Includes coverage expansion and restricts insurers' ability to reject kids with pre-existing medical conditions
Health care reform hits another milestone next month, with new provisions that include a coverage expansion for young adults and restrictions on an insurer’s ability to impose annual coverage limits or to reject children with pre-existing medical conditions.
Insurance coverage that starts on or after Sept. 23 will have to comply with these changes and others that were put in place when President Barack Obama signed the health overhaul into law March 23. For most people, the changes won’t affect their plans until coverage renews in the weeks or months that follow. Here are the highlights:
– Adult children up to age 26 will be able to receive dependent coverage with all individual and group policies.
– Lifetime limits on the dollar value of insurance coverage will be prohibited. This refers to how much your insurance coverage pays out to cover claims.
– Restrictions will be placed on annual limits for coverage, a practice that will prohibited in 2014.
– Insurers will be prohibited from rescinding or canceling coverage except in cases where the customer commits fraud.
– Insurers will not be able to exclude children from coverage because of a pre-existing condition, but they can require parents to sign up kids only during a fixed annual enrollment period to ensure they don’t wait until a child gets sick to buy coverage.
– Insurers will be required to provide preventive care like immunizations or mammograms without charging co-pays or other forms of cost sharing. Some may not have to comply with this element if their coverage existed March 23 and has not changed substantially.
Individual plans that have so-called “grandfathered status” like this also will not have to immediately follow the new restrictions on annual coverage limits or eliminate their lifetime caps. Over time, most plans will lose their grandfathered status as they make changes in benefit designs, said Jennifer Tolbert, a health policy analyst with the Kaiser Family Foundation.
Tolbert said these early provisions of the new law focus in part on consumer protections.
“It’s basically improving the quality of coverage that people have,” she said.
However, insurers and benefits analysts have cautioned that these restrictions and coverage expansions will raise the cost of insurance for some customers.
Several provisions of the complex law started unfolding in the weeks after President Obama signed it. For instance, people with Medicare prescription drug coverage are receiving $250 rebates once they reach a gap in their coverage known as the “doughnut hole.”
Enrollment has started in some states for temporary insurance that will cover people with pre-existing medical conditions who have been uninsured for at least six months. Some small businesses that offer employee health coverage can seek tax credits that will apply for this year.
The law will continue to develop over the next several years. In 2011, insurers will be required to offer rebates if they don’t spend a minimum percentage of their premiums on medical costs. Details of that provision are still being worked out.
Some of the biggest reform provisions start in 2014.
By then, Medicaid will be expanded to reach more people. Most citizens and legal residents will be required to have health care coverage, and many will receive help from the government through income-based tax credits when they shop for coverage on health insurance exchanges.
Associated Press Writer Ricardo Alonso-Zaldivar in Washington contributed to this report.
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