Helpful FAQs compiled by the experts at Commerce to help consumers understand what federal health care reform means for them.
The health insurance reforms adopted as part of the Patient Protection and Affordable Care Act (PPACA), and the subsequent reconciliation bill, are phased-in over 5 years. Most provisions will not take effect until January 1, 2014. However, there are some new protections that have already been implemented:
In addition, subsidized coverage for people with pre-existing conditions that cannot find coverage in the private market is now available in every state through January 1, 2014.
Information on when individual provisions of the PPACA become effective is available on our web site:
The key goal of the health care reform law is to ensure that nobody can be denied coverage or be priced out of coverage due to a health problem. If you allow people to wait until they have a health problem to purchase insurance, the health insurance market simply will not work. There would be a small number of very expensive choices for everyone. So, the law requires that everyone have minimum coverage, creating a larger pool of both sick and healthy individuals.
The health reform law requires that insurers and employers that provide dependent coverage to children make that coverage available to adult children of enrollees up to their 26th birthday. This requirement became effective for “plan years” beginning September 23, 2010, so parents will be able to enroll a child in group coverage during the next open enrollment period. Children can be added to an individual policy when it is renewed.
Of course, adding an adult child to the plan will likely increase your premiums. If the child is 19 or older, the insurer may exclude coverage of pre-existing conditions for a period of time, as allowed by existing state and federal law, until the prohibition on preexisting condition exclusions takes effect on Januar 1, 2014.
Exchanges are the central mechanisms created by the health reform bill to help individuals and small businesses purchase health insurance coverage. Beginning in 2014, an Exchange will be established in each state to help consumers make valid comparisons between plans that are certified to have met benchmarks for quality and affordability. The Exchanges will also administer the new health insurance subsidies and facilitate enrollment in private health insurance, Medicaid and the Children's Health Insurance Program (CHIP). Nobody will be required to purchase health insurance through the Exchange, though subsidies will only be available for plans sold through the Exchange. If you would rather buy your insurance through an insurance agent or broker, you will be free to do so. If not, you will be able to purchase insurance in a matter of minutes on the Exchange's Web site.
Beginning in 2014, single adults earning between $10,830 and $14,400 will be able to choose whether to enroll in Medicaid or to purchase coverage through the Exchange with a generous federal subsidy. Those earning less than $10,830 will be eligible for their state's Medicaid program, but not for subsidies in the Exchange.
Low- and moderate-income individuals and families whose employers do not subsidize health insurance coverage will be eligible for subsidies that enable them to purchase coverage through the Exchange in their state. The amount of these subsidies, which will reduce premiums and out-of-pocket costs for deductibles, co-payments and coinsurance, will depend upon the size of your family and your household income.
If your insurance company "rescinds," or retroactively cancels, your health insurance coverage, it will be required, in plan years beginning Sept. 23, 2010, to provide advance notice of its intention to do so, and may only do so if you committed fraud or made an intentional misrepresentation of an important fact on your application. If your insurer notifies you that it wants to rescind your policy, and you have not done either of these things, request more information from the company. If you are not satisfied with their explanation, immediately contact the Minnesota Department of Commerce Consumer Protection & Education Division through email or call 651-539-1600 or 800-657-3601 (outside Twin Cities area). If you prefer, you may file a complaint online, at https://eapps.naic.org/cis/fileComplaintMap.do.
Every plan sold or renewed in the individual and small group market after January 1, 2014, must include all the benefits in a “benchmark” plan – a plan chosen for the state based on coverage currently available in the state – and will cover services in the following categories:
• Ambulatory patient services
• Emergency services
• Maternity and newborn care
• Mental health and substance abuse disorder services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care
Yes, nothing in the legislation would infringe upon the ability of an individual to contribute to a Health Savings Account (HSA), or discourage an individual from doing so. The minimum level of coverage required to meet the individual mandate was specifically designed to allow for the purchase of a qualified high deductible plan that would complement the HSA.
Unfortunately, the grim fact is that health care spending is likely to continue rising faster than general inflation well into the future, resulting in higher premiums. While some individuals and families with health problems may see their premiums decrease significantly under the new rating rules, for most Americans premiums will continue to increase from year to year. However, the new regulations are designed to prevent unreasonable and unexpected spikes in premiums and, over time, to slow the growth in health care spending.
All plans sold or renewed in 2014, must limit the out-of-pocket exposure of consumers to approximately $6,000 for individual and $12,000 for families. These limits will be indexed to average premium growth in future years. In addition, the deductible for plans in the small group market will be limited to $2,000 for individuals and $4,000 for families in 2014, also indexed to average premium growth in future years.
Also, all plans must design their cost-sharing (deductibles, copays, coinsurance) to fit into specific levels of coverage. The levels of coverage are defined as follows:
• Bronze Level – The plan must cover 60% of expected costs for the average individual
• Silver Level – The plan must cover 70% of expected costs for the average individual
• Gold Level – The plan must cover 80% of expected costs for the average individual
• Platinum Level – The plan must cover 90% of expected costs for the average individual
MNsure, the new health insurance marketplace groups coverage by these “metal” levels, allowing consumers to easily compare comparable options.
Subsidized coverage is now available in every state to individuals with pre-existing conditions who have been uninsured for at least six months through the Preexisting Condition Insurance Program. MNsure, the new health insurance marketplace, provides coverage that immediately covers preexisting conditions at premiums that are capped at the average cost of private coverage in your Minnesota's individual market.
Beginning January 1, 2014, insurers will be prohibited from discriminating against individuals with pre-existing conditions in offering or pricing health insurance policies. In addition, for those with qualifying incomes, financial assistance will be available to reduce premiums and cost-sharing for plans purchased through MNsure.