The Obama Administration released information on future rules for insurers and employers yesterday, revealing how the Affordable Care Act will impact various aspects of insurance. Beginning in 2014, three main rules will be integrated into the underwriting process, all of which ring true to the original pages of the many-times-revised law.
These proposed rules address the requirement for health insurance companies to accept all individuals for health plans, regardless of their health, gender, or occupation. In addition to the expected rules set out by the ACA, there are additional rules sorting out premium rates and their variation based on factors like tobacco use and age. For tobacco users, the proposal clears a path for lower premiums by way of participating in programs to quit smoking. Those who take part in these programs will be relieved of additional premium costs for tobacco users established by the law.
The new regulations addressed yesterday include rules on essential health benefits, premiums, and wellness programs for group policies.
Essential benefits for individual health insurance are still due for the inclusion of 10 categories of services, as initially stated. These categories are types of care such as emergency services, vision care, maternity coverage, inpatient hospital stays, and mental health care. States will still have the option to choose their own combination of which benefits they will make mandatory. This will be mainly judged on what is already successful among their state’s best health plans.
The way premiums are handled will greatly affect the individual market. Rates currently are allowed to increase for health risks, women, smokers, and according to age. Insurers will now only be able to rate up for age and tobacco use. The proposed rules state that insurers can raise a tobacco user’s premium by 50 percent. However, if an applicant attempts to quit, they can avoid the increase.
Also, premiums cannot be adjusted for individuals under age 21, according to the proposal’s new rules. Over age 21, increases may occur for each year until a person turns 63, and all individuals over 63 would pay the same rate. As it stands currently, insurers rate on age in a several year grouping, which is usually five or ten years where the rates stay consistent.
Greater freedoms for states and insurers to offer different deductibles, copays, and other health plan attributes are also mentioned in the proposal. As long as the main idea of the policy matches the federal requirements of minimum actuarial value, they can get creative.
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