RETIREMENT TIPS: Essential Health Benefits Under the Affordable Care Act

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AlanKondo-238x300By ALAN KONDO, CFP, CLU

Beginning in 2014, the Affordable Care Act (ACA) will greatly expand the health care benefits for the millions of Americans with no health coverage or who are underinsured. A few of the medical services that may be currently excluded from your current coverage will be required under the Affordable Care Act.

The ACA has identified 10 “essential health benefits,” which must be covered by non-grandfathered health plans. Even those with “full” insurance are expected to benefit from the act, as only 2% of insurers currently provide all 10, but more are expected to expand their coverage.1

The 10 essential benefits are:

1. Ambulatory patient services, also known as outpatient care. However, details about the plans’ networks and access to doctors will vary on a state-by-state basis.

2. Emergency services. Emergency room visits will no longer require preauthorization, and you can no longer be charged for going out of network.

3. Hospitalization. Your insurer must cover your hospitalization, although you could be required to pay up to 20% of the bill if you haven’t reached your out-of-pocket limit.

4. Maternity and newborn care. Insurers will now have to provide prenatal care, childbirth, and care for the newborn infants as part of their standard coverage.

5. Mental health and substance-use disorder services. Many plans do not currently cover these services. In some states, coverage may be limited to a certain number of visits.

6. Prescription drugs. All individual and small-group plans will cover at least one drug in every category and class in the United States Pharmacopeia. Drugs will also be counted toward your annual out-of-pocket maximum limits.

7. Rehabilitative and habilitative services. The law is a boon to those with chronic diseases, who will now be covered for therapies to help them overcome their long-term disabilities. It also requires the coverage of rehab therapies as well as medical equipment, such as walkers and wheelchairs.

8. Laboratory services. This includes prostate exams and Pap smears. You can still be billed for partial costs of diagnostic lab tests as well as more extensive screenings, such as an MRI.

9. Preventive and wellness services. The law requires insurers to cover all of the 50 preventive services recommended by the U.S. Preventive Services Task Force at no extra cost. Those services include diabetes screening, high blood pressure screening, mammograms, and colorectal cancer screening.

10. Pediatric services, including oral and vision care. Dental and vision care is considered an essential benefit for children aged 18 and younger whose parents or guardians get insurance through the individual or small-group plans.

Additionally, most plans — obtained through an employer or on the marketplace — cannot deny coverage or charge more because of a pre-existing health condition.

Out-of-Pocket Spending Limits Delayed on Some Plans

The amount of money people will have to pay out-of-pocket each year for medical and prescription drug costs will be capped at $6,350 for individuals and $12,700 for a family. But these limits will not be in effect until 2015 for plans that use more than one service provider to give insurers and employers more time to comply.

¹ HealthPocket, August 2013

The opinions expressed above are solely those of Kondo Wealth Advisors, LLC, a Registered Investment Advisor in the state of California. Neither Kondo Wealth Advisors, LLC nor its representatives provide legal, tax or accounting advice.

 

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