Every week, Archelle Georgiou, MD, strategic adviser at Healthgrades, will explain one facet of the Affordable Care Act.
In response to the uproar about millions of individuals receiving coverage cancellation letters, last Thursday, the Obama administration announced that health insurance companies could extend those policies for one more year. Unfortunately, the conversation is centered on finding fault and where to assign blame. Is it the President for saying you can keep your plan or the insurance companies who sent out the letters?
Frankly, it’s neither. The reason for the letters being sent to approximately 10 million Americans is rooted in the Affordable Care Act’s (ACA) requirement that health insurance policies include coverage for:
1. Inpatient, outpatient and emergency care
2. Prescription drugs
3. Prevention and wellness services
4. Rehabilitative services and devices that help people with injuries or disabilities gain or recover mental and physical skills
5. Laboratory services including blood tests and radiology services
According to the Department of Health and Human Services (HHS), the vast majority of health insurance policies already cover these services. However, the ACA also requires the following “Essential Benefits”:
6. Maternity and newborn care for a mother and baby before and after the baby is born
7. Pediatric services, including oral and vision care for children
8. Mental health and substance use disorder services including counseling and chemical dependency services
HHS data shows that substance abuse services have only been covered by about 66 percent of plans and maternity and newborn care by 38 percent of policies. In addition, while routine medical care has been covered for children, according to a study by HealthPocket, comprehensive pediatric services, which include vision and dental care, have only been covered in 24 percent of policies.
In order to be compliant with the ACA, insurance companies had a choice: either amend the existing policies to include these additional services or cancel the policies and suggest that people buy one that includes all the required benefit. Either way, the added cost of maternity, mental health and pediatric care adds approximately 8-11 percent to monthly premium costs.
What if you don’t have children and have no need for pediatric care? What if you are 50, done having children and don’t want maternity care? The ACA doesn’t allow individuals to pick and choose from the list of Essential Benefits.
So, what should you do? My recommendation is to ignore the finger pointing. Instead, spend your time getting familiar with all the services covered by your new ACA compliant health plan — especially the preventive care and wellness services that you can get without copayments and deductibles.