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September 21, 2010
How health insurance reform may affect you
If you have:
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A young adult living at home?
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A child with a pre-existing health condition?
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Been wondering what other benefits have changed?
This information is for you.
In the past few months, we’ve learned more about how health insurance reform, or the Patient Protection and Affordable Care Act (PPACA), will affect you, our member. As promised, we are sharing this information so you can make informed decisions about your health insurance coverage.
The provisions discussed in this article are for fully insured individual and group health plans for people under age 65. They do not pertain to self-insured health plans. Please contact your human resources administrator if you are unsure if you have a self-insured or fully insured health plan.
Please review the following information and remember that it may be different depending on whether you have an individual or family medical insurance policy or if you have fully insured coverage through an employer.
Good news for parents of adult children under age 26
Most young adults up to the age of 26 now can have dependent coverage under their parents’ health plans.
If you have an individual or family policy —
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Young adults who were enrolled on their parents’ policies as of May 2010 were previously informed that they may remain on those policies until the age of 26. This allowed young adults graduating from college or high school in May to remain on their parents’ plans even if they were no longer students.
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For those who were not covered by their parents’ plans at that time but are still 25 years of age or younger, there is an annual open enrollment period in October 2010, during which young adults can apply (or re-apply) on their parents’ plans.
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Dependents ages 18 and younger will be offered coverage regardless of their health condition, however, they are subject to medical underwriting and parents may pay a higher premium.
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Please be aware that dependents age 19 to 26 will have to pass medical underwriting in order to qualify for coverage. This means coverage may not be offered or extra premium may be charged based on medical conditions.
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Coverage for approved dependents will become effective January 2011.
If you have a fully insured plan through an employer (small business or large corporation) —
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Many young adults who were enrolled on their parents’ policies as of May 2010 were previously informed that they may remain on those policies until the age of 26. This allowed young adults graduating from college or high school in May to remain on their parents’ plans even if they were no longer students.
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For those who were not covered by their parents’ plans at that time (or did not receive notification from the employer sponsor to remain enrolled) but are still 25 years of age or younger, an open enrollment period will be held 30 days before each employer group health plan’s renewal date to allow parents to add dependents. Your human resources department or the employee who deals with your company’s health plan can provide you with the renewal date for your company plan.
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In some situations, adult dependents who are eligible for coverage under their own employer’s health plan may not be able to enroll for coverage as a dependent.
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If you work for an employer with fewer than 50 employees (considered a small employer group under the new federal law), your dependent must answer the medical questions on the application.
More information on the pre-existing health condition requirements and guaranteed issue
What is a pre-existing health condition?
A pre-existing condition is any health condition that existed before you applied for health insurance coverage or enrolled in a health plan.
What is “guaranteed issue”?
It means that a health insurance company will accept anyone who applies for coverage (and pays the premium).
A little history ...
Health plans in many states traditionally have required that people who buy individual or family coverage on their own (not through an employer) meet certain health standards before offering insurance coverage.
The process in which an insurance company evaluates the health condition of an applicant is called “medical underwriting.” Health insurance companies use medical underwriting to help manage the risk of the customers
they insure to keep coverage affordable, in much the same way as auto insurance companies look at an applicant’s driving record before deciding whether to offer auto insurance. An applicant is not guaranteed coverage
simply by applying and paying the premium in either case. In the case of a health insurance applicant, the coverage may be offered at a higher rate or not offered at all if the applicant already has costly health conditions. This
is not unlike people with poor driving records having to pay more or being denied auto coverage. Health plans operating in states that allow this practice use it because they know that accepting too many of those who already have
health problems will make health insurance more expensive for everyone. (Remember that insurance is about sharing risk across a lot of people.) In addition, in states where coverage is guaranteed regardless of any health conditions
an applicant may have, people often have waited until they are sick or needed medical care to buy insurance. Can you imagine how expensive car insurance would be if you could buy a policy when your car was already wrecked? And when
insurance costs a lot, people either can’t afford to buy it or won’t buy it. One of the provisions of the new health insurance reform law requires health plans to guarantee health insurance coverage to those who are 18 and younger in
spite of any health conditions they may have (guaranteed issue) as long as the premium is paid. This coverage is available during an annual enrollment period held in the fall each year and becomes effective on January 1 of the following year.
If you are employed with a small business or large corporation and are enrolled on a group policy, it’s a little different. Your health insurance coverage has been and will continue to be guaranteed issue. This means you are covered from when you enroll and once the waiting period established by your employer is satisfied. However, you may be subject to rules surrounding pre-existing health conditions. This means you may have to wait for a certain period of time (usually a year) before you have coverage for certain conditions unless you have been continuously covered by a group health plan for the preceding 12-month period. For example, if you had knee surgery the month before you joined the group policy, you may have to wait for a year before the policy will cover any more surgery or other treatments for that knee.
How has health insurance reform affected pre-existing health conditions requirements? And does Arkansas Blue Cross guarantee coverage for those age 18 and younger?
If you have an individual or family policy —
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Pre-existing health condition requirements will be removed for all individuals age 18 and younger as of Jan. 1, 2011.
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During open enrollment, dependents age 18 or younger will be offered coverage regardless of health condition, however, they are subject to medical underwriting and may have to pay a higher premium. Medical underwriting simply means the child’s health information may be used to evaluate the application. The first open enrollment will be in November 2010, and coverage will go into effect Jan. 1, 2011.
If you have a fully insured plan through an employer (small business or large corporation) —
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Your insurance plan will remove the pre-existing condition requirements for individuals age 18 and younger at your group’s health plan’s renewal date, beginning in October.
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There always has been guaranteed issue on group policies. Everyone is covered at the time of enrollment.
What are the rules on lifetime limits?
If you have an individual or family policy —
Lifetime dollar limit benefits have been removed. On most Arkansas Blue Cross plans, the lifetime maximum benefit previously ranged from $1 million up to $5 million.
If you have a fully insured plan through an employer (small business or large corporation) —
The lifetime dollar limit benefit is now unlimited. On most Arkansas Blue Cross plans, the lifetime maximum benefit previously ranged from $1 million up to $5 million.
What are the rules on annual dollar maximums?
For both individual or family policies and fully insured plans through an employer —
There will be changes in your current benefits for ambulance, home health and durable medical equipment. These changes will be described in detail in your Certificate of Coverage or Evidence of Coverage policy, which will be provided to you when you renew your coverage.
We’re working to keep you informed
Changes to your benefits are based on our current understanding of PPACA. These changes have been made in good faith based on the interim final regulations released by the U.S. Department of Health and Human Services. Many of the regulations remain in a “comment” period; therefore, other changes could be coming. We will continue to keep you up to date. As your health insurance company, it’s our responsibility to help you understand the changes in your coverage. And, it’s our privilege to serve you.
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