If you've got an individual health insurance policy that was issued before March 23, 2010, it's probably time to shop for a new one. Because new provisions of the health care reform law could help you save hundreds on medical bills.
If you’ve been reading Money Talks News, you know how closely we’ve been following the federal government’s healthcare reforms. Last month, we spelled out all the major changes that went into effect on Sept. 23, A Big Day for Health Care Reform.
Major employers providing healthcare for their employees have Human Resources departments that hopefully are making sure they’re taking advantage of the new reforms. But according to the Department of Health and Human Services, there are 17 million people who pay for their own insurance in the individual health insurance market. If you’re one of them, it’s definitely time to give your policy a check-up.
Take a look at the following video, which includes support from diabetes specialist, Mudit Jain, MD. Then meet me on the other side for more.
Here’s another look at how things recently changed, this time with additional important details.
1. Children and pre-existing conditions
If you have children under the age of 19, your insurance company can no longer deny them coverage if they have a pre-existing medical condition such as asthma or diabetes. So if you’ve got a child in that category, this will help immensely – if you can find coverage at an affordable price. And this provision doesn’t apply to grandfathered plans in the individual (as opposed to employer-provided group) insurance: more on that in a minute.
2. Free preventative care
For any plan issued after September 23, preventive tests are free – no co-payment, co-insurance, or deductible. Examples of preventative care, from the healthcare.gov website:
- Blood pressure, diabetes, and cholesterol tests;
- Many cancer screenings, including mammograms and colonoscopies;
- Counseling on such topics as quitting smoking, losing weight, eating healthfully, treating depression, and reducing alcohol use;
- Routine vaccinations against diseases such as measles, polio, or meningitis;
- Flu and pneumonia shots;
- Counseling, screening, and vaccines to ensure healthy pregnancies;
- Regular well-baby and well-child visits, from birth to age 21.
This new provision applies to those in both job-related and individual health insurance policies created after March 23 – but not until the plan begins its first new “plan year” or “policy year” on or after September 23.
Important: Individual health insurance plans that went into effect before March 23 – the date President Obama signed these reforms into law – are largely “grandfathered” and don’t have to provide this benefit. In other words, policies that were already in effect when the law changed don’t have to offer free preventative care. And plans can remain grandfathered indefinitely, providing the insurance company doesn’t make major modifications that would either increase your out-of-pocket cost or reduce your benefits. So find out if your policy if grandfathered – if it is, and you want this benefit, your only option may be to cancel your existing coverage and get a new plan. Try our health insurance search tool here.
3. Lifetime and annual limits
High deductibles are one way to lower health insurance costs, but not the only way. Some individual plans offer lower premiums in exchange for low “lifetime limits.” A lifetime limit is, as the name implies, a limit on what the insurance company will pay over your lifetime. So if you become seriously ill and reach your limit, your plan stops paying. But as of September 23, lifetime limits are gone for all plans, beginning the next time the plan or policy is renewed.
In addition to lifetime limits, some policies also have annual caps – a maximum the policy will pay every year. Grandfathered individual plans that were in place prior to March 23 can continue with annual caps.
But for plans that are renewed or newly issued between September 23, 2010 and September 23, 2011, the minimum cap is $750,000 per year, per person. Annual caps increase every year until 2014, when they’re gone forever.
4. Keeping your coverage
On Sept. 23 unfair “rescissions” became illegal. “Rescission” is an innocuous word for a horrendous practice: Insurers that deny coverage after you get sick by citing a small mistake on your original application. For instance, as I mentioned in the video, if you did something as innocent as forgot to mention you had your wisdom teeth removed, your insurer could theoretically cancel your entire policy – including not paying medical bills you’ve already incurred.
The new rules still allow insurers to cancel your coverage if they can prove you made a “deliberate misrepresentation of material fact,” but the burden of proof is on them – and you get 30 days to appeal. This provision applies to every health plan, employer-sponsored and individual, but only plan years or policy years that begin on or after September 23.
Bottom line? Particularly for individual policy holders, it’s time for an insurance check-up. You need to find out if your current policy is grandfathered, when it renews and when your plan year begins. And if your plan is grandfathered and you’d like to take advantage of some of your new rights immediately, it may be time to go shopping – never a bad idea anyway. But if you do change, remember the cardinal rule when it comes to any kind of insurance: Never cancel any policy until you’re absolutely certain that your new policy is in force.
And if the rules regarding grandfathering seem confusing, here it is boiled down from heathcare.gov’s FAQ page:
Things that affect all plans, grandfathered and otherwise, for plan years beginning on or after September 23, 2010:
- No lifetime limits
- No rescissions of coverage when people get sick and have previously made an unintentional mistake on their application
- Extension of parents’ coverage to young adults under 26 years old
Additional things you’ll get by dropping a grandfathered plan and getting a plan issued after September 23:
- Free preventative services
- Patient protections such as guaranteed access to OB-GYNs without prior referral and the ability to name a pediatrician as your child’s primary care provider
Still confused? Here’s a simple, three-part prescription that will definitely make you feel better: First, learn more about changes in health insurance by checking out this page of healthcare.gov. Next, call your insurance provider and talk to them – definitely ask them if your plan has been grandfathered. Finally, if you have any other questions, call your state’s department of insurance. There’s a list of them here.