As the Affordable Care Act moves closer to full implementation — including the application of new standards for health insurance plans on January 1, 2014 — some critics of the health care law have seized on recent insurance plan notices as evidence that the law won’t work. These notices, issued by individual-market insurance plans and sent to their enrollees, inform plan subscribers that their health insurance plan does not meet the standards of the ACA, and they will need to choose a new plan that does meet these requirements. These critics charge that the law does not live up to President Obama’s promise that “if you like your plan, you can keep it.” Here are five things to keep in mind as the controversy swirls around you:
New plan requirements improve coverage
Starting January 1, health plans sold on the individual market must cover all essential health benefits — including maternity care, preventive care, mental health treatment and prescription drugs. Today, policies in this market often skimp on these critical services. For example, NWLC’s own research demonstrates that only 12 percent of these plans cover maternity care, while coverage for mental health and prescription drugs is also spotty.
Most people don’t “keep” their coverage in the individual market
In most states, health plans don’t have to renew your policy year after year in the individual market — if you get sick, your plan can kick you out once your 12-month contract ends. And lots of people buy coverage in this market for only a short period of time — leaving the market once they receive an offer of employer-sponsored coverage or qualify for Medicare, perhaps. One estimate is that only 17 percent of subscribers purchase the same policy for two years or longer.
The whole point of the health care law is to reform the individual market
Ok, this is just one of several major goals for the law — but it is right up there with helping people afford coverage and controlling the growth of health care costs. The individual market is probably the most dysfunctional part of our health care system. Health plans can choose to sell policies only to healthy people, refuse to offer coverage that people need, charge people more because of their health history or just because they are a woman… the list goes on and on. Under the health law, these plans must offer better coverage, and enrollees will enjoy greater financial protections and plan stability. Health insurers won’t be able to cancel your policy when you get sick, or deny coverage for a pre-existing condition. Ending these types of policies will improve the market and help women and their families.
These subscribers aren’t losing coverage — plus, they might be eligible for a discount
Even the plan notices tell subscribers that they can continue to buy coverage from their current health insurer. People who currently buy coverage on the individual market will likely find they have more plan choices in the new Marketplace, beyond the insurer they use today. And they may find that they qualify for a tax credit that reduces their health insurance premiums. These new policies will comply with the ACA’s requirements — by offering more robust coverage, by covering pre-existing conditions, and by providing greater financial security.
Most women won’t receive one of these notices
Women who have coverage through their employer or a family member’s employer, or who have public health insurance such as Medicaid, won’t be affected by these changes in the individual insurance market. That is almost three-quarters of American women. (Women without health insurance will be affected — but in a good way. Up to 7 million women [PDF] who are currently uninsured will qualify for help with insurance premiums in the new Marketplace.)
Check out our latest factsheet — Answers to Frequently Asked Questions about the Individual Market — to learn more.