Three years ago, on March 23, 2010, Pres­i­dent Oba­ma signed the Afford­able Care Act (ACA) into law. While sev­er­al sub­stan­tial pro­vi­sions don’t take effect until 2014, many of the Act’s require­ments already have been imple­ment­ed, includ­ing:

  • Insur­ance poli­cies must allow young adults up to age 26 to remain cov­ered on their par­en­t’s health insur­ance.
  • Insur­ers can­not deny cov­er­age to chil­dren due to their health sta­tus, nor can com­pa­nies exclude chil­dren’s cov­er­age for pre-exist­ing con­di­tions.
  • Life­time cov­er­age lim­its have been elim­i­nat­ed from pri­vate insur­ance poli­cies.
  • State-based health insur­ance Exchanges intend­ed to pro­vide a mar­ket­place for indi­vid­u­als and small busi­ness­es to com­pare and shop for afford­able health insur­ance are sched­uled to be imple­ment­ed by Octo­ber 1, 2013.
  • Insur­ance poli­cies must pro­vide an easy-to-read descrip­tion of plan ben­e­fits, includ­ing what’s cov­ered, pol­i­cy lim­its, cov­er­age exclu­sions, and cost-shar­ing pro­vi­sions.
  • Med­ical loss ratio and rate review require­ments man­date that insur­ers spend 80% to 85% of pre­mi­ums on direct med­ical care instead of on prof­its, mar­ket­ing, or admin­is­tra­tive costs. Insur­ers fail­ing to meet the loss ratio require­ments must pay a rebate to con­sumers.
  • The ACA pro­vides fed­er­al funds for states to imple­ment plans that expand Med­ic­aid long-term care ser­vices to include home and com­mu­ni­ty-based set­tings, instead of just insti­tu­tions.
  • The ACA pro­vides fund­ing to the Nation­al Health Ser­vice Corps, which pro­vides loan repay­ments to med­ical stu­dents and oth­ers in exchange for ser­vice in low-income under­served com­mu­ni­ties.
  • Medicare and pri­vate insur­ance plans that haven’t been grand­fa­thered must pro­vide cer­tain pre­ven­tive ben­e­fits with no patient cost-shar­ing, includ­ing immu­niza­tions and pre­ven­tive tests.
  • Through rebates, sub­si­dies, and man­dat­ed man­u­fac­tur­ers’ dis­counts, the ACA reduces the amount that Part D Medicare drug ben­e­fit enrollees are required to pay for pre­scrip­tions falling in the donut hole.

Major pro­vi­sions com­ing in 2014

Sev­er­al impor­tant pro­vi­sions of the ACA are due to take effect in 2014, such as:

  • U.S. cit­i­zens and legal res­i­dents must have qual­i­fy­ing health cov­er­age (sub­ject to cer­tain exemp­tions) or face a penal­ty.
  • Employ­ers with more than 50 full-time equiv­a­lent employ­ees are required to offer afford­able cov­er­age or pay a fee.
  • Pre­mi­um and cost-shar­ing sub­si­dies that reduce the cost of insur­ance are avail­able to indi­vid­u­als and fam­i­lies based on income.
  • Poli­cies (oth­er than grand­fa­thered indi­vid­ual plans) are pro­hib­it­ed from impos­ing pre-exist­ing con­di­tion exclu­sions, and must guar­an­tee issue of cov­er­age to any­one who applies regard­less of their health sta­tus. Also, health insur­ance can’t be rescind­ed due to a change in health sta­tus, but only for fraud or inten­tion­al mis­rep­re­sen­ta­tion.
  • Poli­cies (except grand­fa­thered indi­vid­ual plans) can­not impose annu­al dol­lar lim­its on the val­ue of cov­er­age.
  • Indi­vid­ual and small group plans (except grand­fa­thered indi­vid­ual plans), includ­ing those offered inside and out­side of insur­ance Exchanges, must offer a com­pre­hen­sive pack­age of items and ser­vices known as essen­tial health ben­e­fits. Also, non­grand­fa­thered plans in the indi­vid­ual and small busi­ness mar­ket must be cat­e­go­rized based on the per­cent­age of the total aver­age cost of ben­e­fits the insur­ance plan cov­ers, so con­sumers can deter­mine how much the plan cov­ers and how much of the med­ical expense is the con­sumer’s respon­si­bil­i­ty. Bronze plans cov­er 60% of the cov­ered expens­es, Sil­ver plans cov­er 70%, Gold plans cov­er 80%, and Plat­inum plans cov­er 90% of cov­ered expens­es.