New Health Care Consumer Protections Starting This Fall

The new Patient’s Bill of Rights regulations detail a set of protections that apply to health coverage starting on or after September 23, 2010, six months after the enactment of the Affordable Care Act.

Some of the new rules are:

  • No Pre-Existing Condition Exclusions for Children Under Age 19. Each year, thousands of children who were either born with or develop a costly medical condition are denied coverage by insurers. Research has shown that, compared to those with insurance, children who are uninsured are less likely to get critical preventive care including immunizations and well-baby checkups. That leaves them twice as likely to miss school and at much greater risk of hospitalization for avoidable conditions.

The new regulations will prohibit insurance plans from denying coverage to children based on a pre-existing conditions. This ban includes both benefit limitations (e.g., an insurer or employer health plan refusing to pay for chemotherapy for a child with cancer because the child had the cancer before getting insurance) and outright coverage denials (e.g., when the insurer refuses to offer a policy to the family for the child because of the child’s pre-existing medical condition). These protections will apply to all types of insurance except for individual policies that are “grandfathered,” and will be extended to Americans of all ages starting in 2014.

No Arbitrary Rescission of Insurance Coverage. 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.

No Lifetime Limits on Coverage. Millions of Americans who suffer from costly medical conditions are in danger of having their health insurance coverage vanish when the costs of their treatment hit lifetime limits set by their insurers and plans. These limits can cause the loss of coverage at the very moment when patients need it most. Over 100 million Americans have health coverage that imposes such lifetime limits.

Will the Patient’s Bill of Rights affect lifetime insurance limits?

Yes.  Lifetime limits — the maximum amount of money that policies pay out for a single patient over his or her lifetime — will no longer be allowed.  Those limits cannot be in any plan that is purchased or renewed on or after Sept. 23, 2010.  Now, many plans have lifetime limits, usually in the millions of dollars. And the limits often kick in when patients are at their sickest and need them most– in the middle of cancer treatment, for example, or when they’re in their 80s or 90s and dealing with multiple, serious ailments. Those who reach the limits often end up dipping into savings or struggling financially.  That will no longer happen.

Annual limits will be banned, too. But that ban will be phased in.  These limits aren’t as common as lifetime limits, but 19 percent of individual plans — those not paid for by an employer — have them. So do 14 percent of plans provided by small employers and 8 percent of plans provided by larger employers, according to the U.S. Department of Health and Human Services.

Like lifetime limits, yearly maximums can have devastating financial effects.  Here’s how the phase-in will work: Plans issued or renewed on Sept. 23, 2010, or later can have annual limits, but they must be $750,000 or higher. For plans issued or renewed on or after Sept. 23, 2011, the annual limit must be $1.25 million or higher. Plans issued or renewed on Sept. 23, 2012, or later must have an annual limit of $2 million or more. Plans issued or renewed on or after Jan. 1, 2014 can have no annual limit at all.  Not all plans have to follow the annual-limit rule.



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