Walking The Talk
What's Ahead for Private Coverage?
Anne Warhover, president and CEO of the Colorado Health Foundation.
Whether you are in favor of it or not, the Affordable Care Act (ACA) changes private insurance. Unfortunately, many surveys show a majority of Americans – including those who could potentially benefit the most from the ACA – don't understand what those changes mean to them.
According to a fall 2011 survey from the Kaiser Family Foundation, 61 percent of those with health conditions (such as diabetes or heart disease) don't know that insurers won't be able to deny them coverage under the ACA. Another tracking poll from Kaiser showed that only about 50 percent of the uninsured have any idea that the ACA will provide some relief.
Why the knowledge gap? Maybe it's because actual details like this are lost amid the heated rhetoric and political ads about health care reform. And admittedly, the law is so complex that even the most committed policy wonk might have a hard time keeping up.
This edition of Health Elevations focuses on changes in private insurance already in the works or coming soon. Among the most significant changes:
- Since 2010, young adults have been allowed to remain on their parents' health insurance policies up to age 26.
- Starting last year, insurance companies in the small group [fewer than 50 employees] and individual market were required under the ACA to spend at least 80 percent of the premiums they collect on medical care and quality improvements. The ratio is 85 percent for insurance companies in the large group market.
- Beginning in 2014 – a mere two years from now – insurers will be required to provide coverage to anyone regardless of health status.
- The ACA requires most Americans to carry insurance (in a provision known as the "individual mandate"). While many object to the principle of "forcing" Americans to buy insurance, insurers simply won't be able to offer insurance to everyone without a mechanism to ensure that healthy people also obtain coverage to reduce the overall risks. The U.S. Supreme Court will settle the constitutionality of the individual mandate this year, but the controversy will most likely continue for years to come.
- Last but not least, the ACA encourages states to form new health insurance exchanges to help individuals and businesses qualify for subsidies to defray the costs of premiums and encourage competition among insurers. If done right, the health insurance exchange should make shopping for insurance easier for consumers – doing for insurance products what Expedia does for airfares and more.
Though there are many differences of opinion about the ACA, the law is intended to make coverage more available and affordable for individuals and businesses, reduce red tape and increase competition in the insurance market. Whether or not the law accomplishes (or is allowed to accomplish) these lofty goals remains to be seen.
In the meantime, this edition highlights problems Coloradans encounter in the current insurance environment, some policy remedies from the ACA as well as some uniquely Coloradan solutions to the coverage quandary.
Anne Warhover, President and CEO
The Colorado Health Foundation