10 Things Health Plans Can and Can’t Do in 2014

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This post comes from Barbara Marquand at partner site Insure.com.

Some of health care reform’s biggest changes go into effect next year.

Here’s a look at what health plans generally can and can’t do starting Jan. 1, 2014, under the federal Patient Protection and Affordable Care Act.

1. Can’t deny coverage for pre-existing conditions

If you have a serious health condition or illness and have tried to purchase health insurance on your own, you know how hard it is find an affordable health plan or qualify for coverage, period. But in 2014, health insurance companies won’t be able to deny your application for coverage or charge higher premiums based on your health.

So even if you’re pregnant or have diabetes, you’ll qualify at the same rates as you would if you didn’t have those conditions.

2. Can consider age when setting premiums

Health insurers will be able to charge higher premiums for older people than for younger people, but not by more than a 3-to-1 ratio. That means a health plan could charge a 64-year-old up to three times what it would charge a 22-year-old for the same policy.

3. Can make smokers pay higher premiums

Health insurers will be able to charge smokers 1.5 times more than nonsmokers for the same health plan. However, a computer glitch may delay the full penalty for older smokers for a year.

4. Can charge more based on where you live

Health insurance rates will still vary by region, so where you live will impact how much you pay for coverage.

5. Can’t charge more for women

In states that allowed the practice, 92 percent of the best-selling individual health plans based premiums partly on gender, according to a 2012 report by the National Women’s Law Center. As a result women paid $1 billion a year more for individual health coverage than men. Even when maternity coverage was excluded, almost one-third of plans analyzed by the center charged 25- to 40-year-old women at least 30 percent more than men for the same coverage. In 2014, health insurance companies can’t base premiums on gender.

6. Can’t limit coverage for clinical trials

Health plans will not be allowed to drop or limit coverage if you decide to participate in a clinical trial.

7. Can’t put a dollar limit on annual benefits

The Affordable Care Act prohibited health plans issued or renewed after Sept. 23, 2010, from putting lifetime limits on most benefits, and it began phasing out annual dollar limits on job-based plans and new individual health plans. Starting in 2014, no annual limits will be allowed on most benefits.

8. Can’t make you wait for too long

When you start a new job, group health plans will not be able to make you wait more than 90 days to enroll.

9. Can’t skimp on essential benefits

Before health care reform, health plans varied widely in what they covered. Starting in 2014, individual and small-group health plans must provide coverage for 10 categories of “essential benefits”:

  1. Maternity care.
  2. Rehabilitative and habilitative services.
  3. Pediatric services.
  4. Mental and behavioral health treatment.
  5. Preventive and wellness services (many preventive services must be provided without charging you a deductible, copayment or coinsurance).
  6. Hospitalization.
  7. Laboratory services.
  8. Prescription drugs.
  9. Ambulatory patient services.
  10. Emergency services.

10. Can’t make you pay too much out-of-pocket

Individual and group health plans will be limited in how much they can make you share health care costs. Small-group health plans won’t be able to charge deductibles higher than $2,000 for an individual and $4,000 for a family.

Individual and large-group plans will be under the same cost-sharing limits as those established for high-deductible plans that qualify for health savings accounts. The limits are indexed each year for inflation. In 2013, out-of-pocket limits are $6,250 for single coverage and $12,500 for a family. They will be slightly higher in 2014. Out-of-pocket costs include the deductible, copayments and coinsurance (the percentage of medical bills you owe after you pay the deductible).

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