Affordable Care Act and Health Insurance Plans: Key Points and Benefits

Affordable Care Act:

1. Insurers cannot reject a person with a pre-existing condition as of 2014.

2. Adult children can stay on their parent's plan until the age of 26.

3. Insurers cannot rescind benefits due to an insured individual's honest mistake on the insurance application.

4. No lifetime limits on coverage.

5. Insurers must cover certain preventative services without applying co-payments, coinsurance, or deductibles.

6. Individuals can choose primary care physicians from within a plan's provider network and can obtain services from an OB-GYN without a referral from a physician.

7. Insurers must provide rebates to participants if certain percentages are not met.

Health Insurance Plans:

1. Traditional health insurance plans

2. Managed-care plans:

Health Maintenance Organization (HMO):

• Patient must go to an HMO provider for a fixed, low, prepaid fee with small co-pays.
• Gatekeeper: Need a referral to see a specialist.
• No "out of network" benefit. Only in-network or with a referral.

Preferred Provider Organization (PPO):

• No gatekeeper. No referral needed to see a specialist.
• Can go directly to a specialist if in-network or out-of-network.

Point of Service (POS):

• Combines HMO and PPO features.
• Network providers charge little or nothing.

3. Consumer-directed health plans (CDHPs):

• Health savings account (HSA): Funded by enrollees themselves, and the money in the HSA can be rolled over for future use at the year's end.
• Health reimbursement arrangement (HRA): HRA is contributed by the employer and is not included in the employee's income for tax purposes. Unused funds in HRA accounts can be rolled over from year to year for future use.

Reasons for Government Investment:

1. To fulfill insurance needs unmet by private insurance (e.g., flood insurance).

• Terrorism exclusions: The government created TRIS to cover terrorist attacks.

2. To compel the purchase of insurance.

• Assigned Risk Plan: Government insurers divide high-risk drivers (underwriters).

3. To obtain efficiency and provide convenience.

4. To achieve a collateral social purpose.