Most of the medical coverage being sold to individuals are falling short of the “essential benefits” requirements.
Over half of all Americans who have purchased their coverage through the individual insurance marketplace currently have policies that are not up to the health care reform essential benefits standards.
Equally, the majority of employer group medical plans have less cost sharing and more comprehensive coverage.
The issue at hand is that although the Affordable Care Act, which will go into full effect in January 2014 as long as it is not overturned by the Supreme Court later this month, will provide both individuals and small employers with the ability to purchase their coverage through state insurance exchanges (comparison shopping marketplaces), there is a certain minimum level of benefit that is considered acceptable for inclusion in that marketplace.
This means that all of the plans that will be available for purchase through the state insurance exchanges must have a certain minimum level of benefits, which includes several comprehensive health care services, essential benefits, maternity care, and ambulatory and emergency care. Furthermore, there is now a requirement for the plans to be categorized within one of four cost sharing tears, based on actuarial value (the amount of financial protection that a certain policy provides, which is expressed as an estimate of the percentage of the total costs that will be paid for by the insurer).
The platinum plans will have a 90 percent or greater actuarial value, while the gold will range from 80 to 89 percent, silver will range from 70 to 79 percent, and bronze will pay for 60 to 69 percent of the total costs.
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The struggle is that a paper published in Health Affairs has shown that most individual plans don’t meet even bronze standards.
In the paper, it showed that in 2010, the average actuarial value of individual plans was 60 percent, while group plans had an average of 83 percent. The average group plan was either in the gold or the platinum tier (65 percent total), whereas there were 28 percent in silver, and 6 percent in bronze, with 1 percent in the level less than that, which was called “tin” for the purposes of the paper.
The individual market was made up primarily (51 percent) of tin plans. Another 33 percent were in the bronze category, while 14 percent had silver, 2 percent had gold, and none had platinum coverage.
The health care reform study was based on data from the Kaiser Family Foundation.