Changes In The US Insurance Sector In The Last Decade
In the past Insurance was a debatable matter. People were reluctant to take any kind of insurance. However, President Barack Obama bought in a slew of changes in the Affordable Care Act of 2010. This law has helped change the insurance landscape of the US. We shall now look at the major changes in the insurance sector over the past decade. We shall look at the Pre-Obama period and the post 2010 period for an easier understanding of the concept.
1. Pre-existing health conditions:
Then – In case you had a pre-existing health problem, the insurance company had the right to charge you a higher premium. They also had the right to deny you an insurance policy.
Now – Since 2014, the Government has removed this discrimination. Today, no insurance company can deny you coverage based on your pre-existing or current health condition. They do not have the option of charging you a higher premium too. As far as children less than 19 years are concerned, this change has come into effect from September 23, 2010.
2. Preventive care costs:
Then – It is true that some large employers and insurers expanded employee wellness programs to include screenings at no extra cost. However, there was a huge involvement of out-of-pocket expenses. This discouraged people from opting for the schemes.
Now – Since September 23, 2010, all health plans have to offer preventive services and treatments to all without involvement of any out–of-pocket costs. This has come as a boon to people of all ages.
3. Insurance for young adults:
Then – Prior to Obama Care, children over the age group of 18 years / 21 years did not have treatment as dependents of their parents. Hence, about 4 out of 10 young adulated were in the uninsured bracket.
Now – Since September 23, 2010, children below the age of 26 years can remain in or return to their parent’s plan even in case, they became financially independent. This benefited many upper middle class families.
4. Annual as well as lifetime benefit limits:
Then – There were limits in place on the amount of claims annually as well as over the life of the policy. This used to have an adverse effect on the percentage of the population lodging such claims.
Now – They have removed all the limits in 2010. In addition, the insurance companies cannot impose any fresh limits for policies starting from 2014 onwards. However, some insurance companies find a way out. They limit the number of days in the hospital thereby indirectly reducing the claim.
5. Cost Control:
Then – The US used to spend huge amounts on health care annually, much more than the other developed countries. Out of this expense, a majority of amounts went towards the administrative costs and overheads resulting in huge profits for insurance companies.
Now – The Obama Care regime envisages insurers to submit proposed rate increases to federal review. In case an insurer spent less than 80% of the individual plan, the law envisages a refund of the excess amount to the insured policyholders. This is a stupendous bonus for the policyholders.
6. Cancellation of coverage:
Then – There was a practice of revoking the insurance cover of people in case the insurance companies found out a small error in the insurance application. They also had the liberty to ask for refund of any claims paid on such policies.
Now – The insurance companies can now cancel the coverage on only two instances. One is outright submission of false information by the policyholder and the other is the non-payment of premiums. The insurance companies cannot deny coverage for any other reason.
7. Right to appeal:
Then – The insurance companies were under no obligation to explain the reasons of refusal of the claim to the policyholder. The policyholder had no avenue for redressal.
Now – The insurers have to give valid reasons for denial of any claim. The policyholder has an avenue of challenging the decision. An independent organization has the power to overturn the decision.
We have seen seven changes in the insurance sector because of the enactment of the Affordable Care Act in 2010.
There have been some more changes in the insurance sector over the past decade. We shall look at some of them.
- Change in the primary network: The consumers have the right to change their insurers on an annual basis.
- Additional coverage for spouse: There have been changes by allowing for inclusion of your spouse in your policy by paying an extra premium.
- Wellness programs: The past decade has seen introduction of large number of wellness plans in the insurance sector.
- Inclusion of Transgender population into the network: This community has seen inclusion in the insurance sector over the past decade.