Obamacare: What the 10 Essential Health Benefits mean for your bottom line

Barack Obama signs the Patient Protection and Affordable Care Act at the White House. March 23, 2010. Photo by Pete Souza.

Barack Obama signs the Patient Protection and Affordable Care Act at the White House. March 23, 2010. Photo by Pete Souza.

By Savannah Marie
@savfmarie

One of the most frequently quoted sound bytes about the Affordable Care Act is that people who are happy with their current insurance plans will be allowed to keep them, but that didn’t turn out to be the case.

Hundreds of thousands of people in the U.S. are now receiving notices that their current health policies are being unceremoniously canceled because they do not meet the requirements of Obamacare — specifically, the 10 Essential Health Benefits. Given how vehemently the president maintained that this wouldn’t happen, many people are scratching their heads in confusion.

Whats the Story?

Under the new health care law, many policies currently available on the individual market do not adhere to the terms of the law: namely, it is the 10 Essential Health Benefits that are in question here. A good example is that health policies are now required to provide for the coverage of maternity care. Plans that don’t adhere to this requirement can no longer be sold. Therefore, under the terms of the new law, Americans everywhere are being forced to change their plan, despite assurances that they wouldn’t need to.

Of particular interest are the “grandfathered” plans. These plans, while they don’t strictly adhere to the new law’s guidelines, existed prior to the health care law and so had been expected to stick around so long as the insurance companies didn’t change them that much. However, even insured Americans with grandfathered policies are now facing cancellation. As reported by NBC, it is estimated that somewhere between 7 to 12 million people will not be given the option to renew their current coverage.

What Are the Essential Health Benefits?

The short answer is: the states get to decide.

Obamacare has deferred certain details of future health policies to the states. While the language of the law provides for certain fundamental requirements, state governments will decide for themselves what benefits their health plans will cover, with the caveat that they adhere to the new guidelines. The challenge, then, is to create health plans that are both comprehensive and affordable – a veritable catch-22.

Many states currently require health policies to provide coverage for rehabilitation services, as it is included in the 10 essential health benefits. This benefit was rarely covered by policies before the implementation of the ACA. Additionally, fifteen states require coverage for infertility treatments. This can be expensive; on average, in-vitro fertilization costs around $12,400. The costs of these services are essentially shared by all of the insurance subscribers, thereby driving up the cost of the plan for everyone. 

What Does This Mean for Health Subscribers?

Many state governments are likely to be enthusiastic about the provisions of the Affordable Care Act. They have been granted leeway to create their own essential benefits package (again, within the language of the law), and anything that’s mandated above their own benchmark gets paid for by the federal government. It’s not a bad deal.

Consumer groups are going to be somewhat less pleased. They recognize that in passing the buck to the states, the federal government is side-stepping the responsibility of coming up with their own essential benefits package. Instead of working with one benefits package across 50 states, now 50 individual battles will be waged, further complicating an already labyrinthine suite of laws.

More importantly, however, is the ultimate impact on the average health care subscriber. Unfortunately, predicting this will continue to be one of the more difficult things to come to terms with in the new law.

Depending on your media outlet of choice, you’ll hear one of two different stories: a married fifty-something man will see his health insurance premiums fall dramatically, or you’ll hear about a single twenty-four year old whose premiums have doubled. The variation among Americans is really quite extraordinary.

That said, those who have heretofore had bare bones coverage will find themselves much better equipped to deal with difficult health concerns. A report from 2011 found that over 60 percent of health plans on the individual market did not cover maternity care. Nearly 20 percent didn’t cover mental health benefits, and 9 percent had no coverage for prescription drugs. Under Obamacare, insurance plans are required to cover all of the above.

Even so, health subscribers everywhere are decrying the law as a challenge against their right to take their own health – and their financial wellbeing – into their own hands.

For anyone who’s wondering what the new plans will cost them, the good news is that financial help will be available to assist with the purchase of a more comprehensive insurance policy. Anyone who earns below 40 percent of the federally-defined poverty line can make use of a tax subsidy to help them afford their new health plan.

The full picture of life under the Affordable Care Act continues to coalesce into something that the average American citizen can understand. However, for now, there are no simple answers. Many Americans will find themselves better insured than they were before Obamacare, but their out-of-pocket costs may well be much higher. Others will still find identical coverage at higher prices, while another group will pay less than they ever had for health coverage.

Here’s the bottom line for now:  The health care plan that you’ve had for years and you’ve been perfectly happy with? Don’t get too attached.

Posted by on November 7, 2013. Filed under National Politics,Recent News,Top News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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