An Interview with Dania Palanker, J.D., M.P.P.
Georgetown University Center on Health Insurance Reforms
We asked health insurance policy expert Dania Palanker, an Assistant Research Professor at the Center on Health Insurance Reforms at the Georgetown University Health Policy Institute, to explain why people should get their health plans through the Marketplace and what risks are there for those who enroll in plans that do not comply with the Affordable Care Act.
Thank you for talking with us today. Let’s start with something basic: how are Affordable Care Act plans different from non-Affordable Care Act health plans?
There are crucial differences between Affordable Care Act-compliant plans (ACA plans) and non-ACA plans. In terms of benefits and protections, ACA plans are significantly better.
Insurers must provide a Summary of Benefits and Coverage for each ACA plan. This standardized document enables you to compare plans and have a good sense of what will be covered and at what cost to you. The Summary of Benefits and Coverage looks like this:
Every ACA plan must cover the 10 Essential Health Benefits, which include mental health and substance use disorder services, as well as outpatient care, emergency services, maternal health-related care, prescription drug coverage, rehabilitation services and devices, lab services, preventive health care, and children’s health care. There is no such coverage requirement for non-ACA plans and many exclude mental health services, maternity care, and no-cost preventive care.
People with any chronic condition, including mental health conditions, should take note of whether a plan covers medicines and at what cost. Some non-ACA plans don’t cover maintenance drugs. We’ve seen non-ACA plans that offer a so-called “drug benefit,” but it’s the same kind of drug discount program that people can sign up for on their own. For an ACA plan, you can find this information on the summary of benefits and on the company’s website. For a non-ACA plan, information may be more difficult to find.
ACA plans cannot deny coverage or charge more to people who have pre-existing conditions. Non-ACA plans do not have these restrictions, so can refuse to provide insurance coverage to a person who has a history of diagnosis or treatment of any health condition, including a mental health condition, or may charge more for their health insurance, or may not cover care related to that pre-existing condition.
Under the ACA, a person is eligible to be covered on their parents’ health plan until they reach age 26. Non-ACA plans have often limited dependents’ eligibility to age 19 or graduation from college.
Every ACA plan must also provide a structure for disputing a denial of coverage or an unanticipated charge (more than expected, for example). Under the ACA, people may appeal within the company (the “internal appeal”) and, if denied, may further appeal for an impartial outside review. Non-ACA plans may be required by state law to offer an internal appeal, but not to offer review of the decision outside of the company.
One other essential distinction is that mental health parity requirements do not apply to non-ACA plans in most states. With parity, briefly, any plan that offers mental health coverage (which all ACA plans do) must do so in a way that is no more restrictive than medical and surgical coverage. This means that co-payments, pre-approval requirements, and any other limits on mental health-related services cannot be more burdensome than those for medical and surgical services. A non-ACA plan is likely not a good fit for a person with a chronic mental health condition.
Keep in mind that there is not only one ACA plan. Although there is a baseline for coverage, there are wide variations in premiums, out-of-pocket payments for services, prescription medication prices, and size of provider networks, to name a few. Additionally, ACA plans also offer subsidies to those who qualify based on income, ranging from income tax credits that lower premium costs to subsidies that lower the cost of services.
Are there different kinds of non-ACA plans?
There are a few models, not all of which are technically insurance, though their representatives may talk about their product that way. “Short-term plans” are for less than 12 months in duration and are not intended to be a substitute for an ACA plan, though some of these plans are being sold for 364 days to be one day less than a year. They do not generally offer comprehensive benefits, subsidies, or the protections required by the ACA.
There are “health care sharing ministries” (HCSMs) that pool money from people who share religious beliefs and then distribute the funds to cover members’ expenses. These programs won’t cover health care services that conflict with their religious beliefs, so there may not be payment for care of substance use disorders, pregnancy out of wedlock, birth control, removal of ectopic pregnancies, and so on. In addition, there is no guarantee that any member’s medical costs will be paid fully or in part.
The health care sharing ministries can put their members at great disadvantage in paying for care. Because they do not operate with a provider network, members will be expected to pay the provider for any amount not covered by the HCSM (known as “balance billing”). There have also been situations where the HCSM has encouraged its members to utilize free or low-cost care in their communities, thereby transferring the costs to the broader society instead of paying from the monies collected.
Who buys non-ACA plans?
Sometimes people buy non-compliant plans because they aren’t aware of the differences. There is aggressive marketing of non-ACA plans sold through insurance brokers, sometimes done in a way that is misleading to consumers. Some brokers will verify people’s eligibility for ACA subsidies, but some will not and will not advise people of potential savings available through the Health Insurance Marketplace. If the plan seems too good to be true, it probably is.
People who miss the deadline for Open Enrollment and do not get a plan to start on January 1 may need to purchase a non-ACA plan if they do not have a “qualifying life event” that allows them to sign up outside the Open Enrollment period. The federal Marketplace’s Open Enrollment period closed for the year on December 15, 2019, but some states have extended enrollment periods.
Also, people who believe they are “healthy” may take the risk of signing up for a non-ACA plan, essentially betting that their health care costs over the year will be minimal so the lack of health care coverage will not harm them financially. Their calculation assumes that they will not be involved in an accident, be affected by an illness. or otherwise need medical or mental health care services, or at least those they can’t afford out-of-pocket.
If you missed the open enrollment window and don’t live in a state that currently has an open enrollment period, you can sign up for an ACA plan if you have any of these circumstances:
- had a change in your household in previous 60 days, such as got married or divorced or had a baby
- moved to a home in a different ZIP code or county, or beyond
- you lose your health coverage for reasons other than dropping your insurance voluntarily or not paying premiums or not providing required documentation.
- lost eligibility for the health program you were covered by or became eligible for the Marketplace, such as becoming a U.S. citizen.
What tips do you have for people so they get the coverage they are expecting?
Remember that having a pre-existing condition does not exclude you from getting an ACA plan.
Don’t enroll in a health plan over the phone unless you have had a chance to review the plan information. You always want to look over the paperwork about what the plan will cover and at what prices, and what are the rights for challenging the plan’s decisions.
Always check the effective date, when the insurance coverage will begin.
It’s always worth going to HealthCare.gov to see what is available to you. There is no deadline for enrolling for Medicaid plans for those who qualify by income, and states also have health plans for kids and, sometimes, pregnant women.
Get help from a health insurance enrollment assister.
Is anything being done to protect consumers from non-ACA plans?
Yes, a lot! State policy makers and advocates for health care and consumer protection have been working to address non-ACA plans in a variety of ways. States regulating short-term plans have taken actions such as banning these plans from reaching 12 months in duration and prohibiting sale of plans with consecutive start dates that total a year or more. A couple of states have required that these plans provide comprehensive benefits, including the 10 Essential Health Benefits. Some states have put constraints on the factors that insurers can take into account in establishing premiums; have prohibited insurers from retroactively canceling plans; and mandating that insurers pay at least a minimum percentage of premiums for health care claims.
In addition to these actions protecting consumers, they also support the health insurance markets for individuals and families. When insurers participate via a more level playing field with similar requirements and restrictions, there is less incentive (actual or perceived) to compete with the Marketplace. Ideally, the Marketplace will continue serving people across the spectrum of needing care, from healthy requiring minimal health care through those needing extensive health care services for acute or chronic health conditions. If the Marketplace only serves those who have high health care costs, the premiums will become unaffordable.
For the most part, these legislative actions have had bipartisan support and little opposition, welcoming support from individual market insurers and health care advocates. The primary opposition has come from health insurance agents and brokers and short-term health insurance companies.
The Commonwealth Fund is a good source for information for developments in this area.
Dania Palanker is an Assistant Research Professor at the Center on Health Insurance Reforms (CHIR) at Georgetown’s Health Policy Institute. She analyzes state and federal health insurance market reforms, including implementation of the Affordable Care Act (ACA),with an emphasis on insurance benefit design, access to health care, and coverage for chronic health conditions.