When faced with a cancer diagnosis people are often thrown into the confusing world of health insurance. Suddenly, options for coverage may be limited because they now have a pre-existing condition; insurance companies may try to cancel their existing policies, or they may be told that they have reached their benefit limit and be forced to pay out of pocket for any remaining coverage. The Patient Protection and Affordable Care Act (ACA) sought to change all of that.
Perhaps the most significant change is that starting January 1, 2014, insurance companies can no longer deny selling people a policy because of a pre-existing condition. They also cannot charge individuals more because of that pre-existing condition. And because more people are now going to be able to purchase health insurance the ACA also created a new way to shop for coverage. These “Marketplaces,” sometimes referred to as “Exchanges,” will vary state by state, but will be open to individuals, families, and small businesses (under 50 employees) who are often not able to access health insurance anywhere else (e.g., through an employer).
Understanding Health Care Marketplaces
In each Marketplace, consumers will have four main categories of insurance plans to choose from. These four levels of insurance plans are Platinum, Gold, Silver, and Bronze. The main difference between these categories lies in how much the insurance company will cover, and how much the individual will pay (otherwise known as a “cost-share”). With the Platinum plan, you would pay 10% of your medical costs and the insurance company would cover 90%. In the Gold plan, you would pay 20% of your medical costs and the plan would cover 80%. In the Silver plan, you would pay 30% of your medical costs and the plan would cover 70%, and finally in the Bronze plan, you would be responsible for 40% of your medical costs and the plan would pay the remaining 60%. In most states you will have several different plan options within each of these categories.
There is a fifth category of plan called the catastrophic plan. These very limited plans will only be available to individuals under 30 years old and those who are exempt from the individual mandate.
For all levels of plans there is a maximum annual deductible of $2,000 for an individual plan and $4,000 for a family plan. Additionally, the ACA imposes limits on how much consumers are required to pay out-of-pocket for medical expenses, other than their premiums, when they purchase health insurance plans in the Marketplaces. In 2014, the cap on these expenses is $6,350 and for a family the cap is $12,700. After these maximums are reached, insurance will cover 100% of the medical expenses. These caps will aid in keeping out-of-pocket costs to a certain amount and help people avoid bankruptcy due to medical debt.
There will also be financial assistance for many people who purchase health insurance policies in the marketplaces. This financial assistance is based on income and family size.
- Individuals who have incomes between 138% of the Federal Poverty Level (FPL) and 250% FPL, will be eligible for cost-sharing subsidies (in 2013, $15,856 and $28,725). These subsidies will reduce the cost of health care expenses an individual or family has to pay at the time of medical care (e.g., reducing the co-payment you make when you visit the doctor’s office).
- People with annual incomes between 138% and 400% of the FPL (in 2013, $15,856 and $45,960), may also be eligible for a premium tax credit. This tax credit would reduce the amount you pay monthly for your premium.
- Individuals who have an income below 138% of FPL will most likely not be eligible for subsidies. These individuals will need to look to their individual state to determine if they will be eligible for Medicaid. States had the option to expand the Medicaid program to cover all individuals making an income below 138% of the FPL. If so, you will now be eligible for Medicaid coverage and the federal government will be responsible for the majority of your health care cost. If not, you will have roughly the same options you have now. You can look to this Subsidy Calculator to determine your eligibility.
When you complete an application to purchase a health insurance policy in the marketplace you will be asked to include some of your financial information this is so the marketplace can determine if you are eligible for any of these financial assistance options.
The Marketplaces opened for business on October 1, 2013; however, the earliest coverage will begin is January 1, 2014. In order to have coverage starting the first of the year, you must purchase a plan by December 15, 2013. Due to the overwhelming interest in these marketplaces, many of the websites are experiencing significant delays. We are recommending that people be patient and recognize that millions of people are trying to access this information. That is one of the reasons that for this first year, open enrollment in the Marketplaces will extend from October 1, 2013, through March 31, 2014.
Other Health Care Changes
Although we have to wait a few more months for insurance purchased in the marketplaces to go into effect, there have already been significant improvements to the health care system, including:
- Limited Rescissions: Health insurance companies can no longer retroactively cancel someone’s policy after they get sick just because they may have made a mistake on their original application. Companies now have to show that someone intentionally lied on their application in order to cancel the policy.
- Eliminates Benefit Caps: Insurance companies are barred from imposing lifetime caps on the amount of benefits they will pay out for someone’s health care. Starting in 2014, annual limits will also be prohibited.
- Free Preventative Services: Most health insurance policies now have to cover preventive services for free. “Free” means that not only will the insurance plan cover the cancer screening, but they cannot apply any costs to your deductible, or charge you a co-pay or co-insurance amount. Some of the cancer-related preventive services include:
- Breast cancer mammography screenings every 1 to 2 years for women over 40
- Cervical cancer screening for sexually active women
- Colorectal cancer screening for adults over 50
- BRCA genetic counseling and testing
- Immunizations for Human Papillomavirus (HPV)
- Tobacco use screening and cessation interventions
The complete list of covered preventative services can be found here.
This list is by no means exhaustive; but rather illustrates the types of changes the ACA makes to the way our health care system works.
For more information about what is happening in your state to implement the ACA and to begin completing an application to purchase insurance in the marketplaces, visit www.HealthCare.gov.
Please note that this information is designed to provide general information on the topics presented. It is provided with the understanding that the experts are not engaged in rendering any legal or professional services by its publication. The information provided should not be used as a substitute for professional services.