Healthcare Reform: Insurance Industry Changes and How They Could Affect You - dummies

Healthcare Reform: Insurance Industry Changes and How They Could Affect You

Thanks to the new healthcare reform law, the insurance industry is undergoing a big transformation. The federal government is now requiring insurers to open the coverage gates, remove the benefit caps, and reduce cost-sharing amounts for policyholders.

You’ve probably already heard about some of the changes launched, and scheduled to launch:

  • Coverage for children regardless of a preexisting condition

  • Dependent care coverage for children younger than 26

  • Mandatory preventive care coverage for all new, private policies

  • Removal of annual and lifetime benefit limits

  • Elimination of policy cancellations unless you’ve lied to your insurance company

These insurance industry reforms are only the beginning. When mandated individual coverage takes effect in 2014, it will bring with it several additional changes to private health insurance that will likely affect your coverage in one way or another. Here’s how:

  • Limiting the waiting period for new coverage: The longest an insurance company will be able to make you wait before your policy becomes effective is 90 days.

  • Guaranteeing coverage and renewal: Health insurers won’t be able to deny you new coverage or renew your existing coverage because of your past or current medical conditions, genetic testing results, or history as a domestic violence victim.

  • Ending of long-standing rate rules: Insurers will no longer be able to base your premiums on your sex or salary. (Females are typically charged higher premiums than men. Also, in some cases, the more you make, the lower your premiums.)

    Insurers also won’t be able to charge you more because of your medical history or current health status, genetic information, or because you’ve been the victim of domestic violence.

    Insurers will still be able to take into account your age, geographic area, family composition (such as number of people), and tobacco use when deciding how much to charge you for your insurance coverage.

  • Reducing out-of-pocket costs for lower-income people: If your income is at or below 400 percent of the federal poverty level (the federal poverty level is $10,830 for an individual and $22,050 for a family of four), you’re going to see a reduction in the maximum amount of money you’ll have to pay out of pocket for healthcare coverage. Here’s the breakdown:

    • 100 to 200 percent FPL: $1,983 for an individual, $3,967 for a family

    • 200 to 300 percent FPL: $2,975 for an individual, $5,950 for a family

    • 300 to 400 percent FPL: $3,987 for an individual, $7,973 for a family

  • Limiting small group plan deductibles: If you’re an individual covered by a small group plan, your deductible will be capped at $2,000. The cap will be $4,000 for a family. These limits will take effect in 2014.

  • Mandating coverage for preventative services: If you plan to keep your current coverage for the foreseeable future, you’ll have to wait a while to take advantage of this benefit. All new private insurance plans must provide coverage for preventative services and immunizations without charging you a co-pay or deductible. However, all private plans won’t be required to provide you with this coverage until 2018.