3 Major Consumer Changes of Health Reform
Health Reform Changes: Preexisting Conditions, Expanded Coverage, and More
No single piece of legislation has had more of an impact on health care in the United States since Medicare and Medicaid in 1965 than the Patient Protection and Affordable Care Act of 2010. The intent of this program – to make health care more affordable and accessible for up to 32 million Americans who were previously uninsured – has inspired several key changes in how coverage is paid for, given, and regulated.
PPACA: A Brief Look
The PPACA was signed into law in March, 2010 after nearly a year of contentious debate. The main argument against the bill, simply put, was that it placed too much control of health care in the hands of the federal government and would not control costs. Supporters of the bill, however, claimed that federal involvement was needed in order to correct serious deficiencies with the health care system in the U.S. – one of the most expensive and least cost-efficient systems (depending on how you look at it) in the developed world.
Among the solutions created by this are approaches that address the problems of preexisting conditions, coverage for students and young adults, and mandating insurance.
Preexisting conditions and Insurers
One of the main patient-facing provisions of PPACA comes with preexisting conditions. Prior to PPACA, private insurers in the United States were free to deny coverage or exclude individuals from obtaining insurance policies based on preexisting medical conditions, or conditions that existed prior to the policy’s beginning. This was a highly contentious issue and one of the main points of focus for the law.
Under PPACA, by 2014, all insurers operating in the United States will be forbidden by law from discriminating against those with preexisting conditions, or otherwise charging higher premiums for these individuals. The decision as to whether or not you think this is an improper use of government power is up to you, but it is safe to say that preexisting conditions will no longer a concern for many individuals when it comes to health insurance. Opponents suggest that the cost of covering those with pre-existing conditions will simply be built into premiums going forward, raising costs for otherwise healthy people.
Student and Dependent Coverage
Prior to the passage of this bill, dependent children who were students lost coverage under their parents’ insurance plan upon leaving full-time student status. Starting on September 23, 2010, dependent children are covered under their parents’ insurance plan until they turn 26 – provided that they still qualify as dependents for tax purposes.
This move came about as a way to provide coverage for individuals from the ages of 22 to 26, which formerly were one of the groups that was most chronically uninsured. Now, dependents are covered for an addition four more years, on average. What is perhaps most important, the risk pool should now include many young, healthy people, something that is necessary to offset the costs of insuring sicker Americans.
Insurance Mandates
Perhaps the most controversial provision of PPACA is the mandate for insurance. The federal government has mandated that every individual acquire some form of health insurance by January 1, 2014. If individuals do not comply, they will owe a fee of either $95 or 1% of income (whichever is greater). By 2016, this fee will rise to 2.5% of income, or $695.
This is controversial because it is the first time in American history in which the federal government has required individuals to purchase health insurance, and many schools of thought suggest it is the first time that the federal government has required the purchase of a product or service. Critics claim that this is unconstitutional, while supporters argue that the one of the main ways to lower costs is to make the pool of buyers as large as possible.
Despite how the law ultimately turns out in terms of legality, the three changes described above are without a doubt measures that you need to know – and are provisions that could affect you.