Health Care Law Changes Demand Closer Reviews Before Renewal

Many consumers may be surprised to discover that their health care premiums are likely to go up this year as employers absorb the cost of extended coverage provisions under the Affordable Care Act. More companies will also be charging on a per-participant basis instead of offering family rates. Due to these and other potential changes, it is imperative to review, not simply renew an existing policy.

In order to comply with the provisions of the new law, however, all health policies must provide free coverage for preventive services. That means no deductibles and no co-pays. The list of 50 included services include: blood pressure and cholesterol checks, mammograms, vaccines, screening for depression, and even counseling to help smokers put down those cigarettes.

Many consumers who simply renew their existing plans may still be paying for those items because plans that were in place prior to the March passage of healthcare reform are exempt. They lose that status, however, if they make any changes including eliminating items that were previously covered or raising co-pays or deductibles. Existing policies should definitely be reviewed with these facts in mind.

Additionally, all plans, even those that have “grandfathered” status are now required to extend benefits to adult children up to age 26. These individuals cannot be excluded for pre-existing conditions, even something as serious as cancer. There is, however, a catch. If the parents are on Medicare, their adult children will not be covered and if the children get a job with benefits, they can be disqualified from their parents’ plan.

Lifetime caps on coverage are now forbidden and yearly coverage limits have been raised to $750,000 and will go to $1.25 million in 2011. Those caps will also disappear altogether in 2014 when the full provisions of the Affordable Care Act go into effect. Note, however, that some 30 companies, including McDonald’s, have received federal waivers because they threatened to drop employee health coverage altogether in the face of the raised limits.

Expect to see more incentives for prevention and health improvement measures like gym memberships and nutrition counseling. Many insurers are also pushing high-deductible polices, which may be attractive to some consumers as the premiums are lower. The major theory, however, is that the insurance industry will operate under more transparent standards. Part of the responsibility for that transparency, however, rests with policy holders who must not be complacent. Automatic renewal in the face of all these changes is definitely not in your best interests this year.