharing is indexed to the rate or average premium growth.
Deductibles for plans in the small group market are limited to $2,000 individual/$4,000 family, indexed to average premium growth. This amount may be increased by the maximum amount of reimbursement available to an employee under a flexible spending arrangement.
Levels of Coverage - PPACA defines specific levels of coverage to be offered by the state exchanges. A plan shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to a stated percent of the full actuarial value of the benefits provided under the benefit plan. They are:
- BRONZE LEVEL- 60 percent
- SILVER LEVEL- 70 percent
- GOLD LEVEL- 80 percent
- PLATINUM LEVEL- 90 percent
While January 1, 2014 appears to be relatively distant, it is too soon to know if you can keep your current health insurance plan. As citizens, we were promised, "If you like your plan, you can keep it." by President Obama during his campaign to pass the PPACA bill. Now it is unclear if that will be true. Perhaps, if the President's quote was "If you like your plan, too bad.", this bill would have never passed. The government fears adverse selection where healthy people quickly gravitate towards affordable medically underwritten plans in 2014 and stay on that plan post 2014. So, the peace of mind I'd like to offer, that you can stay on your current plan, won't be available until later this year. The answer may be quietly published amoungst the thousands of pages of regulations being rolled out monthly.
Creative solutions are emerging to keep benefits affordable. Tell your uninsured friends and family to contact me for personal recommendations. Once medical underwriting goes away, rates will forever be higher. Grandfathered group plans are still available. As agents, we are committed to you, our valued clients, to offer solutions. If you have any questions, please contact me and I will be happy to assist you. Thank you for taking the time to read through this important notification.