Arguably the largest portion of the health reform legislation was dedicated to the insurance market reforms. At the time the bill was passed nearly two years ago, there were approximately 46 million uninsured Americans, and the law is projected to cover some 30 million by the year 2019. Those sections focusing on insurance reforms impact the insurance market by many ways, and three examples include: defining criteria for health insurance exchanges, providing subsidies for individuals to purchase coverage and determining “essential benefits” that must be covered under all new health insurance policies.
Essential benefits are exactly what they sound like – benefits that must be included in all new insurance policies sold on an insurance exchange. Remember, health insurance exchanges are the “online marketplace” where individuals will be able to purchase health insurance. Important essential benefits determined in the law are outpatient, hospital, emergency, maternal, newborn and children’s care, prescription drugs, mental health and substance abuse treatment, rehabilitation, labs, prevention and wellness and others to be determined by those in the executive branch. Previously benefits have been determined at the state and local level by insurance companies and businesses.
In order for individuals to afford coverage, the government will also subsidize lower income individuals or families to purchase coverage. This could be problematic for taxpayers if costs continue to rise at staggering rates and those arguing against establishing minimal essential benefits are doing so because of cost concerns. Experts believe, however, the new federally endorsed plans will be based on existing mid-level plans already offered by many small businesses, but could include a few additional benefits such as mental health coverage and others.
It is important to note for business or those with questions that existing plans are not required to adopt these recommendations. Experts argue that most insurance plans will eventually adopt the federal model. This is the case with Medicare, as their reimbursement rates (the amount they pay for each procedure) are often determinants of what private insurance pays for the same procedures. Stay tuned as we monitor how this process plays out and check out the following links for more information on this subject.