ABC's of Health Care Reform and You

Benefits

Overall, the Affordable Care Act requires that insurance plans sold to individuals and small businesses must cover items and services in a minimum of 10 categories. These categories are: ambulatory services, hospitalization, maternity and newborn care, mental health and substance abuse, prescription drugs, preventive and wellness services, chronic disease management, rehabilitative services, laboratory services, and pediatric services. However, federal regulators recently shied away from prescribing defined, national standards for "essential health benefits" or covered treatments offered in insurance plans. Instead, regulators opted to give states more flexibility when it comes to defining "essential health benefits" or covered treatments. Regulators recognize the coverage that is appropriate for one state may not be appropriate for the majority of residents in another state. Florida, for example, is home to many more seniors than most other states. What states must do is direct insurers to develop insurance plans that cover treatments/diseases in the 10 minimum categories. The states have four choices from which insurance packages can be designed. State regulators can base their package on benefits offered by: one of the three largest state employee health plans (by enrollment); one of the three largest federal employee health plan options; the largest HMO offered in the state; or one of the three largest small-group plans in the state. This means that there can be restrictions on items/services covered, such as a limit on number of office visits. States that do not choose one of the four options for defining an "essential benefits package" will have one selected for them by federal regulators, who plan to use the benefits offered by the small-group plan with the largest enrollment in the state. States need to develop the "essential benefits package" as part of their work to establish State Health Insurance Exchanges – or online insurance marketplaces. These open in 2014.

On April 12, 2012, Governor Cuomo issued an executive order establising New York's health care insurance exchange. This puts the state on track to comply with the ACA and allows the state to apply for additional funding from the federal government, as the state moves forward with the exchange's structure. The exchange will operate under the Department of Health in consultation with the Department of Financial Services and other agencies. The order calls for the organization of regional advisory groups consisting of consumer advocates, health providers, insurers, and unions. The ACA requires any state that chooses to operate its own exchange to be ready to accept applications by October 1, 2013 and be fully operational by January 2014. (Update added 5/15/12)

Commercial health insurers must provide consumers with clear, consistent, and comparable summary information about their health plan benefits and coverage. The new forms will be available on or about September 23, 2012. Key feature is a standardized plan comparison tool called "coverage examples," similar to the Nutrition Facts label required for packaged food. (Update added 2/15/12)

All patient categories listed below benefit from the Affordable Care Act provisions noted above, as well as these additional provisions:

Uninsured

Most importantly, U.S. citizens and legal immigrants who are uninsured will become insured either through an insurance program provided by their employer, an insurance plan purchased in the State Health Insurance Exchange, or through a Basic Health Program offered outside of the Exchange. Low-income, non-Medicaid eligible individuals would be eligible for the Basic Health Program - a program negotiated by the states with a health insurance plan that agrees to provide a coverage program that meets "essential benefits" and a medical loss ratio of at least 85 percent. This ratio requires large insurers to spend at least 85 cents of every premium dollar on health services. For insurers covering the individual and small group market the ratio is 80 cents of every premium dollar. New York had medical loss ratio legislation in place before the Affordable Care Act provision kicked in.

Young Adults

As of September 2010, adult children can remain on their parent's insurance until age 26 (29 according to New York's law).
The State Health Insurance Exchange must offer a catastrophic coverage plan for individuals under the age of 30 for whom coverage is unaffordable.

Seniors/Disabled

Effective January 1, 2011, Medicare beneficiaries are entitled to an annual wellness visit and personalized prevention plan, that includes some screening tests, with no co-payment or deductible.
The "donut hole" (coverage gap) for prescription drugs will phase out by 2019.

Chronic Disease Sufferers

The Affordable Care Act contains millions of dollars to fund pilot programs in disease prevention and other public health activities geared toward reducing obesity, diabetes, high blood pressure, tobacco addiction, asthma, and other common, but high-cost chronic diseases and conditions. It encourages public and private partnerships and programs at all levels of government and industry to work together to achieve a healthier America.

Children

Children with pre-existing medical conditions cannot be excluded from obtaining health insurance.
The law provides grants for the establishment of school-based health centers.

Adults Under 65

Lifetime coverage limits no longer exist.
Annual coverage limits are eliminated by 2014.
The limitation on pre-existing medical conditions for all adults is eliminated by 2014.
Premium holders are entitled to rebates if commerical insurers fail to meet the medical loss ratio. This ratio requires large insurers to spend at least 85 cents of every premium dollar on health services. For insurers covering the individual and small group market the ratio is 80 cents of every premium dollar. New York had medical loss ratio legislation in place before the Affordable Care Act provision kicked in. In New York, $114.5 million was refunded to premium holders in 2011.
Regulatory approval is now required when insurers seek to raise premiums significantly. New York enacted prior approval authorization before the enactment of this provision in the Affordable Care Act.
High-risk pool for adults with pre-existing conditions, in New York known as the Bridge Plan, began in October 2010 and will remain in operation until 2014, when the State Insurance Exchange opens.
A reinsurance program to subsidize early retiree coverage became effective in July 2010. It is also temporary and will end in 2014. This helps employers and employees reduce premium costs.
Employers are required to provide a reasonable break time and location for nursing mothers to express milk for her nursing child up to a year following the birth of the child.
Nutrition information for food that is standard on a menu must be listed, including caloric content. Applies to food establishments/chains with 20 or more locations.
Federal government awarded low interest loans to launch consumer-governed health insurance plans in eight states. Non-profit, co-op plans will open for business in 2014 and are designed for the individual and small-group insurance markets. Plan in New York is Freelancers Health Service Corporation. More loan recipients will be announced in comiing months. (Update added 3/2/12)

Businesses

Federal grants for comprehensive workplace wellness programs are available to small businesses with less than 100 employees.
Businesses that pay part of the insurance premiums for their employees are entitled to rebates if commerical insurers exceed the medical loss ratio. This ratio requires large insurers to spend at least 85 cents of every premium dollar on health services. For insurers coverning the individual and small group market, the ratio is 80 cents of every premium dollar. New York had medical loss ratio legislation in place before the Affordable Care Act provision kicked in.
A reinsursance program to subsidize early retiree coverage became effective in July 2010. It is also temporary and will end in 2014. This helps employers and employees reduce premium costs.