Alabama took the same course as many conservative states when implementing health reform, including defaulting to a federally-run health insurance exchange and not expanding Medicaid. However, the state had made plans to establish its own exchange prior to November 13, 2012. The then-Governor created the Alabama Health Insurance Exchange Study Commission in order to suggest how implementation of an exchange would be possible. Following three months of work in November 2011, the Commission proposed the Alabama Health Insurance Marketplace to the Governor, supporting its creation. Governor Robert Bentley (R) also threatened to veto a bill which would create a state exchange in May 2012, before the Supreme Court’s ruling of Obamacare as constitutional. This bill was a failure, however, as was a comparable bill from the previous year.
While there may be some resistance to the Patient Protection and Affordable Care Act in Alabama, the law will continue to change the state’s insurance market for years to come. This includes many provisions addressing consumer rights, equality, and simplified access to care and coverage. Some are skeptical the law won’t able to successfully match its large ambitions for reforming the national healthcare system, yet as a federal law, every state is required to take the risk. This includes allowing millions of people into the private health insurance market who were previously unable, as well as creating the exchanges to connect people with private health plans at an affordable cost. To get a better grasp on the changes that have already taken place and will continue to affect Alabama, here is an assortment of ACA provisions.
The ACA in Alabama: 2010-2013
Changes in Alabama that took place during Obamacare’s transitional period include various limitations on insurance companies. The medical loss ratio established a percentage of premium income a carrier can spend on internal costs such as bonuses and company perks (15-20 percent), and requiring companies spending the majority on optimizing services for members. Insurers are required to meet this rule, or they have two options: reduce premiums or refund policyholders. In 2012, most insurers chose the latter, providing an average rebate of about $518 per family on a private health plan in Alabama.
Private insurers are also not permitted to increase premiums by more than 10 percent, or they have to publicly justify their decision. Through the ACA, there is no more limit on the amount of covered benefits you receive in a lifetime, and annual benefit maximums have also been changed, to be removed by 2014. For insured Alabamians treating cancer, HIV/AIDS, and other chronic illnesses, this is a great advancement, as they can stay covered without worrying that they have maxed out their health plan.
Insurers in Alabama are also required to cover preventive care at 100 percent to all policyholders seeking in-network care. This allows people of all ages to get the services they need to stay healthy and avoid illnesses for which they are at risk due to age, gender, race, or other reason. Approved preventive services include well-child care, immunizations, certain prenatal exams, as well as screenings for cervical, breast, prostate, and colorectal cancers, and contraceptives as of August 2012.
Pre-existing conditions are regarded by insurers unlike before, as they must accept children with illnesses. If your child is age 18 or younger and has any sort of pre-existing condition, they must be sold a policy. The ACA also established a temporary high-risk pool in the state to keep adults with health problems insured until the laws change, the Pre-Existing Condition Insurance Plan. Providing comprehensive coverage to uninsured, sick adults, PCIP served as a temporary and functional program for those enrolled from 2011 to the beginning of 2014.
Especially helpful during a recession, the health reform law also made it possible for young adult dependents to stay on their parent’s plan until age 26. As one of the most instantaneous, positive outcomes of the ACA, this rule insured 49,000 people in Alabama within one year of implementation, from 2010 to 2011. This law continues to help young people nationwide, totaling 11.7 million more insured 19 to 25-year-olds between 2010 and 2012.
Alabama Health Reform: 2014 and Later
2014 is the big year for this law, making its effects much more noticeable for all Americans. A main component is the individual mandate, which requires all Alabamians to obtain insurance or otherwise pay a tax on being uninsured. If your income is low enough and your religion is strict enough you may be able to evade the penalty and remain uninsured for free, however. The federal government has made many changes to health insurance, making it easier for people to get covered, therefore, this mandate is included to remind you of your new freedoms.
If you choose to get coverage, you have a wider array of options than before due to the exchange, and in general if you happen to have a colorful medical history. People age 19 to 64 with pre-existing conditions are able to purchase coverage through any individual health insurer in Alabama without being rejected, rated up, or having benefits excluded as of January 1, 2014. At that point, insurance companies also must price premiums fairly for gender and industry, as well. Premium rates will only increase based on your age and use of tobacco products.
A minimum of ten essential health benefits are a requirement for individual health plans on and off the exchange. These categories of coverage include prevention and disease management, maternity and newborn care, pediatric care, hospitalization, prescriptions, and emergency care. The Alabama Health Insurance Exchange provides necessary coverage to individuals and families at a reduced rate for subsidy-eligible members. Alabama’s exchange is operated by the federal government, with plans sold by private insurers.
Plans purchased through the marketplace are made affordable with subsidies, allowing certain income level applicants to reduce their premiums and cost sharing. Subsidies are offered to those who earn between 100 and 400 percent of the poverty line, lowering costs based on essentially a sliding scale system. Those who earn up to 250 percent of poverty receive a larger tax credit for both premiums and medical costs, while income up to 400 percent of FPL may qualify for a premium tax credit. Exchange plans must cover at least 60 percent of medical costs so that members have a smaller share of costs.
Alabama did not expand its Medicaid program under health reform, which creates an issue for those who are ineligible for subsidies or Medicaid, as they will remain uninsured. Alabama Medicaid continues to serve the same populations: low-income families, children, and SSI beneficiaries after 2014, unlike other states who have chosen to insure childless adults, also. This is a very large population, and the state believes it will be too costly to cover each of these individuals.