Few insurers now cover services required in 2014 under health care law

McClatchy NewspapersMarch 7, 2013 

— Just 2 percent of health plans available to consumers in the private insurance market offer all the coverage that will become mandatory next year under the health care overhaul, a new analysis has found.

That means that only about one in 50 plans are now in compliance with the main requirements of the Patient Protection and Affordable Care Act, according to HealthPocket Inc., a Sunnyvale, Calif., technology firm that “compares and ranks” health plans.

And consumers and the federal government might end up paying the cost of those new requirements in higher premiums.

The analysis found that basic benefits, including doctor visits, emergency room care, hospitalizations and lab tests, were standard offerings for nearly all the 11,000 plans in the study.

But only one in four offered pediatric care and only 8 percent covered dental checkups for children. About one-third covered maternity and newborn care and just over half covered services to deal with substance abuse.

These and other coverage areas are considered “essential health benefits” under the health care law. All health insurance plans in the individual and small-business market must offer them beginning next year. But “we couldn’t find a single plan that had every feature fully satisfied,” said Kev Coleman, the head of research and content at HealthPocket.

Unless a health plan is exempted from the health care law’s requirements, “It will have to change to survive,” Coleman said. “Consumers will be entitled to more health benefits in 2014 than ever before, and this will require existing health plans to expand coverage or close and be replaced by entirely new plan designs.”

The law, which critics have long labeled “Obamacare,” requires that health plans offered to individuals and small employers provide coverage in 10 categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

Unsurprisingly, Massachusetts health plans, on average, offered more than most plans around the country, the analysis showed. The Obama administration has often cited the state’s health insurance program as the model for its own initiative.

The Bay State’s insurance plans covered 94 percent of the essential benefits, on average, followed closely by Rhode Island’s, which provided about 93 percent. Hawaii plans covered 90 percent of mandatory benefits and plans in California, Maryland and Vermont covered 89 percent.

Alaska plans had the worst showing, covering only 66 percent of essential benefits. They were followed by Wisconsin at 67 percent and Texas and New Hampshire at 68 percent.

The insurance industry said the new requirement would raise the cost of coverage for consumers.

“Anytime you add benefits to a policy, it adds to the cost of health care coverage,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a trade association for large insurers. “And many people will be getting coverage that’s more comprehensive than they have today, but it will also be far more expensive than what they pay today.”

The health care law’s requirement that all citizens have insurance or pay a fine will increase competition among insurers, which will help lower premiums for individuals, according to the Congressional Budget Office.

In addition, the law provides premium tax credits – in the form of advance payments – to help eligible families and small businesses purchase health coverage through new insurance exchanges that will operate in each state, beginning in October.

For a family of four that earns $35,000 a year, the tax credit protects them from spending more than 4 percent of their annual income for insurance, said Kathleen Stoll, the director of health policy at Families USA, a consumer health care advocacy group.

If that family’s policy now costs $12,500 a year, they’d get an $11,090 tax credit toward the cost of coverage, Stoll said.

Email: tpugh@mcclatchydc.com; Twitter: @TonyPughDC

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