Part 1 of Subtitle D of Title I of the Affordable Care Act begins with two of the Law’s most important Sections. Section 1301, Qualified Health Plan Defined, and 1302, Essential Health Benefit Requirements, are important ones as they will likely affect millions of Americans who will use ‘qualified health plans’ for their coverage. A qualified health plan is one that received a certification, offers at least the Essential Benefits package, and offers at least one Silver level plan and one Gold level plan (explained below).
The Essential Health Benefits (defined in Section 1302) are: ambulance services, emergency services (in or out of the plan’s network), hospitalization, maternity and newborn care, mental health and substance abuse treatment services, prescription drugs, rehabilitation services, laboratory services, wellness programs and preventative care, chronic disease management, and pediatric services (including oral and vision care). The Secretary can alter the required benefits as seen fit, and she is tasked with ensuring that no individual of any population group is unfairly treated.
There are cost sharing limitations on employer sponsored plans.The term “cost-sharing” refers to deductibles, co-payments, co-insurance, or any charges other than insurance premiums paid by the individual. Beginning in 2015, the maximum deductible (out of pocket amount paid by an individual before insurance begins paying) is set at $2,000 for a plan covering a single individual and $4,000 for any other plan. Those rates may be increased annually using the the following formula: the original amount ($2000 or $4000) multiplied by the increase in the overall market premium percentage (For example: if average insurance premiums rose 2.5% during the year, $4000 x 1.025 = $4,100 which would be the new maximum deductible). The maximum total out-of-pocket annual expense is $5000 for self-only coverage, and $10,000 for family coverage beginning in 2014. Each subsequent year, that number will increase in the same method as the maximum deductible amount.
The term “actuarial value” refers to the the overall percentage of an individual’s healthcare costs paid by insurance. Under Obamacare, there will be different levels of coverage. The Bronze Level will have an actuarial value of 60% (insurance must pay 60% and the individual must pay 40% of total costs), the Silver Level will be 70%, Gold level 80%, and the Platinum Level will pay 90%. There will also be “catastrophic” coverage plans for people under 30 years old. These plans cover the essential benefits, but only when the individual has reached a cost-sharing limit. While the law does not state this, premiums are typically lower for plans with low actuarial values, and higher for plans with higher actuarial values.
Sections 1301, 1302
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