2014: A very good year for health coverage

As we say goodbye to 2013, we can also finally say goodbye to a bunch of insurance industry practices that pushed millions of us into the ranks of the uninsured and made it necessary for many others of us to pay good money for lousy coverage. Bring out the bubbly and party hats! The end of the old world of health insurance – and beginning of a more equitable one – is reason enough to celebrate.

January 1, 2014 is without a doubt the most important date in the 3½-year history of the Affordable Care Act, a.k.a., Obamacare. Not only is that the date that policies purchased as of Christmas Eve on the state and federal marketplaces go into effect, it is also the day many of the most egregious – and profitable – practices of the insurance industry become a thing of the past.

Three health reform ‘BFDs’ taking effect

Here are just three of the “BFDs” (to use the term Vice President Biden once used to describe the health care reform law) now taking effect:

• Insurance companies will no longer be able to refuse to sell us a policy just because we’ve been sick in the past or have what they refer to as a “pre-existing condition,” including the ones that many of us are born with or develop in childhood, like juvenile diabetes.
• They will no longer be able to even take our health status into consideration when deciding how much to charge us (although they will be able to charge smokers more than nonsmokers in most states).
• They will no longer be able to charge folks in their 40s, 50s and 60s more than three times as much younger people, ending their ability to force Americans of a certain age to fork over up to ten times as much if not more.

Chances are, you haven’t been hearing about these changes in the media. Reporters and pundits continue to be obsessed with what politicians say about the law rather than what’s actually in it and how it will affect us.

That goes a long way toward explaining why polls continue to show that most people believe the law will have a negative rather than positive effect on them and their families.

Suffering from collective amnesia

And Americans, it seems, have collective amnesia. According to a recent poll, many folks who have been notified that their premiums will be going up next year believe the Affordable Care Act is the sole reason for the increase. They apparently have forgotten that premiums and deductibles have been going up, often by double digits, every year for at least a couple of decades. The reality is that the rate of premium increases since Obama signed the Affordable Care Act has been lower than in many previous years.

Between 2001 and 2011, average premiums for family coverage increased 113 percent, according to the Kaiser Family Foundation, which has been keeping track of the cost of health insurance for years. Not only did premiums increase steadily in the years before the law was passed, but employers also shifted more of the cost of the premiums to their workers and increased deductibles every year.

The four percent increase for employer-sponsored family coverage last year was much lower than the average increase in the decade before ACA became law, according to the folks at Kaiser.

“We are in a prolonged period of moderation in premiums, which should create some breathing room for the private sector to try to reduce costs without cutting back benefits for workers,” Kaiser President and CEO Drew Altman said in August when his organization released the most recent health insurance numbers.

Health reform gains by the numbers

Chances are you missed that news. Here are some other numbers you might also have missed:

• An estimated 3.1 million young adults have been added to the insurance rolls since the provision of the law allowing young people to stay on their parent’s policy until age 26 went into effect in 2010.

• Policyholders received $1.2 billion in rebates in 2011 and $2.1 billion in 2012 as a result of a provision in the law that requires insurers to spend at least 80 percent of our premium dollars on actual medical care, rather than overhead. If they don’t, they have to issue rebate checks.

• Medicare beneficiaries have saved an estimated $7 billion on prescription drugs as a result of the provision of the law that closes the gap – known as the “doughnut hole” – in the Medicare Part D drug program. That number will increase substantially in years to come as the doughnut hole closes a bit more. It will be closed completely in 2020.

• More than 25.4 million people covered by the original Medicare program received at least one preventive service at no cost to them during just the first 11 months of 2013, according to the Centers for Medicare and Medicaid Services. Before the Affordable Care Act was passed, people in the original Medicare program had to pay for preventive services. As a consequence, many did not get the care they needed.

• Millions of Americans who have not been able to afford coverage will finally have it as of January 1. Although signup for health coverage was slow during the first two months of open enrollment on the exchanges because of problems associated with HealthCare.gov, the federally operated health insurance marketplace, enrollment has surged since most of the problems were fixed.

• By the end of November, an estimated 1.2 million people had enrolled in new health plans, and most of them qualified for tax credits to help them pay for coverage. The numbers increased dramatically as the Dec. 24 deadline for signing up for coverage approached. More than two million logged on to the federal site the day before the deadline.

Many of the newly insured are among the millions who have been unable to afford coverage in the past or have not been able to buy it at any price because of the practices of the insurance industry. Practices that, at long last, end on New Year’s Day, 2014.

To learn more about how the reform law is affecting us, check out my new eBook, Obamacare: What’s in It for Me? What Everyone Needs to Know About the Affordable Care Act. It’s available now – just in time for the holidays – on Amazon.com.