Benefits For Consumers In The Affordable Care Act

March 23, 2011 8:50 am ET

March 23rd marks the one-year anniversary of the Affordable Care Act being signed into law, ending some of the worst insurance company abuses and putting consumers, not insurance companies, in control of their health care. Many of the new consumer protections provided by the Patient's Bill of Rights in the new law have already gone into effect, including protecting people with pre-existing conditions and chronic diseases from being at the mercy of insurance companies. The law also prevents companies from dropping coverage when people get sick and from limiting the care they receive. Furthermore, it makes sure insurance companies spend premium dollars on care, not profits, and cracks down on excessive premium rate hikes.

Consumer Protections In The Patient's Bill Of Rights

The Affordable Care Act Ends Insurance Company Abuses Such As Denying Coverage Because Of A Pre-Existing Condition. According to Families USA: "Under the Affordable Care Act, if you have a pre-existing condition, insurance companies will no longer be allowed to deny you coverage based on that condition.  For children under the age of 19, this protection was phased in beginning on September 23, 2010.  For adults aged 19 and older it will be phased in beginning on January 1, 2014. Insurers will have to accept everyone who wants to purchase a plan, regardless of their health status. In addition, health plans won't be able to exclude coverage of pre-existing conditions from their policies.  This means that health plans can't refuse to cover your treatment solely because you already had a health condition when you joined a plan." [Families USA, September 2010, footnotes removed for clarity]

  • 129 Million Americans And Up To 17 Million Children Have Pre-Existing Conditions. From CNN: "[HHS Secretary] Sebelius said 129 million people -- nearly half of all Americans under the age of 65 -- have some form of pre-existing condition that could make them ineligible for coverage should they lose or change jobs, get divorced or face other changes that force them to seek new insurance. That number includes 50 million people with more severe conditions that would almost certainly preclude or significantly increase the cost of individual coverage, Sebelius said...And the agency said between 4 million and 17 million children have a pre-existing condition, and that 2 million of those are uninsured." [CNN, 1/18/11]

The Affordable Care Act Ends Lifetime Limits On Health Care. According to Families USA: "Under the Affordable Care Act, insurance companies will no longer be allowed to set limits on the dollar amount of health benefits that they will cover in a year or over the course of a person's lifetime. This means that you won't run out of coverage if you develop a health problem that is costly to treat. [...] Starting on or after September 23, 2010, insurers will no longer be allowed to stop paying for your care because you have reached a lifetime spending limit. This provision will protect you if you have insurance through your job, or if you purchase a plan directly from an insurance company for yourself or your family." [Families USA, September 2010]

The Affordable Care Act Restricts Annual Limits. According to the National Women's Law Center: "Similarly, health plans face new restrictions on annual limits (the amount of money they will pay for benefits during one year).These limits cannot be lower than $750,000/year starting on September 23rd, with minimum limits increased annually until they are completely prohibited by 2014.  This protection applies to most health plans." [National Women's Law Center, 9/23/10, underline original]

The Affordable Care Act Prohibits Insurance Companies From Dropping Coverage For 'Unintentional Mistakes' On Applications. From HealthCare.gov: "Right now, insurance companies are able to retroactively cancel your policy when you become sick, if you or your employer made an unintentional mistake on your paperwork. ... Under the regulations, insurers and plans will be prohibited from rescinding coverage - for individuals or groups of people - except in cases involving fraud or an intentional misrepresentation of material facts. Insurers and plans seeking to rescind coverage must provide at least 30 days advance notice to give people time to appeal. There are no exceptions to this policy." [HealthCare.gov, 7/1/10]

  • Over 10,000 People Each Year Have Their Coverage Dropped "Because They Get Sick And Made An Unintentional Mistake On Their Application." From HealthCare.gov: "Under the new law ... [a]pproximately 10,700 people whose coverage is dropped each year because they get sick and made an unintentional mistake on their application will not have their coverage rescinded." [HealthCare.gov, 12/9/10]

The Affordable Care Act Gives You The Freedom To Choose Your Doctor. According to Families USA: "Under the Affordable Care Act, if you have private health insurance, whether you have a plan offered through your employer or an individual plan you purchased directly from a health insurance company, you will have greater choice of, and better access to, health care providers. [...] You will have the choice of any primary care provider in the plan's provider network, as long as he or she is accepting new patients like you." [Families USA, December 2010]

The Affordable Care Act Guarantees 88 Million People The Right To Appeal Health Insurance Company Decisions. According to Families USA: "Under the Affordable Care Act, if you disagree with your plan's refusal to pay for care, the plan will have to review its decision. And if you still are not satisfied, you will have the right to appeal that decision to an independent reviewer who is outside of the health plan. [...] These new rights are important: Eventually, they are expected to cover 88 million people. And research shows that consumers who do appeal outside their insurance companies win their cases about 45 percent of the time." [Families USA, December 2010, footnote removed for clarity]

Other Consumer Protections In The Affordable Care Act

The Affordable Care Act Ensures Premium Dollars Are Spent On Care, Not Insurance Company Profits. According to the U.S. Department of Health and Human Services: "Today, many insurance companies spend a substantial portion of consumers' premium dollars on administrative costs and profits, including executive salaries, overhead, and marketing. Under the Affordable Care Act, consumers will receive more value for their premium dollar. New regulations require health insurers to spend 80 to 85 percent of consumers' premiums on direct care for patients and efforts to improve care quality, rather than on administrative costs, starting in 2011. If they don't, the insurance companies will be required to provide a rebate to their customers starting in 2012." [U.S. Department of Health and Human Services, accessed 1/21/11]

  • Medical Loss Ratio Provision "Will Protect Up To 74.8 Million Insured Americans." According to HealthCare.gov: "This regulation will help consumers get good value for their health insurance premium dollar. In 2011, the new rules will protect up to 74.8 million insured Americans, and estimates indicate that up to 9 million Americans could be eligible for rebates starting in 2012 worth up to $1.4 billion. Average rebates per person could total $164 in the individual market." [HealthCare.gov, 11/22/10]

The Affordable Care Act Will Lower Premiums For Families. According to a report from the Commonwealth Fund and the Center for American Progress: "Without reform, premiums are expected to increase from $13,305 in 2010 to $21,458 in 2019.  Relative to this increase, premiums under reform increase only three-quarters as much.  By 2019, family premiums are nearly $2,000 lower.  Adding reductions in out-of-pocket costs and lower taxes for Medicare and Medicaid will result in estimated savings for the typical family of over $2,500 that year." [Commonwealth Fund and the Center for American Progress, "The Impact of Health Reform on Health System Spending" May 2010, emphasis added]

The Affordable Care Act Cracks Down On Excessive Premium Rate Increases. According to the Boston Globe: "The health care overhaul, which aims to provide coverage for millions of uninsured people, created a five-year, $250 million grant program to help regulators challenge unreasonable rate hikes. HHS officials said Tuesday they will consider several factors to decide what constitutes unreasonable. They will examine whether a rate would produce a medical loss ratio, which measures the percentage of premiums spent on medical care, below 80 percent. They also will question whether assumptions that go into the rates are based on substantial evidence. After 2011, the 10 percent increase threshold that triggers a review will be replaced by percentages that are specific to each state. By 2014, states will be able to exclude insurers that show 'a pattern of excessive or unjustified' rate hikes from health insurance exchanges that will become available to consumers, HHS said." [Boston Globe, 12/21/10]

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