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When will the health care reform law take effect?

The health insurance reforms adopted as part of the Patient Protection and Affordable Care Act (PPACA), and the subsequent reconciliation bill, are phased-in over 5 years. Most provisions will not take effect until January 1, 2014. However, there are some new protections that have already been implemented:

  • Lifetime limits are prohibited and annual limits are restricted
  • Enhanced appeal procedures are available to consumers
  • Children under 19 years of age cannot be denied coverage
  • Children up to age 26 may remain on a parent's policy
  • Preventive services must be coverage and cannot have cost-sharing
  • New rate review transparency requirements are in place
  • Medical loss ratio standards limit insurers' overhead
  • A standardized summary of benefits must be used by all insurers, allowing for easier comparison of plans

In addition, subsidized coverage for people with pre-existing conditions that cannot find coverage in the private market is now available in every state through January 1, 2014.

Will I be required to give up my current coverage?

No. Health plans in effect as of March 23, 2010, are grandfathered under the law and will be considered "qualified coverage" that meets the mandate to have health insurance that begins January 2014 as long as the issuer continues to offer it without substantial changes.

How will my benefits be impacted by the law?

Every plan sold or renewed in the individual and small group market after January 1, 2014, must include all the benefits in a "benchmark" plan – a plan chosen for the state based on coverage currently available in the state – and will cover services in the following categories:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance abuse disorder services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care

Why does the law require me to purchase health insurance coverage?

The key goal of the health care reform law is to ensure that nobody can be denied coverage or be priced out of coverage due to a health problem. However, if you allow people to wait until they have a health problem to purchase insurance, then the market simply will not work. There would be few choices available to consumers, and those choices would be expensive for everyone. So, the law requires everyone to have minimum coverage, thus creating a pool of both sick and healthy individuals.

How will my out-of-pocket costs be impacted?

All plans sold or renewed in 2014, must limit the out-of-pocket exposure of consumers to approximately $6,000 for individual and $12,000 for families. These limits will be indexed to average premium growth in future years. In addition, the deductible for plans in the small group market will be limited to $2,000 for individuals and $4,000 for families in 2014, also indexed to average premium growth in future years.

Also, all plans must design their cost-sharing (deductibles, copays, coinsurance) to fit into specific levels of coverage. The levels of coverage are defined as follows:

  • Bronze Level – The plan must cover 60% of expected costs for the average individual
  • Silver Level – The plan must cover 70% of expected costs for the average individual
  • Gold Level – The plan must cover 80% of expected costs for the average individual
  • Platinum Level – The plan must cover 90% of expected costs for the average individual

The exchange will group coverage by these "metal" levels, allowing consumers to easily compare comparable options.


Contact a plan advisor today.

(800) 722-3365