Health care spending is huge, consuming nearly 18 percent of the U.S. Gross Domestic Product. Many layers of rules and regulations from both our health insurance companies and health care providers have made it impossible to determine the costs of many even simple procedures, let alone the complicated ones. Health insurance premiums continue to increase at a rapid rate, but no better health care is being delivered. Clearly, there is a lot wrong.
It will be interesting to observe the impact of the Affordable Care Act (ACA) beginning in October of this year when those who are self-employed or employees of firms with less than 50 workers will be given the opportunity to enroll in coverage from a federal health insurance exchange.
October 1, 2013, will be the opening date for applications to the qualified health care plans being offered by private health insurance companies in your area through the federal exchange. Coverage will begin January 1, 2014. Many firms with more than 50 employees can maintain their own health care plans that were in place as of March 23, 2010, because they have been grandfathered in or approved by the Act.
Anthony Wright, executive director of advocacy group Health Access, describes the fundamental nature of the change produced by the ACA: “It’s a revolutionary improvement to move from a broken market where people are charged by how sick they are, to a competitive market where people pay what they can afford, based on a percentage of their income, on a sliding scale. Most consumers buying coverage in the individual market will get financial help and see their premiums go down.”
The ACA requires a set of core, federally-mandated benefits. The essential packages are intended to mirror those provided under a typical employer-sponsored health plan. At a minimum, the core benefits include:
•Ambulatory patient services, such as doctor’s visits and outpatient services
•Maternity and newborn care
•Mental health and substance use disorder services, including behavioral health treatment
•Rehabilitative and habilitative services and devices
•Preventive and wellness services and chronic disease management
•Pediatric services, including oral and vision care
The ACA links the essential health benefits package to limits on cost-sharing. So health plans that are required to provide essential health benefits will also be required to limit the amount consumers will have to pay out-of-pocket. Specifically, health plans will be prohibited from requiring consumers to pay annual cost-sharing that is greater than the limits for high deductible plans linked to health savings accounts.
Within these allowable limits, all health plans except grandfathered or self-insured plans will be required to provide consumers with specified levels of coverage. Levels of coverage are set as percentages of the actuarial value of a plan that covers the full essential benefits package with no cost-sharing. These levels are represented as Bronze, Silver, Gold, and Platinum. Coverage will be set at 60 percent, 70 percent, 80 percent, and 90 percent respectively.
While we will not know the actual costs of plans in the health exchange for the Charlotte region until they are published, and speculation that rates will be outrageous is rampant, the rates for California exchanges, under the rubric “Covered California,” have recently been released.
In California, it was speculated that rates might average about $5,200 per year; however, the actual rates are much less at an average of $272 per month for the lowest priced silver plans or an annual rate of about$3,265, and will be available from some 13 insurance plans. And it is just one of 16 states, along with the District of Columbia, on track to operate such an exchange.
Other states, including North Carolina and South Carolina, have chosen not to participate in a state-based model—at least for now—and are relying on a federally-facilitated exchange to provide people with that coverage, or entering into a partnership with the federal exchange.
At any rate, even the attempt to set uniform standards of care at uniform prices alone should be championed as a welcome change to our health care system, as well as making health care affordable on an equal basis to those less fortunate through no fault of their own.
Early indications show lots of reasons for states to “opt in” to the intentions of the new Affordable Care Act.