September 23 was a long-awaited date for supporters of changes in the nation’s health insurance law whose passage was led by President Obama. On that date, several key measures dealing with prevention and coverage for young adults and children with pre-existing conditions went into effect
First Lady Michelle Obama spoke to thousands of the nation’s nurses by telephone, thanking them for their service and encouraging them to spread the word to patients about what is covered in the Affordable Care Act.
“Many preventive services are now covered at no out-of-pocket costs. Things like mammograms, cervical screenings, colonoscopies, childhood immunizations, prenatal and new baby care, high blood pressure treatment – all of these are included in new insurance plans with no deductible, no co-pay,” Mrs. Obama explained.
“These steps are crucial because they can help combat preventable conditions that can have serious health consequences later in life.”
However, a key word is “new.” Several of the act’s provisions apply only to new group health insurance plans.
Young adults and children
Young adults between the ages of 18 and 26 who are uninsured can now get back on their parents’ health plan, regardless of where they live, whether they are in college, claimed on their parent’s taxes, working, married or have their own children (the benefit does not extend to their spouses and children, however).
“While this is a very progressive definition of a dependent, if they work in a place that offers insurance they cannot be claimed by their parents on their parent’s insurance, regardless of how expensive that insurance is,” said Thomas McAuliffe, policy analyst for the Missouri Foundation for Health.
“That is, until 2014. In 2014, that provision drops away.”
The Affordable Care Act also prohibits insurance companies from kicking children with pre-existing conditions out of its health plans.
“Children with preexisting conditions cannot be denied coverage in new plans, and it’s really important to make the distinction,” McAuliffe said.
“There are going to be children who are covered on their parent’s plans and they could be exempted for insurance on the basis of a preexisting condition, but for the most part, all new plans will not be able to exempt children.”
McAuliffe also points out an age gap for children with preexisting conditions.
“The law says that insurers are prohibited from excluding preexisting medical condition for children under the age of 19 – not to the age of 26” McAuliffe said.
“If you are between the age of 19 and 26, insurance reform doesn’t do much for you on the basis of a preexisting condition.”
After the law was passed, some insurance companies stopped coverage for children in policies or raised its rates.
“Children tend to be, on the whole, fairly healthy, and they don’t cost a great deal [to insure], and to say that children are going to cost that much – it’s really unfair,” McAuliffe said.
Co-pays and tax credits
Co-pays and out-of-pocket costs excluded under the Affordable Care Act are grandfathered into existing plans for the next four years.
“That’s for new plans,” McAuliffe explained. “For people who get their insurance through their employers, they can still be charged co-pays, but in 2014, all co-pays go away.”
Tax credits to help employees pay for health insurance are now in effect for businesses.
Medicare beneficiaries with high prescription drug costs who fall into the donut hole coverage gap between what the plan pays and out-of-pocket expenses are receiving a one-time $250 check to help pay for their medication. Next year, seniors who reach the donut hole will get a 50 percent discount on brand-name drugs.
McAuliffe also pointed out that annual lifetime limits or spending caps are now for the most part prohibited, and provision that require Medicare to become more effective and efficient “kick in over the next five or six years.”
Other provisions will roll out incrementally over the next four years. One next year will require insurance companies to prove they spend 80 percent of their income for direct health care.
Military exceptions
Unfortunately, extended dependent coverage up to age 26 in the Affordable Care Act does not apply to adult children of military service members.
Those who gambled to keep the Defense Department’s TRICARE health coverage out of the health reform debate for fear of losing existing benefits lost out on an important benefit now afforded to other young adults covered under civilian policies.
In addition, a separate law, the TRICARE Affirmation Act, grandfathered TRICARE’s coverage as the minimal essential coverage under the Affordable Care Act.
Currently, TRICARE allows adult children enrolled in school to stay on its plan until age 23.
“Now that health care has come around and some of the provisions are more generous than TRICARE, all of a sudden there is an effort to amend TRICARE,” McAuliffe said. “The problem is that requires specific legislative action.”
There are provisions pending in versions of the National Defense Authorization Act for fiscal Year 2011 that would extend health coverage to age 26. In 2014, these individuals will be able to go to the exchange to purchase health insurance.
Health insurance reform provisions in effect
• Insurance companies cannot deny coverage to children with pre-existing conditions
• Insurance companies cannot cancel policies when you get sick without proving fraud
• Young adults can remain on parent’s policies (except TRICARE, and stand alone, private retiree plans) until age 26 (employers are required to provide notice of a special enrollment period) if they don’t have coverage on the job
• New health plans cannot charge co-pays or deductibles for preventive care
• No annual limits in new plans; lifetime limits are banned
• New health plans provide cost free-preventive services
• New health plans are required to let insured select a primary care doctor or pediatrician from its network and let them see an OB-GYN without a referral
• New health plans, prior approval is no longer needed to use the nearest emergency room, and they can’t required higher co-payments or co-insurance for out-of-network ER services
• In new health plans, persons have the right to appeal any denial of payment claims by insurance companies – including an external appeal to an independent reviewer