Consumer Protections
According to the Census Bureau's latest numbers, 36.6 million people were uninsured in 2000, and in 2010, that number increased to 49.9 million. While the overall population grew from 279.5 million to 306.1 million during that the same time period, the number of people with job-based health insurance dropped from 181.9 million to 169.3 million—a decrease of almost 10 percent. The Affordable Care Act (ACA) has been designed to begin to put the American people back in charge of their healthcare by implementing the most sweeping healthcare reform in US history.
At a Glance
At a Glance
The ACA increases the affordability and accessibility of health coverage and puts the consumer back in charge of their healthcare.
This section provides an overview of key Consumer Protections created by the ACA. Click on the following for more information:
- No Arbitrary Rescissions of Coverage
- Pre-existing Condition Coverage for Children
- Pre-existing Condition Insurance Plan
- Young Adults Coverage
- Ban on Annual and Lifetime Limits
- Limiting Premium Variation
- Premium Increase Review
- Most Premium Dollars Must GoTo Healthcare
- Protecting Your Choice of Doctors
- Out-of-Network Emergency Care Access
- Transparency Regarding Your Healthplan Practices
- Guaranteed Availability of Insurance
- Essential Health Benefits
- Prevention
No Arbitrary Rescissions of Coverage
Because of the ACA, insurance companies can no longer rescind your coverage (declare your policy invalid from the day it began) simply because you made an honest mistake or left out information that has little bearing on your health. This provision applies to health plans with plan years or policy years that begin on or after September 23, 2010. To find out when your plan year or policy year begins, ask your insurer or plan administrator.
- This provision applies to all health plans, whether you get coverage through your employer or purchase it yourself.
- Your insurance company can still rescind your coverage if you intentionally put false or incomplete information on your insurance application, and it can cancel your coverage if you fail to pay your premiums on time.
- Your insurance company must give you at least 30-days notice before it can rescind your coverage, so that during that time you may be able to appeal the decision or find new coverage.
Preexisting Conditions Insurance Plan
Starting July 1, 2010, Americans locked out of the insurance market because of a pre-existing condition can begin enrolling in the Pre-existing Condition Insurance Plan (PCIP). Go to the section on this website entitled "Pre-existing Condition Insurance Plan" for more information.
Preexisting Condition Coverage
New regulations under the ACA prohibit insurance plans from denying coverage to children based on a preexisting condition effective September 23, 2010. Beginning in 2014, this ban from excluding coverage for preexisting conditions will extend to all individuals regardless of age. This provision includes both benefit limitations and outright coverage denials. Go to the section on this website entitled "Coverage for Pre-existing Conditions" for more information.
Young Adults Coverage
Starting September 23, 2010, children will be allowed to stay on their parent's family policy, or be added to it up to the age of 26. Many insurance companies and employers have agreed to implement this program early, to avoid a gap in coverage for new college graduates and other young adults. Go to the section on this website entitled "Adult Children's Coverage" for more information.
Ban on Annual Dollar and Lifetime Limits
Millions of Americans who suffer from a catastrophic event or chronic medical conditions are in danger of losing their health insurance coverage when the costs of their treatment hit annual or lifetime limits set by their insurers. The ACA prohibits the use of lifetime limits in all health plans and insurance policies issued or renewed on or after September 23, 2010.
The ACA will also phase out the use of annual dollar limits over the next three years until 2014 when they are banned for most plans. Plans issued or renewed beginning September 23, 2010, will be allowed to set annual limits no lower than $750,000. This minimum limit will be raised to $1.25 million beginning September 23, 2011, and to $2 million beginning on September 23, 2012. These limits apply to all employer plans and all new individual market plans. For plans issued or renewed beginning January 1, 2014, all annual dollar limits on coverage of essential health benefits will be prohibited. These rules apply to all insurance plans except for individual market plans that are grandfathered.
Limiting Premium Variation
The ACA establishes guidelines for how premium rates are calculated for health insurance coverage offered in the individual or small group markets. Premium rates will vary for risk-adjustment on a limited basis only by age, family status, tobacco use, and geographic area. For example, variances in premium rates exist for:
- Plan coverage: the premium rate for individuals is typically lower as compared to the rate for a family plan.
- Geographic area
- Age: premium rates increase with age but the maximum allowable variance due to age is 3:1.
- Tobacco use: can increase the premium rate by a maximum of 50%.
Premium Increase Review
Annual premium hikes can put insurance out of reach of many working families and small employers. The Department of Health and Human Services (HHS) recently offered States grant funding to strengthen review of insurance premiums. California is using these new Federal funds to improve insurance oversight and to require more transparency of insurance companies' requests to raise rates.
Most Premium Dollars Must Go To Healthcare
Beginning in January, the ACA requires individual and small group insurers to spend at least 80% and large group insurers to spend at least 85% of your premium dollars on direct medical care and efforts to improve the quality of care you receive – and rebate you the difference if they fall short. This will limit spending on administration and profits and provide new transparency into how your dollars are spent. Insurers will be required to publicly disclose their rates on the national consumer website – www.HealthCare.gov.
Protecting Your Choice of Doctors
The new rules make clear that health plan members are free to designate any available participating primary care provider as their provider. The rules allow parents to choose any available participating pediatrician to be their children's primary care provider. And, they prohibit insurers and employer plans from requiring a referral for obstetrical or gynecological (OB-GYN) care. All of these provisions will improve people's access to needed preventive and routine care, which has been shown to improve the health of those treated and avoid unnecessary healthcare costs. These policies apply to all individual market and group health insurance plans except those that are grandfathered.
Out-of-Network Emergency Care Access
Health plans and insurers may not charge higher fees when emergency services are legitimately obtained out of a plan's network. The rules also set requirements on how health plans should reimburse out-of-network providers. This policy applies to all individual market and group health plans except those that are grandfathered.
Transparency Regarding your Health Plan Practices
Transparency into the practices of health plans is increased in several ways. Two of them are listed below:
- Data will be collected and trends identified from complaints filed through State-managed Consumer Assistance Programs (CAPs). More information about California's CAP is provided below.
- Tools will be available through State-managed Health Benefit Exchanges to compare benefits, pricing and quality. Go to the section on this website entitled "Health Benefit Exchange" for more information about these tools.
Before the Affordable Care Act, you often had to fend for yourself when trying to find affordable health insurance or resolve problems with a health plan. With additional funding provided by the ACA, California's Consumer Assistance Program (CAP) helps you enroll in health coverage, get educated about your rights and responsibilities, and file complaints and appeals about decisions made regarding coverage.
The $3,400,000 provided by the ACA to enhance services offered by California's Consumer Assistance Program is being used to:
- Develop and promote a coordinated consumer-friendly website and corresponding toll-free number that consumers can call with questions about healthcare coverage, and to receive assistance with the filing of complaints and appeals.
- Conduct a statewide media campaign, in partnership with consumer organizations, to educate consumers about their rights and responsibilities and to provide assistance with enrollment in group health plans or health insurance coverage.
- Evaluate the effectiveness of the initiatives, and collect, track and quantify consumer problems and inquiries for reporting to state and federal policymakers.
The CAP in California is called the California Help Center and is operated by the California Department of Managed Health Care:
California Help Center
980 9th St, Suite #500
Sacramento, CA 95814
(888) 466-2219
Guaranteed Availability of Insurance
The goal of the ACA was to make affordable healthcare coverage available to all Americans. Several provisions are being phased in between now and 2014 that will ultimately ensure that health insurance coverage will not be denied to anyone based upon:
- Health status
- Medical condition (including both physical and mental illnesses)
- Claims experience
- Receipt of healthcare
- Medical history
- Genetic information
- Evidence of insurability (including conditions arising out of acts of domestic violence)
- Disability
- Any other health status-related factor determined appropriate by the Secretary
Beginning 2014, all Americans will have access to affordable coverage through Competitive State-based Health Benefit Exchanges. These Exchanges will give individuals and small business owners access to private insurance at rates comparable to those charged to large employers. The Congressional Budget Office (CBO) projects that individual premiums will drop by 14 - 20%.[i] Go to the section on this website entitled "Health Benefit Exchange" for more information.
Essential Health Benefits
The plans participating in the Health Benefits Exchange will include HMO, PPO, and fee-for-service health plans. All plans participating in the Exchange must provide the minimum "essential benefits" including:
- Outpatient patient services
- Emergency services
- Hospitalization
- Maternity and newborn care
- Mental health, substance abuse, behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services
- Chronic disease management
- Pediatric services, including oral and vision care [ii]
Go to the section on this website entitled "Health Benefit Exchange" for more information.
Prevention
The ACA is helping the American people stay healthy through investments in preventive and primary care. New health plans must cover recommended preventive services – including mammograms and other cancer screenings, immunizations, pre-natal care, and blood pressure control – without any cost-sharing by consumers. Go to the section on this website entitled "Preventive Care and Screenings" for more information.
[i] Geithner, T., Sebelius, K., & Solis, H. US Departments of Treasury, Health and Human Services, and Labor, (2011). Letter regarding the repeal of affordable health care Retrieved from http://www.healthcare.gov/center/letters
[ii] Piper, K. (2010). State health exchanges and qualified health plans briefing for medicaid health plans of america . Proceedings of the San Diego Webinar, unknown URL slide 12.