Many people would rather get a tooth pulled than spend hours poring over the coverage details of health insurance plans. But this year, it could really pay off to educate yourself on all the options instead of automatically renewing your old plan. You may be able to take advantage of some benefits that kicked in over the past few months under the new health reform law. If the Affordable Care Act stands as passed, insurance exchanges offering health plans to all will open for business in 2014. In the meantime, insurance companies have been forced to rectify some "unfair practices," such as denying coverage to kids with pre-existing conditions and setting lifetime limits on benefits. But some of these improvements only affect certain plans, which is why you need to grab your glasses and read the fine print. Here's what to look for:
1. Free preventive services. Any new health plan your employer adds to its roster must provide free coverage, without copays or deductibles, for a slew of screening tests, exams, and counseling services. The 50-plus freebie list includes blood pressure screenings, mammograms, cholesterol checks, and vaccines, as well as depression screenings, breast-feeding support for new mothers, smoking cessation counseling, and behavioral assessments for kids. Next year the government may add contraception, maternity care, and pelvic exams to the list. If you simply renew your old plan, you'll probably still have to pay as usual for these services, says Cheryl Fish-Parcham, deputy director of health policy at the nonprofit advocacy group Families USA. That's because plans that were in place before the healthcare law passed in March are exempt. But old plans lose this "grandfathered" status if they make even small changes, including charging significantly higher copays or deductibles, eliminating any previously covered benefits, or decreasing the employer's share of the premium. It's best to verify your own plan's status.
2. Coverage for adult children. All plans, even the grandfathered ones, must extend coverage to young adults up to age 26 who want to stay on their parents' plan, even if these adults are no longer dependents. The plans don’t have to cover the children of these 20-somethings (nor their spouses), says Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. And they can't exclude people with pre-existing conditions like asthma or cancer. The catch? The young people won't be covered if their parents are already on Medicare, and until 2014, grandfathered plans can disqualify them if they can get on-the-job insurance.
3. Higher premiums. Your costs will probably rise a little more than usual, as employers shell out an estimated 9 percent more in premiums for 2011 (compared to increases of 7 percent in 2010 and 6 percent in 2009), according to Hewitt Associates, a healthcare consulting company in Lincolnshire, Ill. Employees at large firms will be asked to contribute $2,209 toward their annual premium, on average, or nearly $250 more than in 2010, not including copays and deductibles. (Employers' share will average $7,612 in 2011.) More companies are charging premiums on a per-participant basis, rather than based on whether the plan covers an individual or a family. That could make it prohibitive to add those grown children, for example.
4. No more lifetime caps on coverage. As of September, or whenever you renew your plan for 2011, you'll no longer have a lifetime cap on coverage, and that's true even if your plan is grandfathered. Yearly coverage limits have been raised to $750,000 and will rise to $1.25 million in 2011; they'll disappear entirely in 2014. The government has issued waivers, however, to about 30 companies, including McDonald's, that threatened to drop their employee health coverage if they had to raise the caps. These companies, often food service or clothing retailers, offer their low-wage workers plans with low costs but "extraordinarily limited benefits," says Corlette.
Corrected on 12/7/10: A previous version of this piece gave incorrect information regarding insurance coverage for the grandchildren of those who have insurance that covers their children up to age 26.