How Health Care Reform Has Revolutionized Private Health Insurance
The Affordable Care Act has made significant changes to private insurance. The following is a brief outline of the five changes that have the greatest impact on your health insurance options and existing health plans:
You can now buy private health insurance through a Health Insurance Marketplace.
American citizens, and those legally present in the U.S., can now purchase private health insurance through either a state-run or federal Health Insurance Marketplace (also referred to as a Health Insurance Exchange). If your state did not set up its own Marketplace, such as North Carolina, you may access the Federal Marketplace online at HealthCare.gov. While you do not need to go through a Marketplace to purchase private health insurance, only those health plans that are purchased through a state-run Health Insurance Exchange or the federal Marketplace are eligible for subsidy assistance under The Affordable Care Act.
While you can view and purchase health plans online, there is still much to be gained from utilizing a traditional insurance agent, like the agents available at the WNC Health Insurance/The Asheville Blue Cross and Blue Shield of North Carolina® Store. Although the federal government has tried to streamline the online application process and make it as simple as possible, most people will still benefit from speaking to a person who knows all of the ins-and-outs of applying for Affordable Care Act insurance, and who can assist them in choosing a private health insurance plan.
All health plans must now offer the same ten minimum essential health benefits.
The Affordable Care Act Requires that all health plans (both on and off the Marketplace) provide coverage for ten minimum essential health benefits:
- Ambulatory patient services (outpatient care)
- Emergency services (trips to the emergency room)
- Hospitalization (inpatient care)
- Maternity and newborn care
- Mental health services and addiction treatment (inpatient and outpatient)
- Prescription drugs
- Rehabilitative services and devices
- Laboratory services
- Preventive services, wellness services, and chronic disease treatment
- Pediatric services
The Affordable Care Act also mandates that upper limits of coverage be removed and that pre-existing conditions be disregarded.
Health plans are now classified under metallic categories.
All insurers, like Blue Cross and Blue Shield of North Carolina®, must group their private health insurance plans into metallic categories based on the level of coverage offered: bronze, silver, gold or platinum. A catastrophic plan is also available in rare circumstances.
While The Affordable Care Act Requires that insurance plans all cover the same minimum essential health benefits, the scope of coverage offered under each benefit category can vary – the more comprehensive the coverage, the higher the cost of the plan.
- Bronze level plans are basic plans that pay for about 60% of covered medical expenses after the deductible is met.
- Silver level plans typically include co-pays for office visits and pay for about 70% of covered medical expenses after the deductible is met.
- Gold and Platinum level plans offer the most comprehensive coverage and pay for about 80% to 90% of covered medical expenses after the deductible is met. These plans typically do not have a deductible for covered prescription medications.
In addition to the level of coverage you select, you will also need to determine the type of deductible you are most comfortable with. Within each metallic category, you will usually be able to select from several plan options with different deductibles. A deductible is the amount of money you will have to pay out of pocket, in addition to your monthly premium payments, before your health insurance provider begins to pay for a portion of medical expenses. Health insurance plans with very low deductibles will have the highest premium payments, and those with the highest deductibles will have the lowest monthly premium payments.
Health insurers are now limited on how much they can charge you out-of-pocket.
Once your deductible is reached and your health insurer begins to pay for covered medical expenses, they will only cover the amount established in your selected health plan (i.e. 60%, 70%, 80% or 90%), and you will be responsible for the rest, until a set maximum out-of-pocket cost is reached.
Health Care Reform has put a cap on the maximum out-of-pocket expenses you may be required to pay for private health insurance before your insurer begins to pay for 100% of covered medical costs. In 2014, maximum out-of-pocket cost can be no more than $6,350 for an individual plan and $12,700 for a family plan. Payments for coinsurance, co pays and deductibles all count towards your out-of-pocket cap. Premium payments typically do not count as out-of-pocket expenses.
You can now only purchase or make changes to your health plan during a certain time period.
Health insurance can now only be purchased during a specified annual open enrollment period. This restriction applies to plans offered both on and off of the Health Insurance Marketplace. Each year, the federal government will announce when the annual open enrollment period will take place for enrolling, re-enrolling or making changes to existing health plans for the following year.
For coverage in 2015, annual open enrollment begins on November 15, 2014 and closes on February 15, 2015. Outside of this annual open enrollment period, only those who have experienced a qualifying life event may enroll in private health insurance or make changes to their health insurance plans.
Under The Affordable Care Act, anyone who is legally present in the U.S. must do one of three things: (1) maintain compliant health insurance coverage for themselves and their dependents (either privately or through their employer); (2) demonstrate an economic hardship or otherwise qualify for an exemption from the requirement to maintain health insurance coverage; or (3) make an individual shared responsibility payment (i.e. pay a penalty for not having health insurance).