The Patient Protection and Affordable Care Act was officially signed into law on March 23, 2010. The Act was designed to improve health outcomes, reduce health care costs, and broaden access to care.
One of the primary changes required under the ACA was that health insurance plans were required to eliminate pre-existing conditions. This means that all eligible participants could enroll during open enrollment periods or under specific circumstances, such as birth of a child, divorce, or relocation, without worrying about being turned down for coverage because of a pre-existing condition.
A subsidy provides financial assistance to those with lower incomes in paying their health insurance premiums and for the cost of care. In order to access these subsidies, health insurance must be purchased through an Exchange on the Health Insurance Marketplace (at healthcare.com).
Under the ACA, carriers who wish to offer coverage to those receiving subsidies must offer their plans on the Exchange. All policies on the Exchange must cover 10 Essential Services, including preventive care, and must have an unlimited lifetime maximum on these services. Plans have a maximum out of pocket limit for care received from network providers.
Most health insurance plans revolve around “networks” of providers. Insurance companies negotiate with hospitals, physicians, and pharmacies to establish pricing for services. Members out of pocket cost is determined based on whether the provider is in network.
In a PPO plan, members have access to in and out of network providers. Each time the member seeks care, s/he can decide whether to use a network provider. If the member stays in network, the member pays a lower percentage of the cost of care and the provider cannot balance-bill the member for any additional costs above the network contracted rates.
In an HMO, members must use network providers unless there is a true emergency. Any care received from non-network providers will not be reimbursed. Additionally, members must choose a primary care physician to direct their care, and any visit to a specialist requires a referral.
Primary care physicians tend to be generalists, often family care or general practitioners. These doctors focus on a member’s total well being and help their patients coordinate health care. In an HMO plan, a member must get a referral from a PCP to a specialist before seeking care.
In most US health insurance plans, members are required to pay a deductible or first dollar payment, before the plan pays for care. The amount of the deductible will vary based on the type of plan in which you are enrolled, and may vary depending on whether you use in or out of network providers. Usually, plans with higher deductibles have lower coinsurance requirements.
Once you have met your deductible, the plan will pay for care based on the coinsurance percentage for the service. You will continue to pay coinsurance until you have reached your out of pocket maximum. At that point, the plan will pay 1005 of covered servicers.
In HMO plans, payment to providers is usually done by co-pay. This is a set amount paid for each service received. PCPs often have lower co-pays than specialists. Hospitals may have separate co-pays for visits to emergency rooms or for inpatient care. Some prescription drug plans have co-pays for medications.
When a member seeks care from a non-network provider, the provider can determine the cost of providing a service. The insurance company will pay for care based on “reasonable and customary” fees, but the provider can bill the member (“balance bill”) for the amount that the plan does not pay. The member is responsible for any charges above reasonable and customary.
Most insurance plans set reimbursement for services based on compiled data of the average charges for a particular procedure in a particular geographic region. Plans will not pay more that the allowed amount for care, and out of network providers can bill patients for the amount that the insurance company does not pay.
Most insurance plans are designed to discourage you from using an ER unless you have a “true emergency”. The cost of seeking treatment at an ER is often higher than the cost of care at other facilities.
To encourage members to use alternatives to the ER, many plans promote the use of urgent care facilities. These are often stand-alone facilities staffed with primary care providers. They can treat minor illnesses and injuries, including stitches, and can prescribe medications. These facilities often are open seven days per week, and provide extended hours to accommodate work schedules.
Some pharmacies operate clinics that provide services similar to those provided in an urgent care facility. These clinics tend to be staffed with physician assistants and nurse practitioners, and they can write prescriptions for minor conditions.
Under the ACA, health insurance plans pay 100% of the cost of an annual physical exam for adults and children. Members are encouraged to use this benefit to get screened so that your provider has a baseline for your health.