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Health Reform Law at 6 Months: What Changes Go Into Effect Now?

The health reform law hits its six-month anniversary Thursday, putting a first round of new consumer-protection provisions into effect.

Below is a recap of the provisions that are about to go into effect, who they impact, and when consumers will see the changes:

What is changing on Sept. 23?

  • No more rescissions: Insurers will no longer be allowed to revoke patients’ coverage after they become sick. Insurers can still cancel coverage based on fraud or abuse, but they can’t comb through records looking for minor errors as an excuse to revoke coverage.

  • No more lifetime limits on coverage: Insurance policies will no longer be allowed to include lifetime dollar limits on coverage — so a person who becomes seriously ill won’t “run out” of insurance.

  • Higher annual limits on coverage: Plans will still be allowed to place annual dollar limits on coverage, but those annual limits must be at least $750,000. Annual limits will be banned completely by 2014.

  • Ban on denying coverage to children based on pre-existing conditions: Insurers will no longer be able to exclude children age 18 and under from health insurance plans based on pre-existing conditions.

Young adults can stay on their parents’ plans: Young adults will now be allowed to remain on their parents’ health insurance until age 26 — even if they are married or are no longer a student.

  • Free preventive care: New policies must cover preventive care — such as immunizations, mammograms and colonoscopies — without charging a deductible or co-payment.

  • Access to ob-gyns: Women must be allowed to see in-network ob-gyns in their plans without needing a referral from a primary care doctor.

  • Access to emergency care: Insurers cannot charge customers more for using out-of-network emergency room services, or require people to get pre-authorization for emergency care.

  • New appeals process: Insurers have to implement new, more consumer-friendly claims appeals processes, including a method for submitting appeals to a third-party evaluator that could override the company’s internal decision.

Will all insurance plans reflect these changes immediately on Sept. 23?

No. The provisions will go into effect for plans issued or renewed after Sept. 23. So you’ll see the changes the next time you buy a new plan, or when your new policy year begins. For many large employers, that’s Jan. 1. For others, it could be sooner or later than that.

Are there any exceptions to some of these rules?

Yes. Some of the changes will not apply to “grandfathered” plans — plans that existed before the law was signed on March 23 and that haven’t made significant changes since then. This is particularly true for individual insurance plans. For both group and individual grandfathered plans, the changes providing free access to preventive care and expanded access to ob-gyn’s and emergency care will not apply. Individual plans that are grandfathered do not have to accept children regardless of pre-existing conditions, and also do not have to comply with the new $750,000 minimum for annual limits.

Even if your plan is a grandfathered one, however, there’s a good chance it won’t stay that way long. That’s because in order to keep the status, the plans cannot make any significant changes, such as raising premiums, co-pays or deductibles.

“Over time plans are going to need to do those things to keep up with inflation,” says Sara Collins, vice president of the Commonwealth Fund. By 2013, she says, the government estimates that 60 percent of large employer plans and 45 percent of small employer ones will lose their grandfathered status.

How many people will be affected by these changes?

The government estimates that more then 20,000 people lose their insurance when they hit their lifetime limit on coverage each year (about 102 million people have such limits). More than 10,000 people lose their coverage due to rescissions, which will now be banned. More than 72,000 children will gain access to insurance — and 90,000 more will gain access to insurance that doesn’t have any exclusions — because of the ban on denying children with pre-existing conditions.

The government also estimates that up to 88 million people will be affected by the provisions that mandate free access to preventive care, more access to emergency care, and a more extensive appeals process.

These numbers all come from estimates prepared by the Department of Health and Human Services as part of regulations issued for the new law.

What’s next?

The provisions are among the first major changes of the health reform law, but they’re just a first step. More provisions will phase in over the next three years, and the major changes that will restructure the health insurance marketplace and require almost everyone to carry coverage will go into effect in 2014.

Where can I learn more?

The Kaiser Family Foundation and the government’s own healthcare.gov Web site have detailed timelines of the coming changes.

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