This week, the U.S. Department of Health and Human Services issued a report reviewing health plans that will be offered in the 36 states, including Michigan, where the federal government is running or helping to run the online Health Insurance Marketplace.
As a central piece of the Affordable Care Act, the Health Insurance Marketplace has been designed to help uninsured Americans shop for insurance plans by providing plan details and prices, so that individuals can clearly understand their health care coverage options. In the Marketplace, health insurance plans will have to offer competitive prices to these new customers or risk losing out on potential new business.
Realistically, the Marketplace is a lot like Orbitz or Travelocity for buying health insurance; an individual shops online to find the best deal and take business to the most competitive company. On average, Michiganders will have 43 plans to choose from, broken into categories of bronze, silver, gold, and platinum, depending on the amount the insurance plan will cover (60, 70, 80, and 90 percent, respectively). The individual is responsible for the remainder through premiums, deductibles, and co-pays, which can also be lowered from federal subsidies for low-income individuals and families. According a federal analysis, monthly premiums for a family of four with an income of $50,000 could be as little as $80 with federal subsidies for the lowest cost bronze plan. That monthly premium would increase to an estimated $282 for the second lowest priced silver plan. For individuals, a 27-year-old with an income of $25,000 could pay as little as $89 per month for the lowest cost bronze plan after federal subsidies.
This competition for new customers not only results in health plans that are expected to cost significantly less than even previous projections by the Congressional Budget Office, but in order to standardize coverage options and bolster this competition even further, the ACA requires all health plans, on or off the Marketplace, to cover 10 essential health benefits starting January 1, 2014. This makes basic coverage under the ACA more comprehensive than many policies today that often times may not even cover maternity costs or prescription drugs. The Detroit Free Press has provided extensive coverage of the Affordable Care Act and recently published a quick guide to the essential health benefits. The 10 essential benefits include:
- Ambulatory patient services: These are the most typical health care services; for example, a visit to your doctor’s office.
- Emergency services: Trips to the emergency room must be covered without penalty, including ambulance transportation, if needed.
- Hospitalization: Hospital stays and surgeries must be covered; however, it is important to keep in mind your plan’s out-of-pocket limit, which if not yet reached, could require you to pay 20% or more of your bill.
- Maternity and newborn care: This includes prenatal care, delivery, and care for the mother, as well as postnatal care.
- Mental health and substance abuse services: All plans must cover both inpatient and outpatient care, including behavioral health treatment.
- Prescription drugs: Every category of federally approved drugs will have at least one drug that is required to be covered by every health plan – even high cost per dosage drugs.
- Rehabilitative and habilitative services & devices: Long-term disability patients will be relieved to know that 30 visits of rehabilitative services must be covered. This includes physical therapy, occupational therapy, and chiropractic services. Also included in every plan are 30 visits for both speech therapy and cardiac/pulmonary rehab.
- Laboratory services: All preventive screening tests must be provided for free, including breast cancer screening and prostate exams.
- Preventive and wellness services: The law requires all 50 preventive screenings recommended by the U.S. Preventive Task Force to be covered, including diabetes, HIV, depression, and blood pressure, among many others.
- Pediatric services: Children will be able to get appropriate dental and vision services, as the law requires teeth cleanings, x-rays, eye exams, and one pair of corrective lenses each year (glasses or contacts).
It goes without saying that the Affordable Care Act has changed the health care industry in very significant ways, and will continue to do so as implementation of major elements of the ACA begins on October 1st. No longer will insurance companies be allowed to deny coverage for pre-existing conditions or charge higher premiums to women, among many other provisions and requirements of the law. As consumers, it will be extremely important to do your homework and research the best options for you or your family to ensure the best coverage at a price you can afford. As the October 1 date draws near, this much is certain: the Health Insurance Marketplace will make rates more affordable through competition, and basic services are guaranteed to be covered.