Indiana policyholders, officials and insurers have watched health insurance change under the Affordable Care Act since the bill was signed in March 2010. This federal law has made many adjustments to Indiana health insurance, impacting most of the population, whether you’re covered by a group health plan or Medicare, or simply uninsured. While some regulations may have passed under the radar for some Americans, others have felt some relief or frustration from the ACA. As a largely conservative state, Indiana took the two Republican options of choice for state-level implementation: allowing federal agencies to operate the state’s health insurance exchange, and leaving the state’s Medicaid program guidelines as-is. As a result, thousands of low-income residents lost an opportunity to get insured through Medicaid, yet low-to-moderate income individuals can apply for marketplace plans with significant tax credits to offset costs.
As the law emphasizes the equality of the American people as insurance policyholders and patients who are entitled to certain rights, a number of insurer freedoms were eliminated. The underwriting process has been changed to not include a medical history or discriminatory rate adjustments. Consumers who purchase coverage are now able to hold onto their plans, and receive better quality coverage at a fair cost. In the process, taxes have been adjusted, insurance companies have lost some internal funding, and hospitals have experienced some losses. Despite the transitional downsides, the law aims to achieve better balance in medical spending, health status, higher quality healthcare and affordability.
Health Reform in Indiana: 2010-2013
Indiana insurers are currently regulated by the medical loss ratio, which establishes limits for company spending of premium income to 20 percent. The remainder of income must go towards the betterment of programs and services offered to policyholders, and if it does not, the health plan must send out rebate checks or decrease rates for the next year. Most Indiana private insurers chose the rebate option, sending out an average of $99 per insured family in 2012. In the fall of each year, rebate checks will be sent to policyholders if an insurance company does not comply with the 80/20 rule.
Additionally, insurers are no longer permitted to set a lifetime maximum for benefits, which affects mostly sick policyholders on group plans. Healthy people usually do not reach several million dollars in healthcare in a lifetime, therefore this was designed to help those in need of care and treatment. After 2014, individual policies who accept people with conditions will also apply this rule. Annual benefit limits have been increased each year in order to remove that health plan feature, as well.
Premiums are more closely regulated under the new law, making it difficult for insurers to increase their rates by more than 10 percent in one year. If so, the company is subject to public reason and must explain their case.
More services have more coverage under the ACA, with preventive care covered in full with any health plan. When receiving services like a flu shot or mammogram with a network doctor, you are not required to pay a copay, coinsurance, or deductible. Additional services were added to the federal government’s list of required prevention since the ACA became law, as well, providing cancer screenings, prescriptions, prenatal care, and other types of care for women, especially, for free.
Young people in Indiana have had their insurance secured until age 26 if they are a dependent on a parent’s plan through this law. A crucial provision, this action provided coverage to 62,000 more Indianans within one year, from 2010 to 2011. While this is a lower-risk population than others, the continuation of dependent coverage rule has proven an effective move for health reform. Also, children with pre-existing conditions up to age 18 have been able to obtain coverage through any insurer. Under the law known as Obamacare, no insurer can decline coverage to a child, regardless of their health status.
Health Reform in Indiana: 2014 and Later
January 1, 2014 brings the beginning of more significant health reforms, including drastic changes to the individual insurance market. The ACA makes it possible for all Indiana residents to obtain coverage through the insurer of their choice without discrimination for pre-existing conditions. Insurers are not permitted to decline applicants for any reason, which makes it easier for people to get insured and receive the care they need. Health plans also cannot increase premiums, exclude benefits, or issue elimination riders when taking on sick policyholders. Premium rates cannot increase based on a person’s gender, health, or job description, only for age group and tobacco use.
Insurers are required to cover various groups of services as defined by the law’s essential health benefits in some of their plans. Certain health plans do not have to include these benefits, but comprehensive ones matching the plans sold on the exchange will provide such coverage. As defined by the HHS, essential benefits include prescriptions, pediatric care, rehabilitation and habilitation, prevention, and maternity and newborn care, among other types of care.
Along with the changes to individual insurance is a new facet of the private individual market: the marketplace. The Indiana health insurance exchange offers health plans for individuals and small businesses with financial assistance for those who earn between 100-400 percent of FPL. Tax credits make marketplace coverage more affordable through any participating insurer, and can be applied towards monthly premiums or cost sharing for those with a lower income. If an applicant can’t afford the marketplace, even with cost reductions for premiums and cost sharing, they can find out if they qualify for Hoosier Healthwise or other Medicaid programs.
With these new options for coverage, Americans are encouraged further to get insured by the individual mandate. This part of the law requires all Indiana residents who can afford coverage to buy a health plan or pay a penalty each year. Tax forms request health insurance details starting in 2015, and uninsured taxpayers are charges a certain amount based on income. If you are too poor to purchase insurance, you do not have to pay a penalty though you are encouraged to enroll in Medicaid if you qualify.
Indiana Medicaid would have covered a larger number of Indiana residents if the state accepted Medicaid expansion, adding adults without children as an eligibility group. However, the program will continue to only support children, families, elderly and disabled persons with limited income. Indiana may come up with an option for people with low income that do not qualify for the state’s free insurance program, though it is yet to be decided.
1. Healthcare.gov. How the Health Care Law is Making a Difference for the People of Indiana.
2. Henry J. Kaiser Family Foundation. State Exchange Profiles: Indiana.