As with many Southern states, Alabama’s health insurance laws have been restrictive at best, making it difficult for many to get insured for a fair cost. Individual plans can increase rates based on your health status, gender, occupation, age, and tobacco use, making the margin for error quite small. Healthy people have been able to access insurance through the Alabama individual market, and those who get declined have had the right to coverage through a risk pool. Rights as a policyholder, regardless of your health plan type – individual, group, or risk pool – include being able to make a complaint to your insurer and filing appeals on denied claims. Other rights include guaranteed renewability, state-mandated benefits, and continuation of coverage for certain policyholders.
In Alabama, the laws and permissions surrounding pre-existing conditions have been some of the most harsh in the nation, which will change with the Affordable Care Act. Many of the laws that have benefited Alabama insurance companies and keep their costs down will be eliminated for the sake of equality in coverage. Private health insurers will have to adjust their underwriting process to be in compliance with federal laws, though until 2014, they are allowed to adjust rates, decline people coverage, and make other decisions based on risk. Prior to applying for coverage, it is important to be aware of several key laws in Alabama insurance.
Alabama, and every other state, are held accountable by federal law to offer to renew your plan at the end of each year. In doing so, the health insurance companies make sure you stay covered and keep your benefits without any breaks. Additionally, this provision makes it impossible for insurers to cancel your coverage due to illness while you are already insured. Unless you commit a crime against your health plan, such as lying on your application or not paying premiums, you will be able to keep your benefits under this law. Being able to continue your coverage for another year is guaranteed, but your rates may adjust due to filing a claim, getting sick or injured, or anything else that may elevate the risk of future claims.
Insurers in the state of Alabama are required to offer coverage to children up to age 18 with pre-existing conditions, regardless of their health status. While this law will not take effect for adults until 2014, child dependents on individual health plans cannot be turned down. Premiums have been able to increase based on their health problems, which could cause problems in being able to afford to cover your sick child, though this will also be eliminated by 2014.
When underwriting for health plan applicants with conditions, the state of Alabama permits insurers to look back 60 months into your medical history, and define conditions however they please. Alabama insurers are also permitted to issue exclusion periods of up to 24 months after accepting an applicant with a condition, which exempts them from paying for any condition-related care. Insurers may also issue an elimination rider doing the same for an indefinite amount of time, or however long they choose. Unlike some other states where you can use previous coverage to pay for care during your exclusion period, Alabama does not offer this option, leaving sick people to pay out-of-pocket for all services connected to that need.
Whether you have a group or individual plan, private insurers are required to cover a few benefits when medically necessary or recommended as a preventive service. Under the ACA, there will be additional types of mandated benefit categories to ensure coverage for a broad cross-section of services. Currently, the state of Alabama is required to offer the following benefits to policyholders, in certain cases, though not all health plans. If you have a limited benefit plan, it is unlikely you will have coverage for these, yet if you’re covered by a comprehensive plan, you have a better chance of getting covered for these services. Always check your health plan’s schedule of benefits and list of exclusions to find out what your plan includes.
- Breast reconstruction
- Maternity care and hospital stay
- Mental health care
- Off-label drug use
- Prostate cancer exam
- Substance abuse treatment
1. Henry J. Kaiser Family Foundation. Individual Market Portability Rules (Not Applicable to HIPAA Eligible Individuals): Alabama.