subject: Keep Your Clients On Top Of The Health Reform Changes Taking Effect In 2013 [print this page] Given the results of the recent national election, the Patient Protection and Affordable Care Act (PPACA), also known as "Obamacare" or the "healthcare reform law" is here to stay. As insurance professionals, it's our job to understand how the PPACA will affect our clients and help them navigate the new regulations.
Many of the biggest changes mandated by the Act, including tax credits to help people buy coverage, won't be fully implemented until 2014. Until then, here's an overview of the changes the PPACA will bring in 2013, and why next fall's open enrollment season will be so significant.
Plan Summaries
One change that many consumers will welcome and that should be helpful to you in educating your clients are clear, easy-to-comprehend summaries of what a plan does and doesn't cover, making it much easier to do side-by-side comparisons of competing plans. Carriers are also supposed to provide jargon guides that give plain-English definitions of terms such as co-payment, co-insurance and deductible.
Higher Premiums
Yes, employers and healthcare consumers should be prepared for sticker shock when shopping for coverage in 2013. Carriers are already anticipating higher costs of care again in 2013 and, subsequently, will raise premiums; as a result, employers will be looking at options for increasing employee contributions. However, the rate at which employer healthcare costs are expected to rise in 2013 should be slightly lower than in previous years.
Annual Spending Limits
Consumers suffering from costly and/or chronic medical conditions will want to know that limits on how much a carrier will pay for individual care will rise from $1.25 million in 2012 to $2 million in 2013. And, the limit will be eliminated entirely in 2014.
Flexible Spending Account (FSA) Limits
FSAs which allow health plan members to set aside pre-tax money for prescriptions, physician visit co-payments and other out-of-pocket health costs will be limited to $2,500 for 2013. Unlike health savings accounts, where money can be left indefinitely until needed, FSA money must be spent within a year or the balance is forfeited.
Health Insurance CO-OPs
The federal government has funded approximately 20 Consumer-Oriented and -Operated Plans, known as CO-OPs, across the country, including one in Colorado, where Alliance is based. CO-OPs are essentially nonprofit health plans that include consumers on their boards of directors and strive to deliver higher quality care for lower costs than traditional health insurers. These organizations are preparing to be fully operational in time for the fall 2013 open enrollment season. As an agent, you may want to begin vetting your local CO-OP to determine whether this is an option you can recommend to your clients late next year. Your managing general agency (MGA) likely has an eye on these entities already and can offer you guidance.
Health Insurance Exchanges
As mandated by the PPACA, health insurance exchanges are online marketplaces where individuals and small businesses can shop for, compare and purchase health insurance, sort of an Expedia or Travelocity for health insurance. Some states are taking the initiative to build their own exchanges, which are permitted by federal law but subject to certain guidelines. These exchanges, if ready, will be in play for the 2013 open enrollment season, so be sure to follow their progress and ask, locally, how agents will be rewarded for bringing business through the exchange. States that choose not to create their own exchanges by 2014 will be required to use the federal exchange.
Learn More
To find out more about changes in healthcare reform in 2013 and beyond, here's a detailed PPACA timeline. Also, look to your MGA for ongoing information and advice as more elements of the PPACA go into effect.
