In June, the Supreme Court upheld much of the Patient Protection and Affordable Care Act (ACA), the wide-ranging health-care law meant to substantially alter America’s health insurance system.
You’ve probably seen hundreds of headlines about the best-known parts of the ACA—the fact that it will require most Americans to have health insurance or pay a “penalty”…will require insurance companies to offer policies to all who apply (even those who are sick)…and will raise the Medicare tax on people who earn more than $200,000 ($250,000 for married couples filing jointly).
But some important elements of the ACA have not made headlines or are commonly misunderstood. Depending on your situation, it may be very important that you know about these elements. Among the ACA’s lesser-known consequences and hidden loopholes are the following…
Your retirement could cost your adult child his/her health insurance. One of the much-ballyhooed aspects of the ACA is that it allows adult children to remain on their parents’ health insurance coverage through age 26. But there’s an important exception to this rule that hasn’t received much attention—it usually does not apply to retiree health plans.
Vital: If your adult child is on your health insurance coverage and you expect to retire soon, confirm that your retiree plan will cover the child. If it won’t, the adult child should start researching alternative coverage options well before your retirement date. Options might include individual coverage…COBRA coverage from the parent’s former employer’s plan…or Medicaid coverage if the adult child has very limited income and assets.
Preventive care sometimes isn’t 100% covered despite news reports to the contrary. One well-publicized aspect of the ACA is that insurers now are required to provide many forms of preventive care—things such as routine checkups, mammograms and colonoscopies—without the patient paying a penny out-of-pocket.
What’s rarely mentioned is that this preventive-care provision is so loaded with confusing caveats that patients who seek “free” preventive treatments might end up with unexpected medical bills. For example, if your insurer has not made major changes to your plan since the ACA passed in 2010, the plan might be “grandfathered” and not obliged to fully cover preventive services. Preventive care also might not be fully covered if you seek treatment from an out-of-network provider…you have a limited-benefit plan that has obtained a government waiver freeing it from the preventive-care mandate…or the specific preventive treatment that you receive is not one covered by the ACA.
Self-defense: To avoid surprises, contact your plan provider or your employer’s benefits department to confirm the coverage level before you schedule any preventive services.
The ACA’s attempt to close the Medicare Part D “donut hole” has made selecting the right Part D plan more important—and more difficult. Medicare recipients face a gap in their prescription drug coverage—the so-called Part D “donut hole.” If you incur significant pharmaceutical bills during a year, you might have to pay thousands of dollars of drug costs out-of-pocket before your Part D benefits resume.
The ACA will slowly close that Part D donut hole over the coming years. It will force drug manufacturers to offer steep discounts to buyers who reach the donut hole and will require Part D plans to pay most of the remaining costs. Trouble is, drug manufacturers and the private companies that sell Part D plans inevitably will pass the cost of that expanded coverage along to Part D plan participants—and some will do so in subtle ways that might not be noticeable at first.
Example: An insurer might remove many brand-name drugs from its formulary—its list of covered drugs. You probably won’t notice until you refill a prescription or receive a first-time prescription for one of these drugs.
As different insurance companies adopt ways to pass along the cost of closing the donut hole in the coming years, the differences among Part D plans will increase, making it more important than ever for patients to carefully examine available Part D options during the open-enrollment period. Do this every year even if you are pleased with your current Part D plan—your current plan might change substantially from year to year as insurers adjust to the ACA’s rules. This is happening already—I have a client who would have faced $10,000 more in out-of-pocket costs this year with one Part D plan than with another.
Useful resource: The Medicare Web site, www.MyMedicare.gov, can help you analyze Part D options.
If you have a health condition that makes obtaining insurance on the individual market difficult or impossible, now might be the best time to find affordable coverage. People with preexisting conditions will be able to purchase individual health insurance at the same rates as healthy people starting in 2014. Until then, government-subsidized high-risk pools are available to help these people get insurance.
These high-risk pools have attracted little attention and relatively few participants, in part because of their strict eligibility requirements—only people who have been without health insurance for at least six months can join, among other restrictions. But these pools can be a tremendous deal for those who qualify. Some states are running their own high-risk pools, while others offer pools run by the Department of Health and Human Services (DHHS). Rates vary, but in general, they are even lower than the rates likely to be available starting in 2014.
Example: A 50-year-old with serious health problems that make him otherwise uninsurable could obtain coverage for between $214 and $559 a month through a DHHS-administered pool, depending on his state of residence and other factors—less than many perfectly healthy people his age pay. Rates tend to be much steeper in high-risk pool programs that were created by states before the ACA. Those programs vary, too, but are not federally subsidized.
What to do: If you have a preexisting condition and have been without health insurance for at least six months, don’t wait until 2014 to shop for coverage. Visit the government’s high-risk pool Web site, www.pcip.gov, to find out if you qualify for appealing rates now.
Source: Maura Carley, MPH, CIC, CEO of Healthcare Navigation, LLC, a patient advocacy and consulting company based in Shelton, Connecticut. She previously held senior management positions with Yale-New Haven Hospital, Stamford Hospital and Kaiser Permanente. She is author of Health Insurance: Navigating Traps & Gaps (Ampersand, Inc.). www.HealthCareNavigation.com