Healthcare insurance reforms under the Affordable Care Act

¶ … Patient Protection Affordable Care Act (PPACA) legislation is patently an improvement to the health care delivery system. The mere fact that thousands upon thousands of people are receiving healthcare and medical service through the Affordable Care Act is testimony to the scope of the improvement in healthcare services. But there is much more to the equation than absolute numbers of people now receiving medical and health care services through a healthcare insurance plan, many for the first time ("ObamaCare," 2015). The following sections discuss the healthcare insurance reforms that are integral to the Affordable Care Act.

Rescissions

The Affordable Care Act prohibits health insurance plans from rescinding coverage unless fraud or misrepresentation has occurred. Indeed, the reforms include prohibitions on rescissions and an extension that requires the provision of coverage of existing health insurance plans for non-dependent children up to age 26. This reform strengthens an area that insurance companies have substantively abused, as they have dropped coverage on people with chronic and severe health care issues, and refused to provide coverage for people who have pre-existing medical conditions.

Preventative Care & Immunizations for Children

All insurance plans written under the ACA are required to provide preventative services and immunizations as recommended by the CDC, and child preventative services recommended by the Health Resources and Services Administration -- all without any cost sharing.

Uniform Explanation of Coverage Documents and Standardized Definitions

The ACA has vastly improved the accessibility of health insurance documents by ensuring that standards represent an accurate summary of benefits and explanations of coverage that are written in language easily understood by the average enrollee, are provided in a uniform format. The explanations provided by insurance providers must explicitly describe coverage features such as exceptions, cost sharing, limitations, and reductions, along with example scenarios that illustrate the application of these features. This aspect of the ACA contributes to informed decision-making by enrollees and acts to propel people toward making a choice about an insurance plan. Research on making choices has shown that when people are offered too many choices or descriptions that are complex and not easy to interpret, they tend to just freeze, stall, and not make a selection.

Provision of Health Education

One provision of the ACA requires the Secretary of Health to develop guidelines for health insurers to conduct outreach that provides information on programs and initiatives that improve health outcomes. Examples of these types of information and programs include care coordination, chronic disease management, improvement of patient safety, prevention of hospital readmissions, and promotion of wellness and health.

Reducing the Cost of Health Care Coverage

Under the ACA, the Secretary can enforce provisions that require health insurance companies to publicly report the ratio of incurred loss or incurred claims, plus the loss adjustment expense and quality to earned premiums (Furman, 2014). These costs are a better reflection of the profit / loss ratio than administrative costs. When non-claim costs exceed 20% in the group market and 25% in the individual market, health insurance companies must refund enrollees by that amount over premium revenue expended; although this refund stipulation expired on December 31, 2013, the reporting requirement continues, enabling the federal government to audit insurers who charge excessively in an effort to get around the intent of the law.

Conclusion

Substantial reforms have been brought to bear on the health insurance industry through the enactment of the Affordable Care Act. The benefits extend beyond people receiving healthcare insurance coverage to enduring fiscal problems and ethical issues that have resulted from the free-wheeling behavior of insurance companies bent on profit over citizen's health and well-being.