Individual and family insurance plans with comprehensive benefits could see major price spikes in the coming months as more measures of The Patient Protection and Affordable Care Act come into place.
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A new report found plan premiums that cover benefits like prescription drugs and maternity care, among others, will increase by nearly half this year. The “Cost of Comprehensive Health Benefits” report from eHealth, Inc. found the average monthly premiums for individual and family health insurance plans are 47% higher than average when they cover a comprehensive list of eight health benefits compared to2012. Deductibles are on average for plans that cover these benefits are 27% lower than the average for all plans.
The report compared 30,000 individual plans purchased across 32 states on eHealthInsurance.com. eHealth has released this report since 2005, and has tracked the percentage of plans that cover benefits it deems to be comprehensive including laboratory and X-ray, emergency services, prescription drugs, chiropractic, maternity, OB/GYN care, periodic exams and baby care.
Under the Affordable Care Act, there are 10 essential health benefits that all major medical health-insurance plans must cover at a value of 60% or more in order to fulfill the federal mandate for health coverage starting January 2014. According to eHealth, those benefits under the ACA include: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
eHealth says the report’s benefits list is not “apples to apples” with the ACA’s requirements, but signals how the law will potentially impact costs, according to Carrie McLean, eHealth senior manager of Customer Service and Retention.
“The benefits in these plans will cost customers more,” McLean says. “We didn’t even look at all the essential health benefits. Currently these are covered at 80% and consumers by 20%-- under the ACA the actuarial value of these benefits [by insurance] will be at a minimum of 60%, so even with all of these benefits they are not being paid at as high a rate.”
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The people in the insurance system today are medically underwritten for coverage, which will also change under the new law, McLean says.
“Right now, they were considered healthy enough to be a good risk for the insurance companies to take on,” she says. “Next year they will take on everyone, even though they may never use these essential health benefits.”
Unless consumers are eligible for a government subsidy to lower their costs, it’s unlikely their premiums will drop, she says.
Here is some of the data from eHealth’s report:
Looking to save on health insurance under the new health-care reform? Here are some tips from Nancy Thompson, vice president in the employee benefits division of professional business support company CBIZ.
Look to employer coverage. Thompson says once employers are required to offer insurance, you should consider obtaining coverage through them, as costs will likely be more controlled. “There will be more options and more places to go to access coverage,” she says. “The individual markets will still exist, but will likely decline because of restraints in regard to flexibility and pre-existing conditions.”
Consider a Flexible Spending Account. These accounts allow you to put money into an account tax-free to cover approved medical costs and have potential to lower your costs over time, according to Thomspon. “Look at the cost of these plans in relation to your known expenses. It’s better to put your dollars in an FSA plan or a higher-value plan.”
Know your maximum out-of-pocket costs and risks. Evaluate the most you can afford to spend out of pocket on health coverage and choose a lower- value plan and supplement it with the right comprehensive voluntary offerings, she recommends.