Health Care Reform and Consumer Impact: eHealthInsurance Answers FAQs on Program Availability and Eligibility
April 07, 2010 | Consumer Advice
Consumers Should Get Covered or Stay Covered
MOUNTAIN VIEW, CA, April 7, 2010 – With health reform now signed into law by the President, many Americans want to know when they can benefit from these reforms. Today, eHealth, Inc. (NASDAQ: EHTH), parent company of eHealthInsurance (http://www.ehealthinsurance.com), released a list of frequently asked questions from consumers who are seeking guidance on their health insurance decisions now that health care reform legislation has been signed into law.
“The most important thing Americans need to understand is that health care reform legislation is not a magic wand – it doesn’t change everything overnight,” said Gary Lauer, chairman and CEO of eHealth, Inc. “The Senate legislation was signed into law, but the rollout of these programs has barely begun. Some aspects of health reform go into effect immediately, but most of the major provisions don’t take effect until 2014. Over the next four years consumers need to get familiar with the new programs and how they’ll impact their health coverage; if you’re uninsured today, you shouldn’t wait any longer to find coverage. If you are insured, hold on to the coverage you have.”
As the leading online source of health insurance for individuals, families and small businesses, eHealthInsurance assists thousands of customers every month in getting quality health insurance. Licensed health insurance agents in eHealthInsurance’s customer care center are receiving calls from consumers who have questions about health care reform and its impact on their pending or existing non-group health coverage.
The following frequently asked questions are categorized by key areas of reform:
- Timeline of key reform programs and availability
- Eligibility for reform programs
- Pre-Existing Conditions
- Mandates or Requirements to Buy Health Coverage
- The Cost of Health Insurance
- Annual Benefit Caps
- Extension of Dependent Coverage for Young Adults
Timeline of key reform programs and availability
Question: Can I take advantage of the new health reform programs immediately?
Answer: Not all of them. Many reforms are not implemented until 6 months after the bill is signed into law. And many more major reforms will not be implemented until 2014. The following is a summary of reforms and how soon they will be available.
Within 90 days of enactment
- Small Business Tax Credits: For certain small businesses, tax credits of up to 35 percent of premiums.
- Access to the Federal High-Risk Pool for the Uninsured with Pre-existing Conditions: $5 billion for people who can’t qualify for insurance to buy insurance from the government (it’s not free).
- Re-insurance for Retiree Health Benefit Plans: establishes a temporary reinsurance program to provide reimbursement to participating employment-based plans for a portion of the cost of providing health insurance coverage to early retirees.
6 months after enactment
- Closing the Coverage Gap in the Medicare (Part D) Drug Benefit: Seniors will be entitled to receive a $250 rebate to cover the prescription drug “Donut Hole”.
- Health Insurance Consumer Information: A government web site where people can search for information about health insurance companies, available plans, etc.
- No Pre-existing Conditions Coverage Exclusions for Children: The law indicates that insurers will not be permitted to exclude pre-existing conditions from coverage. It has been reported that the Department of Health and Human Services intends to issue more detailed regulations regarding coverage for children and pre-existing conditions.
- Patient Protections: For all new plans. Protects patients’ choice of doctors by allowing plan members to pick any participating primary care provider, prohibiting insurers from requiring prior authorization before a woman sees an ob-gyn, and ensuring access to emergency care.
- Extension of Dependent Coverage for Young Adults: Young adults can stay on their parent’s insurance until age 26, even if they are not a full-time student. Applies to all new plans.
- “First Dollar” Prevention Benefits: All new health insurance policies must cover preventive care and pay a portion of all preventive care visits.
- No Lifetime Limits on Coverage: This eliminates any maximum dollar amount that a health insurance company agrees to pay on behalf of a member for covered services during the course of his or her lifetime.
- Restricted Annual Limits on Coverage: Eliminates any limits or maximum payouts from the health insurance company.
- Prohibits Rescission. Prohibits rescission when a claim is filed, except in the case of fraud or misrepresentation by the consumer.
- Appeals Process: When a consumer has a problem with their coverage, the insurance company must provide a process for customers to make an appeal.
- Ensuring Value for Premium Payments: The Federal government will audit insurance company revenues and require insurance companies to refund premiums to customers if the insurance company does not spend at least 80% of premium dollars on clinical services and wellness activities (individual and small group market). An insurance company is required to spend at least 85% of premium dollars on the same services for large group market plans. Applies to all plans, including grandfathered plans, but not to self-insured plans.
- Health Insurance Exchanges: States have up to four years to build exchanges where consumers can find, compare and buy health insurance plans, much like they can today at eHealthInsurance.com.
- Federal Subsidies for Health Insurance Coverage: People buying insurance on their own will get subsidies to help them pay their monthly insurance premiums. Premiums will be allocated on a sliding scale, which will be determined by income. Any individual earning over 400% of poverty ($43,320 in 2009) will not qualify for subsidies.
- Small Business Tax Credits: When Exchanges are operational, tax credits will be up to 50 percent of premiums.
- No Restrictions on Pre-Existing Conditions: Insurance companies are required to provide health insurance to any adult aged 19 – 64 who applies for coverage.
- Requirement to buy health insurance: To prevent people from waiting until they get sick to buy health insurance, all Americans will be required to buy health insurance or pay a fine. The fine starts at $95 for an individual in 2014 and goes up each year until 2016, when the fine will be the greater of either $695 or 2.5% of their annual income.
Eligibility For Reform Programs
Question: How do I know if I’m eligible for the health reform programs?
Answer: That depends on which programs you need access to.
- Pre-existing conditions: If you’ve applied for non-group health insurance coverage, and your application has been denied, you’ll need to hold on to your records and apply for the access to the $5 billion Federal high-risk pool, which will provide affordable coverage to uninsured Americans with pre-existing conditions.
These high-risk pools are scheduled to take effect 90 days after the bill is signed into law, and coverage under this program will continue until new Exchanges are operational in 2014.
- Subsidies: If you’re looking to access “Federal tax subsidies” to help you afford the cost of health coverage, those subsidies will not be available until 2014 when the new Exchanges are in operation.
If you earn less than 400% of Federal Poverty levels in 2014 (the 2009 equivalent is $43,320 for an individual and $88,200 for family) you would qualify for premium assistance – subsidies – to help you cover the cost of your premiums in 2014.
Question: Can I apply for insurance and get covered despite my pre-existing conditions?
Answer: There are some current and future options for you if you have pre-existing conditions.
- New High-Risk Pool: A provision in the reform legislation provides $5 billion of federal support for a new program to provide affordable coverage to uninsured Americans with pre-existing conditions through a new ‘high-risk pool.” The high-risk pools take effect 90 days after the bill is signed into law, and coverage under this program will continue until new Exchanges are operational in 2014.
However, just because the risk pools are supposed to take effect in 90 days, that does not mean you’ll necessarily be able to enroll in the risk pool right away. Depending on the volume of applications, it could take some time for the government to qualify applicants and get those who are eligible enrolled in the program.
- Existing state-high risk pools and other public programs: In addition to the New High-Risk Pool, there may also be a number of free or low-cost programs available in your area that you can take advantage of. To access these programs you can contact the Foundation for Health Coverage Education at www.CoverageForAll.org
- Non-group health insurance: Individuals should not assume that a pre-existing condition they have will make them ineligible for private insurance bought in the individual market. It’s a good idea to reach out to a licensed agent and discuss your medical background. You may be surprised at what you will qualify for. By 2014, the government will require health insurers to accept applicants regardless of pre-existing conditions.
There are also new consumer protections that will go into effect 6 months after the bill is enacted, including provisions that further restrict an insurance company’s ability to “rescind” your coverage and make preventive care mandatory in every plan sold.
Question: Regardless of pre-existing conditions, are all children going to be approved for coverage?
Six months after the bill is signed into law, health insurers will be prohibited from excluding coverage of pre-existing conditions for children.
The Department of Health and Human Services will be issuing regulations confirming that beginning in September 2010 , children with pre-existing conditions may not be denied access to their parents’ health insurance plan and insurance companies will no longer be allowed to insure a child, but exclude treatments for that child’s pre-existing condition.
Mandates or Requirements to Buy Health Coverage
Question: When is the deadline to get a policy before I am penalized?
Answer: The deadline will go into effect in 2014. There is a provision in the legislation called “Promoting Individual Responsibility,” which requires most individuals to obtain acceptable health insurance coverage. The penalty for not having health insurance will be $95 for 2014, $325 for 2015, and $695 for 2016 (or, up to two and a half percent of income in 2016).
With certain exceptions, you’ll pay whichever is greater - $695 or 2.5% of income - up to a cap of the national average “bronze plan” premium.
The Cost of Health Insurance
Question: Can you help me sign up for the new free insurance?
Answer: There will be no free insurance with this health reform plan, unless your income is at or near the Federal poverty level (under $10,830 in 2009) and you qualify for Medicaid.
- Medicaid: Beginning in 2014, Medicaid will be expanded to include anyone making up to 133% of poverty (approximately $14,400 in 2009).
- Small Businesses: Certain qualifying small businesses will receive a tax credit that starts at 35% and goes up to 50% in 2014.
- Subsidies: If you’re talking about getting “Federal tax subsidies” to help you afford the cost of individually purchased health coverage, those subsidies will not be available until 2014 when the new Exchanges are in operation.
At that time you will be required to buy health insurance coverage and if you earn more than $14,400 or less than 400% of Federal Poverty levels ($43,320 for an individual and $88,200 for a family of four in 2009) you will qualify for premium assistance – subsidies – to help you cover the cost of your premiums.
Question: Can you help me sign up for the “Obama plan?”
Answer: That depends on what you mean by the Obama plan.
- Public Option: If you’re referring to a “public health insurance option,” where you buy insurance from the government, that program did not make it into the final health reform bill. But, beginning in 2014 there will be new insurance policies for individuals and families available from not-for-profit insurance carriers. Those policies will be managed by the Office of Personnel Management (OPM).
- Pre-existing conditions: If you’re talking about “Access to Affordable Coverage for the Uninsured with Pre-existing Conditions,” that is a provision in the legislation that provides $5 billion of federal support for a new program to provide affordable coverage to uninsured Americans with pre-existing conditions.
This provision takes effect 90 days after the bill is signed into law, and coverage under this program will continue until new Exchanges are operational in 2014.
Once the new Exchanges are built in 2014, anyone will be able to apply for private health insurance without fear of being declined for a plan due to a pre-existing condition.
- Subsidies: If you’re talking about getting “Federal tax subsidies” to help you afford the cost of health coverage, those subsidies will not be available until 2014 when the new Exchanges are in operation.
At that time you will be required to buy health insurance coverage and if you earn less than 400% of Federal Poverty levels ($43,320 for an individual and $88,200 for a family of four in 2009) you will qualify for premium assistance – subsidies – to help you cover the cost of your premiums.
Question: Have the prices for insurance dropped yet, if not when will that happen?
Answer: Non-group health insurance – coverage you buy for yourself – can actually be very affordable. According to data from eHealthInsurance.com, the average national premium is under $165 per individual, per month.
There is also a provision in the legislation that takes effect in 2011, called “Ensuring Value for Premium Payments.” This provision ensures that people who enroll in a plan get value for their premium dollars. It accomplishes this by requiring plans in the individual and small group market to spend 80 percent of premium dollars on clinical services and wellness activities. In the large group market, plans must spend 85 percent of premium dollars on clinical services and wellness activities.
Health insurance plans that do not meet these thresholds will provide rebates to their policyholders. This provision does not apply to self-insured plans.
Annual Benefit Caps
Question: Since the new reform states that insurance plans may not limit coverage provided (maximum benefit provided), does this mean all current active polices will now become unlimited maximum benefit plans?
Answer: There is a “No Lifetime Limits on Coverage” provision in the legislation that takes affect six months after enactment and applies to all new plans.
The provision will prohibit insurers from imposing lifetime limits on benefits. Some group health plans will continue to be able to place limits on the amount covered for certain medical procedures.
Extension of Dependent Coverage for Young Adults
Question: I’m a full-time student over the age of 21. Should I go back on my parent’s health insurance plan?
Answer: We do not recommend anyone cancel health insurance until they’ve got a new health insurance policy in effect.
Within six months of the new legislation being enacted, there is a provision in the legislation entitled “Extending Dependent Coverage,” that requires any group health plan or plan in the individual market that provides dependent coverage for children to continue to make that coverage available until the child turns 26 years of age. The Department of Health and Human Services will be issuing regulations that provide more details regarding how and when a parent is able to add a dependant adult child back onto their plan.
eHealth, Inc. (NASDAQ: EHTH) is the parent company of eHealthInsurance, the nation's leading online source of health insurance for individuals, families and small businesses. Information and resources are available on various health plans, ranging from individual and family, short-term medical, and Medicare insurance. Consumers can get quotes from leading health insurance carriers, compare plans side by side, and apply for and purchase health insurance. eHealthInsurance is an online marketplace licensed to sell health insurance in all 50 states and the District of Columbia. eHealthInsurance and eHealth are registered trademarks of eHealthInsurance Services, Inc. For more information, see www.ehealthinsurance.com.