Several key consumer protections under the nation's
new health law begin taking effect Thursday — six months after its
enactment.
Insurers can no longer set a dollar limit on the
amount of care they'll provide over a person's lifetime or deny coverage
to sick children. Young adults can stay on their parents' health plans
until age 26. And consumers get greater rights to appeal insurers'
decisions.
"It's really putting in place long overdue consumer
protections," Health Secretary Kathleen
Sebelius said in an interview with USA TODAY. "It's getting rid of
some of the worst rules of the industry that prevented people from getting
covered at all or, at a time they needed coverage the most, limited the
coverage they had."
Many people, however, will have to wait until Jan. 1
for the changes to help them. That's because most of the new provisions
apply to insurance policies that begin on or after Thursday. Many plans
operate on a calendar year, and this fall will begin enrollment for next
year.
"It's not like a switch gets flipped and everything
gets changed on Sept. 23," said Jennifer Tolbert, an associate director at
the Kaiser
Family Foundation, a health policy group.
Some changes won't apply to plans that are considered
"grandfathered" under the law, meaning they existed when the law was
signed March 23 and haven't substantially changed. Those plans are
supposed to notify policyholders of their grandfathered status, Tolbert
said.
Once plans make a substantial change — such as
significantly raising co-payments or significantly reducing benefits or
the amount an employer contributes — they are no longer grandfathered.
The Thursday changes are designed to help consumers
between now and 2014, when the most significant provisions of the health
law take effect. That's when new health insurance marketplaces, called
exchanges, will be created and most Americans will be required to purchase
insurance. "This is sort of a bridge strategy," Sebelius said.
Sebelius said some insurance companies have recently
begun notifying policyholders that their premiums will increase in 2011
because of the benefits that take effect this week. Karen Ignagni,
president and CEO of the industry group America's Health Insurance Plans,
said, "The fact is if you increase benefits, you increase costs."
Ignagni said the new law contributes to insurance
rate increases, as do other factors, such as the rising costs of
prescription drugs and medical care, and a growing number of Americans who
are older or require care for chronic health conditions.
Sebelius sent a letter this month to Ignagni alleging
that insurers are sending letters to consumers "falsely blaming premium
increases for 2011" on the health law and warning that the Department
of Health and Human Services (HHS), in partnership with states, "will
not tolerate unjustified rate hikes."
She said analyses of the law's impact by various
groups — including HHS, the Urban
Institute and the Pennsylvania insurer Highmark — estimate a 1% to 2%
impact on premiums.
Steve Findlay, a senior health policy analyst at the
non-profit watchdog group Consumers Union, said consumers need to focus on
the law's benefits, "what it does for them and their loved ones — rather
than listen to politically driven criticisms and attempts to undermine the
law."
What's changing
USA TODAY's Alison Young looks at key provisions of the new health law
starting to take effect Thursday. For more information, go to www.healthcare.gov:
Keeping young adults covered
The basics: Teens and young adults
can stay on or be added to their parents' health insurance plan until
age 26. They don't need to live with their parents or be financially
dependent on them. They can even be married.
Be aware:
This right to coverage applies to all types of plans that offer
dependent coverage. However, in "grandfathered" employer group plans --
policies that existed before the law and haven't changed substantially
-- children are not eligible to go on parents' plans if the children
have access to coverage through their own workplace.
Free preventive care
The basics: Insurers must
completely cover a wide range of recommended preventive services -- such
as immunizations, mammograms and colonoscopies -- and can no longer
charge co-payments, co-insurance or deductibles for them.
Be aware:
This applies only to new plans, not to grandfathered plans.
For plans that had limited preventive services, this benefit may
contribute to higher premium costs.
Coverage for sick children
The basics: New rules prevent
insurers from denying coverage to children under age 19 with
pre-existing medical conditions, such as asthma or cancer.
Be aware:
Insurers may limit when children are signed up to certain open
enrollment periods.
This does not apply to grandfathered individual plans.
Similar protections for adults with pre-existing medical conditions
won't begin until 2014. In the meantime, adults with medical conditions
who have been uninsured for at least six months can purchase coverage
through federal high-risk pools created by the health law this
summer.
Protection against canceled coverage
The basics: Insurers no longer can
use a mistake or technical error in a consumer's application to cut off
their coverage after they get sick.
Be aware:
Consumers are not protected if they make an intentional
misrepresentation of important facts or engage in fraud.
In such cases, the insurer must give at least 30 days notice before
the plan can be canceled.
No lifetime coverage limits
The basics: The amount a plan will
pay in a person's lifetime cannot be capped.
Be aware:
This applies to all health plans.
Insurers must notify people who exceeded their lifetime limits
before Sept. 23 that those limits no longer apply.
For plans that had lower premium costs because of lifetime limits,
this benefit may contribute to higher premium costs.
Restrictions on annual coverage limits
The basics: Insurance companies
with annual limits on essential health benefits must provide an
increasing amount of coverage. Initially, their annual limit can be no
less than $750,000, rising to $1.25 million in September 2011 and $2
million in 2012. Annual limits are prohibited in 2014.
Be aware:
This applies to new individual and group plans, as well as
grandfathered group plans.
It does not apply to grandfathered individual plans.
It does not apply to "mini-med" plans that provide limited health
benefits.
Greater consumer appeals rights
The basics: Consumers have the
right to appeal insurers' decisions through their plans' internal review
processes, as well as to an independent, third-party reviewer.
Be aware:
This does not apply to grandfathered plans.
Most states already have rules allowing some form of external appeal
of insurance problems. The level of protection varies greatly, and
states have until next summer to meet all federal standards, or the
federal government will run the appeals programs in those states.
Residents of Alabama, Mississippi and Nebraska -- states that lack
any external appeals law -- will have access to an interim external
review process administered by the federal Office of Personnel
Management. Consumers in these states who have questions about an
external appeal can call 1-877-549-8152 beginning Sept.
23.