The Wall Street Journal by Avery Johnson –
October 21, 2012:
Health-care reform is here to stay—for the foreseeable future. So for the millions of Americans with health insurance at their workplaces, this fall’s “open enrollment” period will be one of the most important in years.
Next year will see some of the many significant changes brought on by the Affordable Care Act, including easy-to-read plan summaries and caps on flexible spending accounts. The ability of health insurers to place limits on annual spending is also on its way out, while earlier reforms such as adding adult children to their parents’ plans offer new options to consumers.
Most of the really big changes—including health-insurance exchanges and tax credits to help people buy coverage—aren’t coming into play until 2014. Still, the provisions going into effect in 2013, along with those that have already been introduced, can affect any changes you might want to make to your health coverage.
And the presidential election is unlikely to change the landscape for people picking health plans this fall. If President Obama is re-elected, the changes stay. If GOP candidate Mitt Romney wins, getting rid of the law is unlikely to be a quick or easy process, given that the Democrats are expected to retain control of the Senate.
“This year’s fall enrollment season is really the calm before the storm of health-plan reforms that will come in 2014,” says Tom Richards, insurer Cigna’s president in charge of reform implementation. “There is some uncertainty among employers because of the political dynamics they are watching, nevertheless they continue to move ahead to implement the changes that were part of reform.”
Here are five things you need to know as you sift through your plan options over the next few weeks.
1. Higher Premiums
First, the bad news: You will likely be paying higher premiums next year, with 13% of companies planning to raise their employees’ contributions to health-care costs by five percentage points or more, and 42% planning premium increases of one to five percentage points, according to a July survey of employers by benefits consultant Towers Watson TW -1.18%.
Some good news: The pace of that growth is slowing. Employer health-care costs are expected to rise by 5.3% in 2013, compared with 5.9% this year, according to the survey.
Premium increases have been held down thanks to the requirement that insurers give rebates to consumers if insurers spent less than 80% of premiums on medical care, says Cheryl Fish-Parcham, deputy director of health policy at Families USA, a health-care consumer group in Washington.
Some 13 million consumers got rebates worth $1.1 billion this year, according to the Obama administration.
2. Straightforward Summaries
The most visible change in your packet of insurance options for 2013 is a new form called a “Summary of Benefits and Coverage.”
The health-care law requires plans to provide these as of last month. The summary is meant to be a simple, easy-to-read description of how a plan works, what it covers and doesn’t cover—there is no fine print allowed. Every health plan must have one, allowing you to compare two different plans side by side.
The form also will include examples to show you what each plan would generally cover in two common medical situations, the normal delivery of a baby and Type-2 Diabetes.
“You can lay these things side by side and see what’s the same and what is different,” says Nancy Metcalf, senior program editor at Consumer Reports. “Not only ‘What’s the deductible?’ but ‘Are there things that don’t apply to the deductible? Is there an out-of-pocket limit and are there things that don’t apply to that limit, like copays?’ ”
The plan is also supposed to provide you with a new glossary of insurance lingo—words like deductible, coinsurance and copayment that consumers may not understand.
If you don’t get this new paperwork from your employer, ask for it, says Ms. Metcalf.
3. FSA Limits
For 2013, the amount you can put into a workplace flexible spending account will be capped at $2,500. Previously, the limits, if any, were set by the employer.
FSAs let you set aside tax-free money that can be used to pay for qualifying out-of-pocket expenses, such as copayments for doctor visits and prescriptions. It can’t be used for premiums. Go to the Internal Revenue Service website for a list of qualifying expenses (www.irs.gov).
Keep in mind that if you don’t use the full amount that you set aside, you will lose it. So it’s important to estimate your out-of-pocket expenses wisely.
4. Dependent Coverage
Dependent coverage has gotten a boost from the health-law provision, which took effect in 2010, allowing many adult children up to age 26 to remain on their parents’ policies, says Karen Pollitz, senior fellow at the Kaiser Family Foundation, a health-policy nonprofit organization.
If you haven’t already, consider adding qualified dependents to your plan.
Keep in mind that a few plans were grandfathered in—or exempted from the requirement—when the provision was enacted, if they made minimal changes to their existing design.
Also, be aware that companies are often not eager to pay for additional dependents if they aren’t required to do so or if the insured has other options, such as a spouse who already has coverage as well. A Towers Watson survey conducted this summer found that 7% of employers are planning a significant reduction in subsidization of coverage for dependents next year, while 31% are considering doing so in 2014 or 2015.
5. Higher Spending Cap
If you suffer from a chronic or costly medical condition, it may come as some relief that annual limits on how much an insurer will pay for care will be going up next year—and on their way out—for many plans.
For 2013, the cap rises to $2 million, from $1.25 million this year. The cap goes away entirely in 2014.
Before the health-care law, health plans could set an annual limit on how much they would spend on your covered benefits.
Ms. Pollitz says people who will benefit most from this will be patients with expensive conditions and procedures, such as transplants.
Still, despite the higher limits, insurers can still limit services that aren’t considered “essential.”