Q: Does the ACA impact me?
A: The simple answer is yes. It will affect almost everyone in some manner. However, there is really very little impact on those who are 65 and older who have Medicare coverage and a Medicare Supplement policy. Those covered under group plans through their employer should visit with their employer on what changes are in store. The bulk of changes come from those purchasing individual coverage and that is what we will discuss today.
Q: What has already happened with the implementation of the law?
A: There are a number of items that have been implemented as part of the law already. These have all been implemented over the last few years.
- Young adults are able to remain on their parents’ health insurance plan up to age 26.
- Lifetime limits on benefits have been eliminated.
- Many preventive services are now 100 percent covered.
- Insurers can no longer deny coverage to children because of pre-existing health conditions.
- Insurance companies are required to spend a minimum percentage of their premiums on health costs.
You may or may not have noticed these changes, depending on how you were affected. Many people have paid little attention to these changes as they have all been very consumer-friendly and did not add a lot of cost to the insurance plans.
Q: What is the impact of all of these changes?
A: There are significant changes coming in the marketplace. The biggest changes you will need to prepare for are:
- You are most likely going to have to select a new health insurance policy. Whether you are on an individual or group plan, there is a good chance you are going to have to select a new policy that is compliant with the law. Your agent or employer will help you with this transition.
- It is going to cost more. There are several new fees and taxes in the new law which will raise costs. In addition, the fact that insurance companies can no longer underwrite based on a person’s risk profile means the price of coverage overall is going to go up – in some cases dramatically. Some people may actually find the new plans to be less expensive, but the majority of people will pay more for these plans – in some cases, much more – offset for some by the premium subsidy that is available.
Q: What is coming as we move toward 2014?
A: January 1, 2014, is the implementation date of many, if not most, of the major provisions of the Affordable Care Act. Below is a list of some of the major things being implemented in the coming months:
- All legal citizens of the U.S. will be required to have health insurance or will be assessed a penalty or tax for lack of coverage.
- Insurance companies will be required to issue policies to any legal citizen that applies for coverage and will not be able to decline coverage or rate the coverage differently due to any existing health conditions.
- Medicaid may be expanded greatly to increase the number of people covered. This expansion is subject to each state’s approval and, at this point, the Nebraska Legislature has said it’s off the table for 2013.
- There will be premium credits and subsidies available for coverage for a majority of Nebraskans. These subsidies will be available based on income status as well as the cost of the plans available in the market. At a high level, those that earn between 100-400 percent of the federal poverty level may qualify for subsidies. There are other qualification standards in place as well.
- All benefit plans will cover certain benefits. Each plan will cover 10 categories of what are called “essential health benefits.” These may be covered at different levels depending on the plan you buy, but all services will be covered at some level. These include: Ambulatory Patient Services, Emergency Services, Hospitalization, Maternity and Newborn Care, Mental Health and Substance Abuse, Prescription Drugs, Rehabilitative and Habilitative Care, Lab Services, Preventive and Wellness Services and Pediatric Services including Dental and Vision.
- All plans will be classified according to what are called metallic tiers. Those tiers are based on how much of the average costs of medical care the plan will cover versus the amount the member will pay.
- All risk pools for an insurer will be combined in the individual and small group market. There will no longer be several different “pools” of business – meaning pricing will be consistent across these pools.
- Insurance companies can only vary premiums based on age, family size, geographical location and tobacco use. Within the age and tobacco use categories, there are limits on how much they can differentiate.
- There are several new fees and taxes that will be included in health insurance premiums going forward from Jan. 1, 2014. Combined, these taxes are expected to add about 5-7 percent to the cost of the average premium. These include: Transitional Reinsurance Fee, Health Insurer Tax, Patient Centered Outcomes Research Fee and Exchange User Fee.
- There will be new health insurance exchanges, or Marketplaces, which are designed to be a place for consumers to compare various plans. They are a centralized place (typically a website or 800 number) where consumers can apply for advanced premium tax credits and choose coverage. They are also where consumers who qualify for subsidies under the new law must go if they want those subsidies verified and immediately applied to the monthly premium for the plan chosen.
Q: What is the importance of the Oct. 1 date?
A: Oct. 1 is the first date of the Annual Election Period (AEP). The AEP is a period of time when you can purchase the new ACA compliant policies. The AEP this year runs from Oct. 1 through March 31, 2014. If you enroll between Oct. 1, 2013 and Dec. 23, 2013, you will have a Jan. 1, 2014, effective date. If you enroll later than that, your effective date will be later. In 2014, the AEP is scheduled to run from Nov. 15 - Jan. 15. During this time, the insurance company must accept your application for coverage and there is no underwriting and no exclusions or denials because of health condition.
Q: Is that the only time I can buy health insurance?
A: It is not the only time you can buy, but it is the only time you can buy without a qualifying life event. A qualifying life event can make you eligible for a Special Enrollment Period (SEP). Examples of a qualifying life event include:
- Loss of coverage through your employer group or other group plan;
- Moving to a new state;
- Certain changes in your income;
- Changes in family size (marriage, divorce, birth of a child).
The only two enrollment options to buy individual health insurance are during the AEP or during an SEP which occurs because of a qualifying life event.
Q: What options do I have?
A: If you purchased a Blue Cross Blue Shield of Nebraska (BCBSNE) policy through your Farm Bureau agent, you have some options to consider. You have previously received a renewal package from BCBSNE. In that mailing you learned that you can no longer keep your current plan design and must move to a new ACA compliant plan. BCBSNE had mapped you into one of the new plans, and that plan was scheduled to take effect Jan. 1, 2014. Since that time, based on a presidential proclamation and a decision by the Nebraska Department of Insurance to allow a one year extension on existing plans, BCBSNE has elected to provide you an option to retain your current plan for one additional year. Thus, you now have a couple of options. Those include:
- Moving to a new ACA compliant plan on Jan. 1. This may be a great option for you if you have had difficulty purchasing or changing your health insurance previously because of existing health conditions. This could be the plan you were mapped in to. That plan would start Jan. 1, 2014. You could also move to a different ACA compliant plan and that coverage would also begin on Jan. 1, 2014.
- Staying on your current plan. This is a new option and allows you to stay on the plan you are on for one more year. This option may be better for those that don’t want to move to the new plans, are healthy, are recent enrollees or have relatively lower priced policies.
If you have questions, your Farm Bureau agent can help.
If you do nothing you will be automatically moved to the mapped plan on Jan. 1, 2014.
Q: What Should I Be Doing to Prepare?
1. Make an appointment to see your Farm Bureau agent. They are trained to help and be familiar with the new law and can help answer some of the questions you may have.
2. Make a list of things that are important to you in selecting your health plan – choice of doctor, cost of plan, amount of deductible, does it cover me while traveling, etc.
3. Know your budget. There will be numerous health coverage options, and breaking them down by cost can help narrow your choices.
4. Find out from your employer whether they plan to offer health insurance, especially if you work for a small business.
5. Explore current options. You may be able to get help with insurance now, through existing programs or changes that are in effect already from the new health care law.