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When President Barack Obama signed the Affordable Health Care Act into law in 2010, it made it possible for people with preexisting conditions, such as cancer, diabetes, heart disease and a host of other chronic illnesses and conditions to obtain health insurance — and keep it — because insurers could no longer deny them coverage, or set premiums based on how healthy they are.
There were other immediate benefits, too. The law allowed parents to continue to cover their college-aged children on their health plans until he or she is 26.
In fact, before the AHCA was signed into law many health plans and issuers could, and did, remove young adults from their parents' policies because of their age, leaving many college graduates and others with no insurance.
College-aged young adults make up the highest rate of uninsured. Yet, one in six young adults have a chronic illness like cancer, diabetes or asthma.
About 30 percent of young adults are uninsured, representing more than one in five of the uninsured — higher than any other age group with a rate three times higher than the uninsured rate among children.
The law also removed lifetime caps on the amount of benefits a person could receive. Before the law, a child with a chronic illness could “use up” the amount of benefits any insurer would allow him or her during a lifetime before they reached adulthood. This would leave him or her uninsured for the remainder of their lives.
But the public policy was engineered to roll out in phases over several years, meaning some people might not realize tangible benefits right away.
One such benefit is stronger consumer protections written into state-based insurance exchanges. The exchanges are scheduled to go into effect in 2014 and will be set up to make it easier for individuals and small businesses to shop for health insurance.
A new analysis supported by the private foundation, The Commonwealth Fund, shows when the AHCA state exchange system is implemented, more than half of Americans with individual market health insurance plans will be able to get better coverage.
According to the analysis, compared with people enrolled in individual market plans, a majority of those enrolled in employer group plans have far more comprehensive coverage with less cost sharing.
“People who buy individual coverage often get low value for plans that do not offer essential benefits, such as maternity care," said lead author Jon Gabel, a senior fellow for the social science research organization NORC at the University of Chicago. “This study suggests that by the year 2014 these Americans will be able to buy much better plans that offer more financial protection.”
Gabel and his colleagues analyzed individual plans and employer-based group plans offered on the market in 2010 to see how they would stack up under these requirements.
The researchers based their findings on simulated bill-paying from a national sample of employer-based group plans and a five-state sample of individual plans. The five states sampled were California, Florida, Michigan, Pennsylvania and Utah.
The study found that 51 percent of Americans with individual insurance in 2010 had plans the authors classified as "tin," because they lacked essential benefits required by the law, such as coverage for behavioral health and maternity care, and exposed people to undue financial risk.
The Affordable Health Care Act will transform the individual insurance market significantly, the authors said, adding that the post-reform individual insurance market will look nothing like it does today.
In the past, insurance companies in the United States typically sold low-value policies that provided fewer benefits than group plans and often excluded very sick people. Under the Affordable Health Care Act, all insurance policies offered through the state exchanges and individual and small-group markets in 2014 will have to offer consumers plans with financial protections and essential benefits, the analysis says.
Under the Affordable Health Care Act, insurance plans sold through the exchange will have to meet certain basic standards. Non-grandfathered health plans in the individual and small-group markets — those that were not in existence when the Affordable Health Care Act was passed in 2010 — will also have to meet these requirements.
Insurance carriers selling in the exchanges and in the individual and small-group markets must provide consumers and businesses with a comprehensive package of health care services, known as essential health benefits.
Consumers can choose plans with the essential health benefits that vary by four distinct levels of cost-sharing: bronze, silver, gold, or platinum. Platinum plans cover on average 90 percent or more of health expenses, while bronze plans must cover a minimum of 60 percent.
More than half of the plans currently offered on the individual market are considered “tin” because they cover less than bronze plans or 60 percent of expenses. These plans wouldn't qualify for the exchanges, according to the analysis.
The Affordable Health Care Act also requires health plans offered in the exchanges and the individual and small-group markets to cap annual out-of-pocket expenses at $6,050 for individuals and $12,100 for a family.
Families with low and moderate incomes will qualify for even lower out-of-pocket spending caps.
Gabel and his colleagues found that most people enrolled in group plans had better coverage and were more likely to be protected from high out-of-pocket medical expenses than those with individual health insurance.
For example, the average household with an employer-based group health plan spent about $1,765 annually on out-of-pocket medical expenses, compared with $4,127 for those with individual coverage.
“This study shows that millions of Americans currently have coverage that does not accord them access to timely care and potentially leaves them exposed to catastrophic medical bills,” said Commonwealth Fund Vice President Sara Collins in a written statement. “The provisions of the Affordable Care Act will not only extend new coverage to millions of uninsured Americans, but vastly improve the coverage of many who are insured but poorly protected by their health plans.”
The full analysis “More Than Half Of Individual Health Plans Offer Coverage That Falls Short Of What Can Be Sold Through Exchanges As Of 2014” is published online in the journal Health Affairs
For more information on health care reforms, visit the Affordable Health Care Act website at http://www.healthcare.gov/law/index.html/
Lynette Summerill is an award-winning writer and Scuba enthusiast living in San Diego, CA with her husband and two beach loving dogs. In addition to writing about cancer-related issues for EmpowHER, her work has been seen in newspapers and magazines around the world.
Sources:
“Half of Americans with individual health plans could gain better coverage under the ACA” Media Release. Mary Mahon. The Commonwealth Fund. 23 May, 2012. Accessed at
http://www.eurekalert.org/pub_releases/2012-05/cf-hoa052212.php
U.S. Department of Labor Fact Sheet. Young Adults and the Affordable Care Act: Protecting Young Adults and Eliminating Burdens on Families and Businesses. Accessed May 27, 2012 at: http://www.dol.gov/ebsa/newsroom/fsdependentcoverage.html
Reviewed May 29, 2012
by Michele Blacksberg RN
Edited by Jody Smith
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