New Consumer Protections Available Under the Affordable Care Act

The new protections the ACA put into place  can affect you and your family. Whether you need major medical health coverage or have it already, the ACA offers new rights and consumer protections. Some rights and protections apply to plans in the Health Insurance Marketplace (the State Exchanges) or other individual insurance, some apply to job-based plans, but most apply to all health insurance plans.

No Denied Coverage Due to a Pre-existing Condition 

You cannot be denied insurance coverage because you have a pre-existing condition.  Starting in 2014, insurance companies will be required to sell policies to everyone regardless pre-existing conditions, and they will be prohibited from using that condition to determine how much your health insurance will cost. You can purchase health insurance regardless of any current or past health conditions, and insurance companies cannot charge you a different premium.  Similarly, Medicaid and the Children's Health Insurance Program(CHIP)  cannot refuse to cover you or charge you more because of a health condition.
One exception: grandfathered individual health insurance plans -the kind you buy yourself, not through an employer do not have to cover pre-existing conditions.  If you have one of these plans, you can switch to a State Exchange plan during open enrollment and immediately receive coverage for your pre-existing condition.

No More Retroactive Cancellation of Health Insurance

As of 2010, the ACA stops insurance companies from canceling your coverage if you made a mistake on your insurance application. In the past, if your insurance company found that you had made a significant mistake on your insurance application, they could:
  • •    Take away your coverage
  • •    Declare your policy invalid from the day it started
  • •    Ask you to pay back any money they have already spent for your medical care

It is now illegal for insurance companies to cancel your coverage simply because you made an honest mistake or left out information that has little bearing on your health.

Your insurance company can still cancel your coverage if you knowingly put false or incomplete information on your insurance application. They can also cancel your coverage if you do not pay your premiums on time.

Summary of Benefits and Coverage is Required

As of 2014, you have the right to receive an easy-to-understand summary about a health plan’s benefits and coverage. Insurance companies and group health plans must provide you with:
  • •    A short, plain-language Summary of Benefits and Coverage (SBC)
  • •    A Uniform Glossary of terms used in health coverage and medical care
  • •    All individual and group plans must use the same standard form to help you compare plans

The SBC also includes details, called coverage examples, which allow you to see what the plan would cover in 2 common medical situations: diabetes care and childbirth. This information allows you to make “apples-to-apples” comparisons when you are looking at different plans.

Accountability Rate Review and  the Medical Loss Ratio Rule

The ACA provides two new tools to keep insurance rates down. Rate Review and the Medical Loss Ration Rule which is sometimes referred to as the  80/20 rule.

Rate Review

Rate Review requires insurance companies to publicly justify any rate increase of 10% or more before raising your premium. Some rate increase proposals have already been rejected or withdrawn.  This rule does not apply to individual grandfathered plans.

Medical Loss Ratio(MLR) or the 80/20 Rule

Medical Loss Ratio (MLR) generally requires insurance companies to spend at least 80% of the money they take in from premiums for individual and small group policies on health care and quality improvement activities instead of administrative, overhead, and marketing costs. If an insurance company uses 80 cents out of every premium dollar to pay for your medical claims and activities that improve the quality of care, the company has a MLR of 80%. Insurance companies selling to large groups (usually more than 50 consumers) must spend at least 85% of premiums on care and quality improvement. If your insurance company does not meet these requirements, the primary premium payer will receive a rebate from their premiums.  For small group and large group plans, the rebate is usually paid to the employer.

Young Adult Coverage

As of 2010, if you are under 26 years old, you may be able to get insured under a parent’s plan.  An adult child may join coverage during a plan’s open enrollment period or during other special enrollment opportunities if the plan provides dependent coverage. The employer or insurance company can provide details.

You can join, remain, or return to a parent’s plan, up to age 26, even if you are:
  • •    married
  • •    not living with your parents
  • •    attending school
  • •    financially independent

No Lifetime and Yearly Limits

As of 2010, the ACA stops insurance companies from limiting lifetime coverage for essential health benefits. In 2014 this applies to yearly limits too.

Lifetime Limits

Insurance companies cannot set a dollar limit on what they spend on essential health benefits for your care during the entire time you’re enrolled in that plan.

Yearly Limits

Insurance companies can still set a yearly dollar limit of $2 million on what they spend for your coverage for plan years or policy years starting before January 1, 2014. No yearly dollar limits on essential health benefits are allowed for plan years starting January 1, 2014.

Right to Appeal Coverage Decisions

As of 2010, you have the right to appeal private health plan decisions. Private Insurance plans  have to explain why a request for treatment (claim) has been denied and they must et you know how you can dispute their decision.

Internal Appeals

You can ask your insurance company to reconsider its decision to deny payment for a service or treatment. It must review its decision.

External Review

If your insurance company still denies payment, the law allows you to have an external review. The review will be done by an independent organization that will decide if the insurance company should pay or not.

Rights May Vary

Depending on the state you live in and the type of plan you have, your rights may vary. In certain states, some group plans may require more than one level of internal appeal before you can get an external review.