So far in our series about the Affordable Care Act (ACA), we have provided an overview in Part 1 and reviewed the benefits of Pre-existing conditions and continuing coverage for kids under their parent’s plans. This law is a complicated one, with over 2,700 pages. It is the goal of this series to explain the more common provisions in a simple and logical way, so you do not have to read the entire law. In Part three, we will look at the following provisions: no cap on lifetime benefits, and preventative care benefits.
No Lifetime Limit on Coverage
Most health insurance plans, either private or through employment, have a limit on the amount of coverage for each person. Often, that limit is between one million to two million dollars. This is an average, and can be more or less depending on the health insurance plan. When you reach that limit, you no longer have coverage. If you or your kids have a rare illness like hemophilia, or rare form of cancer, you can reach the limit fast. Once you do, you have to pay for your care out of your own pocket.
Congress set out to end this within the ACA law. Now there will be no limits on coverage. If you have a rare disease or other health care problem that costs five million dollars, then the insurance company must pay it. While there are no official statistics on people that reach and exceed lifetime limits, it takes only a few people with news stories of their plight to make this a popular provision of the law. It is hard to argue against.
The primary result of this policy is higher premiums. On one hand are the very real costs of paying the additional medical bills of people who would have reached and passed a limit. Not many people do, but that is not the issue. The insurance company must factor in the costs of additional expenses for everyone. That is how they figure out risk and determine appropriate rates: by using actuaries and high level math to determine risks, average costs, etc. When their expenses for payouts go up, their rates must go up as well. It is simple to say, “They should just eat the expense for the good of people over profits,” but without profits there is no company to pay any premiums.
On the patient side, you will no longer have to worry about being wiped out by an illness. If you can afford the premiums for coverage, then you will not have to stress over possible high health care costs.
A more subtle implication is the continuing argument over how much are and should people be responsible for their decisions. As we will discuss in detail in the section on preventative care, no limits are another barrier to people understanding health care costs, and being responsible. Often, insurance plans have riders that allow individuals to purchase a higher limit amount, and people decline to do so.
They see two million dollars, and think “Hey I’ll never have that many doctor visits.” Then, the illness hits and it is too late. Sometimes people are innocent victims of fate, other times they are the victim of their own choices. As laws take more and more responsibility away from individuals in different areas, there is the real effect of people being more irresponsible.
If you have caught even a slight amount of news about the ACA law, then you have probably heard supporters of the bill tout this benefit. Beginning in section 4,000 of the law, a host of preventative services are now covered under the law at no co-payment.
The number of services covered are too numerous to fully list here, but include things like disease screenings, mental illness screenings, immunizations, and most controversial presently, birth control and sterilization procedures. Many of these services were covered under current plans offered for sale or through employers, but now they must be covered at no co-payment to the insured.
The primary idea behind covering preventive care in a comprehensive manner is the fact that the best way to keep costs down for serious illnesses is to not get sick. If individuals take better care of themselves, get regular checks-ups, and prevents illness, then over time health care costs will go down, and then premiums will go down. The problem, however, is that you cannot make people go to the doctor. Many insurance plans already cover items of preventative care at no cost, or very low co-pays.
Many offer lower premiums for things like joining a gym, or joining wellness programs. Yet, people still do not take better care of themselves. You cannot make people go to the doctor, get checks-ups, or engage in wellness programs. By making them free, you have just taken any incentive or responsibility out of their hands.
When you divorce people from real costs, they do not worry about costs. When you make something free that they were not planning to do anyway, then all you have done is raise the costs of premiums, because these services must be covered. By making all sorts of preventative services covered, both the practical like immunizations and the esoteric like fully funded wellness centers, you increase costs.
The other implication is that the Obama administration has set up a coming legal war over the issue of birth control. By mandating that religious organizations must cover birth control, they have impended, many feel, on the rights of the religious. Birth control is a personal choice, but the ACA has made it everyone’s business because it requires everyone to pay for it.
The crux of the situation is simple, should you have to pay for your neighbor’s choices? If you are an employer, religious or otherwise, should you have to pay for the choices of your employees? The ACA says yes, and many organizations will be fighting this provision.
The next part of our series will explain provisions requiring equal premiums for women, and mandates dictating how much insurance companies must pay in health care expenses. These are two of the more controversial provisions with wild and inaccurate statements flying in the media. Tune back in to get the real facts on these two provisions of ACA.