The unavoidable news of the past year has informed us that health reform is set in stone, and much will change in the insurance marketplace in the coming months. Come October, there will be a government-run competitor for private health plans, and applying for a January 1, 2014 effective date will be treated much differently than where we are currently. Significant changes are underway.
Having just applied for several plans myself, curious to see if I would be declined, I discovered how little a state’s look-back period actually counts to an insurer, as they can look back ten years into your history if they choose. Underwriting guidelines often transcend state laws, in that case especially, labeling people like myself with a pre-existing condition. This confirmed my expectation of needing 5 more months without insurance before I can sign up for the final laps of the temporary federal risk pool.
As I work for a brokerage of private health plans, I would love to support the industry, but they clearly would not love to support me (despite my flawless health of more than two years – longer than my state’s look-back period). Once the federal law comes into play, this will no longer be an issue – look-back periods, declines, rate-ups, and the like will be banned. I am rather interested to see how astonishingly different the same applications I just filled out will look in a few months.
Which brings me to the point: what exactly will change for private health insurers in 2014 under the Affordable Care Act?
Applying for Health Insurance in 2014
Like it or not, the ACA is happening and it’s bringing everyone who needs coverage with it, thanks to the individual mandate’s penalty fee threat. As the law is being finalized and prepared for implementation, it strongly resembles what we’ve heard all along: non-discrimination in underwriting for conditions, age (somewhat), and gender, and more benefits under private plans.
Here are the basics of the new underwriting rules for individual and family plans on the private market:
- Premiums cannot increase based on health risks or gender.
- Insurers cannot exclude benefits for certain medical problems or risks.
- Premium rates can be adjusted for tobacco use (up to 50%) and age, however, if you are a smoker and begin a program to help you quit when you enroll, the price increase can be avoided.
- Individuals up to age 21 cannot be rated up, regardless of health.
- Premiums are subject to inflation as age increases for each year after age 21 until they turn 63.
- Individuals age 63 or older are charged the same premium, regardless of health.
- Each state will choose 10 categories of essential benefits to be offered by each health insurer on the private market in their state, making more services available through some, but not all plans.
Though these laws have yet to be finalized, they will likely follow this outline. In order to prepare for the new plans in 2014, it is best to get informed on each your options, private and public, to see what you can afford and get yourself covered – both now and next year. As for me, I’m waiting for these new rules to become effective so I can get a decent health plan and sleep soundly at night.