ACA compliant vs. non-compliant

The Affordable Care Act (ACA) was designed to make the public responsible for their own health insurance decisions. The ACA also regulated what all individual policies have to cover. (Remember, employer plans may be different.) All ACA-compliant individual insurance plans must cover the ten essential benefits. They are:

1. Ambulatory patient services (outpatient care like going to your local doctor)
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance use disorder services
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventative and wellness services and chronic disease management
10. Pediatric services

The level to which these items are covered can be found on your summary of benefits. Knowing how to read your summary of benefits is also a part of the education process the government is hoping will happen.

Non-compliant plans will not include maternity, preventative or mental health service and usually will require either a health exam or health questions on the application. If you are asked any health questions when applying, IT IS NOT COMPLIANT. Non-compliant plans may also exclude certain conditions or not cover any pre-existing conditions.

Starting in 2019, there will no longer be a government penalty for having a non-compliant health insurance plan. The most popular non-compliant options currently in our area are plans from Tennessee Farm Bureau, faith-based sharing plans (such as Medi-Share) and short-term medical plans intended to cover gaps in coverage.

With this easing of the penalty for non-compliant plans, I believe we will see more non-compliant plans pop up. In this case, "Buyer Beware" applies. Be sure you know exactly what you are buying. What does it cover and what doesn't it cover? A good question to ask would still be "Is this plan ACA compliant?" If it is not, ask "Why not?"

I hope this helps and, as always, if you have questions call or email me.

Day 11: Today's Important Thing to know about Health Care Reform

Today’s important thing to know is about premiums on the new ACA-compatible plans.  In previous videos, we have already covered the rich benefits that will be covered by the Affordable Care Act policies.  Some of the benefits, such as maternity and dental for children, have been benefits that were added on at an extra charge if the policyholder needed them and were willing to pay for them.  Now, those benefits are included in everyone’s premium.  Another benefit driving up premiums is the MOOP that we discussed yesterday.  Putting a cap of what you as the policyholder potentially has to pay out of pocket increases what the insurance company will have to pay.  But probably the biggest premium driver is the elimination of the pre-existing condition clause.  More claims costs mean higher premiums for everyone.  Lastly, though younger people will see a sizeable increase in premiums, perhaps as much as 30%, older Americans will be paying the same or less.  Currently health insurance companies can charge as much as five times as much for coverage of a 60 year old as a 20 year old.  The ACA limits the upcharge for age at three times.  Of course, ACA only applies to people under 65.  Don’t think the insurance companies are going to be getting rich anytime soon though.  The Affordable Care Act also capped their overall profits at 20%.  Anything over that must be refunded to their policyholders.  If you have a question you would like for me to answer, send it to me as a comment or via the contact box and I will include it in an upcoming video.

Day 9: Today's Important Thing to know about Health Care Reform

Today’s thing to know is that the Affordable Care Act made it illegal to deny an individual health insurance based on health conditions.  That means that people with pre-existing health conditions such as diabetes, heart conditions, cancer, etc. cannot be turned down for coverage starting in 2014.  Applications for ACA-compliant health insurance policies will not include any health questions.  In the insurance world, we call this “guaranteed issue” since you cannot be denied coverage.  This provision of the Affordable Care Act will be a great benefit to many people.  Being denied due to pre-existing conditions has prevented many people from purchasing health insurance.  Getting the coverage that they need is definitely a positive.  Now, for the negative.  Covering folks with pre-existing conditions raises the dollars paid out in claims.  This will necessitate increases in insurance premiums to everyone.  Most hard hit will be younger individuals who will have to help share the burden of higher claims costs.  If you are young and make a decent income, you may want to purchase coverage prior to the implementation of ACA-compliant policies to take advantage of lower premiums.