Many positive consumer protection mandates were enacted with the new healthcare law. The following major provisions of the new healthcare law, unless otherwise noted, became effective September 23, 2010, six months after the new healthcare law, called the Patient Protection and Affordable Care Act (PPACA), was enacted.  They apply to individual major medical insurance plans and employer group health insurance plans except where indicated.

• Prohibiting the Denial of Child Coverage Due to Pre Existing Condition- medical insurance companies cannot deny coverage to children under the age of 19 because of a pre existing condition.  Although there are limited rating restrictions regarding how much the health insurance company can charge, they must accept all applicants regardless of health status below age 19 when enrolled with their parents.

• Prohibiting Health Insurance Companies from Rescinding Major Medical Insurance Coverage- previously, if health insurers found an error or misstatement on a member’s application they could use it to deny payment for services when he or she got sick. The new healthcare law makes it more difficult to rescind major medical insurance coverage.  Now, coverage can only be rescinded for fraud or an intentional misrepresentation of fact.

• Eliminating Lifetime Limits on Major Medical Insurance- prior to the new healthcare law, most major medical insurance plans capped the maximum dollar benefit payable during each insured person’s lifetime.  Additionally, some internal benefits also had separate lifetime limits on pay outs, such as hospice, transplants, and mental and nervous benefits.  Under the new healthcare law, lifetime limits for any covered benefit considered “essential” must be removed, including any lifetime policy maximum.

• Removing Annual Limits on Major Medical Insurance- similar to the mandate requiring the removal of  all lifetime maximums, the same also applies for covered benefits considered “essential” that have a calendar year maximum.   Under the new healthcare law, all employer group health plans and individual medical insurance plans effective on or after March 23, 2010 (or individual medical insurance plans that were effective prior to March 23, 2010 that make a benefit change and subsequently lose their grandfather status), any covered benefit considered “essential” cannot be subject to a calendar year maximum.  Additionally, the medical insurance policy must have at least a $750,000 calendar year maximum (this amount is indexed and increases every year).

• Appealing Health Insurance Company Decisions- the new healthcare law establishes formal internal and external review processes designed to protect the consumer against an adverse claim or coverage determination by the medical insurance company.

• Small Business Health Insurance Tax Credits- up to 4 million small businesses are eligible for tax credits during the 2010 tax year.  This is designed to help them pay for major medical insurance for their workforce. The first phase provides a credit worth up to 35 percent of the employer’s contribution toward the employees’ major medical insurance.  Small non-profit organizations may receive up to a 25 percent credit.

• Relief for 4 Million Seniors Who Hit the Medicare Prescription Drug “Donut Hole”- an estimated four million seniors will reach the gap in Medicare prescription drug coverage known as the “donut hole” this year.  Each senior will receive a $250 rebate. First checks were mailed in June, 2010 and will continue monthly throughout 2010 as seniors hit the coverage gap.

• Free Preventive Care Screening Services- all individual major medical insurance plans and employer group health plans established after after March 23, 2010 must cover certain preventive services, such as mammograms and colonoscopies free of charge.

• Temporary High Risk Pool Program- individuals who have pre-existing conditions and have been without major medical insurance coverage for at least can enroll in the Pre-Existing Conditions Insurance Plan, call PCIP.  Each state is responsible for administering the program for their residents.  The plan covers pre existing conditions, limits the insured’s out-of-pocket exposure and caps the premium that can be charged.  It became effective June 23, 2010.

• Extension of Adult Dependent Coverage- young adults will be allowed to stay on their parents’ plan until they turn 26 years old (this provision does not apply to employer sponsored group health plans if the young adult is offered major medical insurance at his/ her work).

For more news and information regarding the new healthcare law, visit our healthcare reform information center.  We bring the world of health insurance to your fingertips.   For low cost medical insurance and online medical insurance quotes see www.healthinsuranceadvisory.org today.