Another goal of healthcare reform is to protect us from abuses by insurance companies. Of course, the insurance industry is already regulated by the government, but the Affordable Care Act takes it a step further, for example, by providing a process for independent, third-party review of any claims denied by your insurance company. Other new protections include eliminating pre-existing conditions as a reason to deny coverage and raise premiums, outlawing the retroactive cancellation of insurance policies, and phasing out annual and lifetime limits on your coverage.
According to the Department of Health and Human Services, as many as 19 to 50 percent of Americans under age 65 have some type of pre-existing condition-a known medical condition that you have before you apply for insurance.
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What is a pre-existing condition? Dr. Peter L. Duffy explains.
Most of us have a pre-existing condition of one kind or another. And, as a visitor to this site, you or someone you love may have one of the most common-heart disease, which according to the American Heart Association affects one in every three adults. But even if you have something relatively less serious, such as an overbite or hay fever, it can cost you higher premiums and in some cases loss of coverage.
Under the Act your insurance company will no longer be allowed to limit or deny coverage based on your pre-existing conditions and your premiums may not be higher than those of other beneficiaries of the same age, sex, and location. In the meantime the federal government will offer a new program to provide an affordable option for high-risk individuals with pre-existing conditions.
The Act offers the following specific protections from discrimination based on pre-existing conditions:
- Outlaws denial of coverage for pre-existing conditions. Beginning in 2014, insurers can no longer deny or limit your coverage based on pre-existing conditions.
- Makes pre-existing condition insurance plans available until then. The Act provides for the creation of a new program called the Pre-Existing Condition Insurance Plan (PCIP) for people with pre-existing conditions who need insurance prior to the elimination of pre-existing denials in 2014. (Visit www.pcip.gov for more information about eligibility and the benefits of this program.)
- Eliminates pre-existing condition denials for children as of 2010. Children under age 19 are already protected by the new law. Insurance companies are no longer allowed to exclude, limit, or deny your child coverage based on a condition he or she had before you applied for coverage. This new rule applies to all employer-sponsored health plans and individual health insurance policies issued after March 23, 2010, and for plan or policy years that began on or after September 23, 2010.
- Patients cannot be charged more because of pre-existing conditions. Insurance companies can no longer charge higher premiums to beneficiaries with pre-existing conditions.
In 2014 if you choose to purchase insurance from your state exchange, pre-existing conditions will no longer prevent you from getting the coverage you want, and you will be eligible for the same coverage as everyone else at a competitive price.
Cancellation of Insurance Policy
Perhaps you've read media reports of insurance companies retroactively cancelling coverage of critically sick or injured policy holders after finding mistakes or omissions in their policies. In many of these cases, the medical condition omitted had nothing to do with the condition being treated or the policy holder had no knowledge of the condition when he or she applied for insurance.
In some of these cases insurance companies have been accused of looking for employer or beneficiary mistakes or oversights to avoid paying for expensive treatment that policy holders thought they were already covered. People who thought they had coverage instead faced bankruptcy or were forced to forgo much-needed treatment.
Under the Act, insurance companies can no longer retroactively cancel your insurance coverage unless you deliberately lie or omit information about your condition, symptoms, or treatment received, or you fail to pay your premiums. If you or any other member of your family covered by the policy (for individual policies) or your employer (for group coverage) makes an honest mistake or omission on your application or other paperwork, such as a change in status (for example, divorce), it will no longer be grounds for cancellation as long as you have paid your premiums in full and on time. However, be aware that your coverage can be cancelled going forward if, for example, your employer realizes a mistake or oversight, such as an employee change in status from full- to part-time employment.
If an insurance company does decide to cancel your policy, they must give you at least 30 days notice to appeal or find other insurance. This rule applies to individual policy or group plan years that begin on or after September 23, 2010.
Annual and Lifetime Caps
According to "Fact Sheet: The Affordable Care Act's New Patient's Bill of Rights", over 100 million Americans have health coverage with lifetime limits and many plans and policies of all types limit the amount of coverage per year. These limits can create devastating consequences for people who have to rely on their savings to cover the cost of expensive and in some cases, life-saving treatments.
To address this problem, the Affordable Care Act phases out annual dollar limits by requiring that they be no lower than $750,000 for plans issued or renewed after September 23, 2010, and they are eliminated entirely for all employer and new individual plans, and plans issued or renewed on or after January 1, 2014.
It is a good idea to check with your plan administrator to be sure that you understand any annual or lifetime limits on your coverage. And, until these caps are eliminated in 2014, you may want to consider finding coverage that does not have limits if you have an opportunity to renew or change your coverage.