Obamacare (the Affordable Care Act) has dominated headlines since the Health Insurance Marketplace opened for business on Oct. 1, 2013. Amid controversy, misunderstanding and technical glitches of the launch, the many positive changes that Obamacare brought to healthcare got lost in the shuffle.
One such change pertains to the types of services that are covered by health insurance plans: Starting Jan. 1, 2014, all health insurance plans offered to individuals – or through the small-group market to employers with 50 or fewer employees – were required to provide coverage for an Essential Health Benefits (EHB) package.This still applies to non-grandfathered health plans (those that were not in existence on March 23, 2010) offered in the individual and small group markets, both inside and outside of the new Health Insurance Marketplace (or “Exchange”).
A healthcare expense is “covered” if your plan benefits are applied to the item or service. In contrast, if an expense is not covered, your plan benefits will not be applied; that is, you will be responsible for 100% of the costs, and nothing will count towards meeting your plan deductible or out-of-pocket limit.
If an expense is covered, you might still be responsible for 100% or a portion of the costs, but any amount you pay will count toward your deductible or coinsurance. In other cases, insurance might cover 100% of the service. As long as plan benefits apply to the item or service, it’s considered a covered benefit. The extent to which it’s covered depends on the item or service, and on your particular health insurance plan.
Covered benefits vary from one health insurance policy to the next. For example, one policy might cover trips to the chiropractor with a $25 copayment. Another policy might not cover chiropractic care at all, and any chiropractor visits would have to be paid entirely out-of-pocket (and the payments would not count towards a deductible or out-of-pocket limit). In general, the more comprehensive the plan (i.e. plans that cover more benefits), the more expensive it will be, all else being equal (deductible, copayment and coinsurance).
Four Tiers of Coverage
Under the Affordable Care Act there are four tiers of coverage for health insurance plans named for different metals: Bronze, Silver, Gold and Platinum. The four levels are differentiated based on their actuarial values, or the average percentage of healthcare expenses that will be paid by the plan. On average, the actuarial values for the four tiers of coverage are:
- Bronze = 60%
- Silver = 70%
- Gold = 80%
- Platinum = 90%
In general, the higher the metallic level (i.e. Gold and Platinum), the more the plan will pay towards your healthcare expenses, but the higher your monthly premiums will be. Regardless of the type of plan you have – Bronze, Silver, Gold or Platinum – the Affordable Care Act means you will be covered by a core set of Essential Health Benefits.
Essential Health Benefits
The services plans must cover – at a minimum – fall into the following 10 general categories:
Ambulatory patient services - Care you receive without being admitted to a hospital, such as at a doctor’s office, clinic or same-day (“outpatient”) surgery center. Also included in this category are home health services and hospice care (note: some plans may limit coverage to no more than 45 days).
Emergency services - Care you receive for conditions that could lead to serious disability or death if not immediately treated, such as accidents or sudden illness. Typically, this is a trip to the emergency room, and includes transport by ambulance. You cannot be penalized for going out-of-network or for not having prior authorization.
Hospitalization - Care you receive as a hospital patient, including care from doctors, nurses and other hospital staff, laboratory and other tests, medications you receive during your hospital stay, and room and board. Hospitalization coverage also includes surgeries, transplants and care received in a skilled nursing facility, such as a nursing home that specializes in the care of the elderly (note: some plans may limit skilled nursing facility coverage to no more than 45 days).
Laboratory services - Testing provided to help a doctor diagnose an injury, illness or condition, or to monitor the effectiveness of a particular treatment. Some preventive screenings, such as breast cancer screenings and prostrate exams, are provided free of charge.
Maternity and newborn care - Care that women receive during pregnancy (prenatal care), throughout labor, delivery and post-delivery, and care for newborn babies.
Mental health services and addiction treatment - Inpatient and outpatient care provided to evaluate, diagnose and treat a mental health condition or substance abuse disorder (note: some plans may limit coverage to 20 days each year).
Rehabilitative Services and devices - Rehabilitative and habilitative services and devices to help you gain or recover mental and physical skills lost to injury, disability or a chronic condition. Plans have to provide 30 visits each year for either physical or occupational therapy, or visits to the chiropractor. Plans must also cover 30 visits for speech therapy as well as 30 visits for cardiac or pulmonary rehab.
Pediatric Services - Care provided to infants and children, including well-child visits and recommended vaccines and immunizations. Dental and vision care must be offered to children younger than 19. This includes two routine dental exams, an eye exam and corrective lenses each year.
Prescription drugs - Medications that are prescribed by a doctor to treat an illness or condition. Examples include prescription antibiotics to treat an infection or medication used to treat an ongoing condition, such as high cholesterol. At least one prescription drug must be covered for each category and classification of federally approved drugs.
Preventive and wellness services and chronic disease treatment - Preventive care, such as physicals, immunizations and cancer screenings designed to prevent or detect certain medical conditions. Also, care for chronic conditions, such as asthma and diabetes.
Note: Since Jan. 1, 2014, individuals can’t be denied coverage for preexisting conditions and plans can’t limit how much they pay for lifetime medical expenses. Also, all Marketplace and many other plans must cover a list of preventive services at 100%. You will not owe a copayment or coinsurance even if you haven’t met your yearly deductible – as long as the service is delivered by a network provider (otherwise, you will be responsible for payment). Services include:
- Abdominal Aortic Aneurysm (“AAA”) one-time screening for men of certain ages who are or who have been smokers
- Alcohol misuse screening and counseling
- Aspirin use to prevent cardiovascular disease (applies to both men and women of certain ages)
- Adult blood pressure screening
- Cholesterol screening for adults of certain ages and high-risk adults
- Colorectal cancer screening for adults over 50
- Adult depression screening
- Type 2 Diabetes screening for adults who have high blood pressure
- Diet counseling for adults who are at a higher risk for chronic disease
- HIV screening for everyone ages 15 to 65 and for other ages if the person is at an increased risk
- Adult immunization vaccines (visit the Centers for Disease Control and Prevention website at www.cdc.gov and search for “adult immunizations” for more information about vaccines and immunizations):
- Hepatitis A
- Hepatitis B
- Herpes Zoster (Shingles)
- Human Papillomavirus (HPV)
- Influenza (flu shot)
- Measles, Mumps, Rubella (MMR)
- Pneumococcal (Pneumonia)
- Tetanus, Diphtheria, Pertussis (Td/Tdap)
- Varicella (Chickenpox)
The Bottom Line
Under the Affordable Care Act, certain preventive health services and these 10 essential health benefits are the minimum requirements for many health insurance plans. Fully insured large group plans, self-funded (ASO) plans and grandfathered plans – those that were in existence on March 23, 2010 – are not required to include Essential Health Benefits. Plans may have additional benefits on top of these, so it’s important to look at the summary of benefits for any plan that you are considering to make sure it fits your budget and health needs.
For more information, see 5 Things You Should Know About the Health Insurance Marketplace.