Congress has recently made sweeping changes in healthcare insurance legislation, particularly in short-term coverage laws, which are expected to take effect in 2019. Most of these changes will create greater options for consumers when choosing healthcare coverage and at the same time help them save money while eliminating tax penalties.
Given the dramatic public debates and easing of restrictions in existing legislation, consumers are likely to see more choices as insurers are expected to offer a variety of coverage options in 2019. You can expect to see ever-greater changes in the healthcare insurance market as insurance carriers take advantage of laws that are friendlier to their business model.
Healthcare insurance is expected to be a hot political topic in 2019 and again in 2020, when voters return to the polls to select a president. Democrats won many races in the 2018 midterms on the healthcare issue and, as the House of Representatives shifted left as a result, we can expect much more discussion on the subject of healthcare reform.
Affordable Care Act
The Patient Protection and Affordable Care Act (PPACA), more usually known as the Affordable Care Act (ACA) or by the nickname “Obamacare,” is a federal law enacted in 2010—after much debate and deliberation in Washington. It was the most significant and controversial healthcare legislation since the passage of Medicare and Medicaid some 46 years earlier.
The ACA went into effect in 2014 and introduced many reforms to the industry as well as radically altered the marketplace. It generated plenty of harsh criticism, but opponents focused primarily on two provisions outlined in the ACA.
First, consumers were mandated to have either an employer-sponsored plan or their own policy carrying “minimum essential coverage” to avoid paying a penalty—unless they were granted an exemption. Second, insurers were required to provide “essential health benefits,” which were standards set by the government that required every plan meeting ACA provisions for acceptable coverage to include certain services.
These standards included:
- Ambulatory patient services (also known as outpatient care)
- Emergency services
- Maternity care and newborn care
- Mental health and substance use disorder services including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services including oral and vision care
Obamacare requirements also banned annual or lifetime coverage caps. Critics felt that the law was too restrictive and that it forced consumers into policies they couldn’t afford because it included many benefits they may have neither needed nor wanted. For instance, unmarried men often complained about expensive maternity coverage being part of their healthcare plans. Also, short-term health plans didn’t meet the guidelines.
As the marketplace evolved, others complained about a lack of insurers and the rising costs of premiums. In some states, premiums skyrocketed and became unaffordable.
What’s Changed in 2019
After much debate and public input, Congress did away with the individual mandate, also known by the more formal “individual shared responsibility provision.” This required that individuals and families carry a minimal amount of health insurance, with a few exceptions.
Those who failed to meet the requirement were required to pay a penalty, called the “individual shared responsibility payment,” or seek an exemption. Congress repealed this provision in 2017, but the law didn’t take effect until 2019.
This repeal has opened the doors to new options for coverage and created greater availability. One choice allows people to obtain policies for a shorter period of time and not have to go through the marketplace or depend on their employers.
The law came about when the federal government eased restrictions on short-term health insurance. These short-term plans originally started as temporary policies for those who were waiting to enroll in an ACA plan or while waiting for employer-sponsored coverage to begin.
Many times, these plans were less expensive than those found in the marketplace. This was due to short-term plans not having to provide comprehensive benefits or guarantee coverage for preexisting medical conditions.
Insurers can now offer short-term plans for longer periods of healthcare coverage, which had been limited to three months under the ACA. With the repeal of the individual mandate, many more people are expected to flock to this type of coverage.
With easier access to these programs, consumers now have a much wider selection of benefits and plans to choose from. Short-term plans will allow individuals and families to customize their healthcare coverage.
These plans are not one-size-fits-all, however. They usually don’t cover preexisting conditions and don’t provide essential benefit coverage.
Consumers are cautioned to carefully review short-term healthcare benefits, conditions, and terms before enrolling in any plan.
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