You May Want To Reevaluate Your Health Coverage

It's open enrollment time, the time of year when employees can make changes to their health plans. This year, the new health law changes some co-pays, coverage for adult children and the rules for flexible spending accounts. NPR's health policy correspondent Julie Rovner talks about the changes.

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TONY COX, host:

This is the most important time of year for people making decisions about their health care plans. It's open enrollment. And this year, open enrollment is more complex than it's been in years past. The new health care overhaul complicates things for those of you who are faced with making new choices and soon.

Today, we look at some of the provisions that may affect your current coverage with NPR health policy correspondent Julie Rovner.

If you have questions about what's changed, whether you need to switch plans or why you might need a little less in that flexible spending account, call us. Our number, 800-989-8255. The email address is talk@npr.org.

Julie Rovner joining us now in Studio 3-A. Julie, welcome back.

JULIE ROVNER: My pleasure.

COX: This is a very busy time of year for a lot of people, some big important decisions to be made. Let's begin with what has changed under this new health law.

ROVNER: Well, most people are going to see new benefits, so a lot of new benefits that are taking place in kind of a rolling way. They started September 23rd. That was the six-month anniversary of the signing of the law, but they started for a lot of people with their next plan year. So for a lot of people, they'll be seeing them starting now, as they do their open enrollment for next year.

These are things like letting adult children either get back on their parents' plan or stay on their parents' plan until they reach the age of 26. There will be no more lifetime limits, no more lifetime benefit caps. So if you've had a two million or a three million or a $5 million cap on benefits, that will go away. That obviously doesn't affect most people. But if you have a serious ailment or if you get a serious ailment, that could be something that affects you.

There will be no more restriction on annual - there will be no more annual limit restrictions. Some plans have restrictions of, perhaps, you know, 50 or 75 or $100,000 a year. Those will gradually go away over several years. It starts at $750,000 and gradually moves up until those get phased out.

There will be a broader choice of types of doctors. If you're in the type of plan where you have to go through a primary care doctor to get to an obstetrician-gynecologist, for instance, that will no longer be allowed. There will be free access - excuse me, there will be free preventive care with no co-pay. That's also going into effect for Medicare, so that's not just people who have regular health insurance but also people who have Medicare will be given preventive care with no co-pays. So there will be some changes to Medicare, too.

COX: So we know there are changes for those who have a plan. What if you're going in to a new plan? What should you look for?

ROVNER: Well, again, you should look for those types of things. You should look for - obviously, there are - you know, how much you're going to be paying.

Now, premiums did go up considerably this year. This is nothing new, and this is not - mostly not related to the new law. There were some small benefit increases - there were some small premium increases related to the new law, usually one to two percent in the average plan related to some of the benefits that I was talking about.

There was just a report out yesterday actually from The Commonwealth Fund - this is a nonprofit research foundation - that found that from 2003 to 2009, the average premiums jumped 41 percent. So this is just the cost of health insurance going up. There's nothing in the law that would really start trying to ratchet that down yet. That's something that that the sponsors of this law hope will happen but not for several years, so there's been a lot of blame thrown round that these premiums are going up because of this new law. That's by and large not the case.

The reason that premiums are going up - one of the big reasons that premiums are going up so much next year is that because of the bad economy of the last couple of years, a lot of people put off getting medical care and a lot of those people whod put it off got medical care in 2010 and so, ensurers were seeing that increase in use, and they're building that into next year's rates.

COX: Now, I'm assuming we have been talking about individual health plans so far. Let's talk about small business, because that was a big part of the discussion and the controversy over the new health law and what it would do. So if I have a small business, what does this mean to me?

ROVNER: Well, actually, we were talking about all health plans.

COX: Oh, were we?

ROVNER: We were talking about group health plans. We were talking about your employer plans. These were these are new benefits for everybody. In fact, many of these benefits are for these plans, including some of these what we call the grandfather plans. Remember, the president had said, if you like your plan, you don't have to change. Some of these new benefits don't go into effect if you're in one of those what they called the grandfather plans. Some of these benefits where there regardless of that. Some, of the other benefits don't necessarily take place, and it's sort of benefit by benefit.

But a lot of these benefits were across the board. Individual plans, small group plans, large group plans, these are - were what they called the patient's bill of rights that we argued about 10 years ago. These were all the early benefits. So those these were new plans for everyone.

COX: For everyone. All right. Let's take a call. This is Russell from Cincinnati, Ohio.

Russell, you are on TALK OF THE NATION, with Julie Rovner. Go ahead.

RUSSELL (Caller): Yeah. My question is I had a hernia repair about a year ago on a plan that's about to end at the end of the month. And I have switched jobs to being self-employed for awhile, while looking for a new job with a new corporation. And so, if that policy lapses and then, let's say, for whatever reason the hernia comes back and I need a revision of the repair - which is one of my big fears in life - and I don't have a policy, and I go to get the policy, is this now a preexisting condition where I owe another 50,000 out-of-pocket?

COX: Russell, thanks for that. What about it, Julie?

ROVNER: Yeah. Unfortunately, the preexisting condition exclusions, now that's one of the things I didn't mention. There will be no more preexisting condition exclusions for children. That was one of the things that took effect September 23rd, again, for as I said for plan years starting now. But for adults, that doesn't kick into effect until 2014. So, again, if you allow if you could maintain continuous coverage and this is from a law that passed in 1996 you can't have preexisting condition exclusions. If you're in a group plan and you go from group plan to group plan, you're not allowed to be excluded for preexisting condition exclusions.

But if you allow your coverage to lapse for more than 63 days, then you can be required to wait. And it's up to, I believe, 12 months. So you really should if that's something that you're concerned about, you really should maintain coverage. If your plan is lapsing, you can use what's called COBRA continuation, which can be very expensive. But if that's something you're really worried about, it's something that you might want to look into while you're looking for another job.

COX: Are there limits in terms of what you can accrue as far as the expenses that are a part of this new law? In other words, can an insurance company kick you out because you have cost them too much because of your condition?

ROVNER: Not anymore. That was that's another one of the benefits that started. And that was that's one of those benefits that's across the board. It doesn't matter if you're one of the so-called grandfather plans or not. There will be no more insurance rescissions, that's called, where they cancel your policy retroactively, basically, after finding some technicality where they see that, you know, oh, you were diagnosed with cancer. We don't want to pay for you. We're going to find out that you forgot to say that you were treated for, you know, acne in, you know, 1993 and didn't put that on your application. That can no longer happen.

They can still cancel your policy for out-and-out fraud, but no longer can they find these really little, you know, tiny accidents, which is, you know, really things that people left unintentionally or - in some cases - unknowingly on their applications and used that as a premise to cancel their insurance after they make a large claim. And there was a lot of evidence of that. And that will now, henceforth, be illegal.

COX: Here's an email that comes from Oakland, California, from Bruce. What happens to extra funds in a flexible spending account at the end of year?

ROVNER: Funds now, there's different kinds of these accounts. But in an actual flexible spending account, those funds go back to your employer if you don't spend them. And this is one important change that people need to know about while they're deciding how much money to put in their flexible spending account for next year.

Starting in 2011, those funds can no longer be used for over-the-counter medications. There's a small change you know, there's one little out, which is that if you go to your doctor and get a prescription the for over-the-counter medications, which you can actually do, then you can have it reimbursed. But, in general, you know, your Claritin and your Advil and your Tylenol and your Aspirin will no longer be reimbursable, as they have been for the last several years.

So you may want to put away a little bit less money for those, unless you want to go to your doctor. If it's something that you take a lot of and you spend a lot money on it, it might be worth it to go to the doctor and get the doctor to write a prescription. And then you will be able to continue to be reimbursed for it. But, generally, that's use-it-or-lose-it money, that if you don't use it by the end of the year, it goes back to your employer.

COX: Our guest is Julie Rovner, the NPR correspondent who is - knows everything, the ins and outs about health care reform.

And we are taking your questions at 1-800-989-8255. Our email address is: talk@npr.org.

Let's go to Tulsa, Oklahoma, where we have Warren standing by. Warren, welcome. You're on the air with Julie Rovner.

WARREN (Caller): Hi. I have a lot of small business owners that are concerned about the costs that are going to be incurred by them if they don't currently have a plan. Is it going to be required that they then implement a health care plan for their employees?

ROVNER: No is the short answer. For very small employers - and actually, the White House put out a fact sheet today because this is going sort of unnoticed and unused. There is a tax credit a large tax benefit for small employers who voluntarily cover their workers. But, unless you have 50 workers, there is none no requirement. You don't have to cover your workers. If you have over 50 workers, you still don't have to cover your workers. However, if your workers then go into these there'll be new insurance exchanges.

And if they go into the insurance exchanges and buy their own coverage, and if they are low-income enough to then get a subsidy from the government, then the employers will be basically charged $2,000 a worker. It's called a free-rider penalty, because basically now, rather than covering those workers, those workers are going in and getting a government subsidy. So the government's going to come back to that employer and charge that employer for not providing coverage. So it's a little bit of a backdoor mandate. But unless you have 50 workers, there's no requirement whatsoever.

COX: Our next caller is from Preston, Idaho. It's Hugh.

Hugh, welcome to TALK OF THE NATION. You're on the air.

HUGH (Caller): Yes. I'm a retired military, and I'm under TRICARE. But I - my two youngest children - one is 22. She's due to graduate from college. She's covered by health care now. And I've got a son who's due to graduate from high school, and he's 18. But I understand under the TRICARE program - which, you know, after putting 20 years in the military was - that my daughter will no longer be covered because she's not still in school, and the same thing with my son, where - I understand everything else can go until age 26. Is that correct?

ROVNER: That is correct.

COX: Hugh, thank you.

ROVNER: That is correct. There was a lot of concern about this. A lot of the people who are in TRICARE were very worried about changes. You know, they were pretty much - they were very happy with TRICARE, which is a very good program for retired military people, were afraid that it would get changed. They didn't like the possibility of changes, and they very much wanted to keep TRICARE out of all the changes that were going to come.

And Congress basically did what they were asked, and TRICARE was not made part of this. Well, come to find out, an awful lot of people in TRICARE have these kids age 22 to 26 that say: How come we're not getting this benefit? And the answer is you said you didn't want to be part of this. So, basically, people in TRICARE are not going to be part of - they're not going to be a part of any of the changes that they're not going to like, but apparently, they're not going to be part of the changes that they might have liked, too.

Now, there have been efforts to include TRICARE in this. So far, at least not to my knowledge, they have not come to fruition yet. I know there's - there are a lot of efforts to add this benefit, though, to TRICARE. But that's the story of why TRICARE is not part of this.

COX: We're talking with NPR health policy correspondent Julie Rovner about the changes in open enrolment under the new health law. You are listening to TALK OF THE NATION, from NPR News.

All right, Julie, let's take another call. This one comes from Tammy, actually, in - where Tammy is? Tammy's in Cary, North Carolina.

Hello, Tammy.

TAMMY (Caller): Hi. How are you, Tony?

COX: Fine, thank you.

TAMMY: Good. I am calling - I just - I'm a psychologist, and I was wondering about any - if Julie had an insight into mental health coverage changes with the health care reform.

COX: Thank you for that call. That's interesting. We have - we don't talk a great deal about that.

ROVNER: Well, no. The mental health parity bill passed the year before last, so that's should be fully in effect. And I think because that now requires that mental health care be treated at the same - to the same degree as all other ailments, I think that Congress really saw no reason to do anything else with it. So I don't believe that there's anything in particular that would treat mental health any differently than anything else.

COX: Cathy is about to join us from St. Augustine, Florida.

Hello, Cathy. You're on TALK OF THE NATION.

CATHY (Caller): Hi. My question is I have COBRA coverage, and I just got married this year. And I was wondering if I could add my spouse to my plan. I'm actually getting a reduction in my payments because of the government subsidies. And I was wondering if the family plan would also be included in that, and if I could add a spouse to a COBRA plan.

COX: Cathy, thank you.

ROVNER: You have stumped me. I don't know. I honestly don't know.

COX: That doesn't happen very often.

ROVNER: And it doesn't happen very often. I honestly don't know. You should go back and ask whoever your COBRA administrator is or your former employer. I don't - I know when you elect COBRA, you can choose to take individual or family coverage, but I don't know if after you've elected it whether you can change.

COX: If this were a contest, we would have to send her a prize, wouldn't we?

ROVNER: Yes, we would.

COX: Absolutely.

ROVNER: She'd get one of the Ken Rudin T-shirts.

COX: Absolutely.

(Soundbite of laughter)

COX: Greg, welcome. This is Greg from Maryville, Missouri. Welcome to TALK OF THE NATION.

GREG (Caller): Yes. Thank you for taking my call. I'm a small business owner. And in the last couple of months, I had the occasion to shop insurance for my employees, which we do every year - because it's such a big part of our costs overall - and usually, the independent broker that goes out and researches the market and brings me back the selections of carriers to pick from in the various coverage plans. In the past several years, I've had as many as 10, 12, maybe 13 different local, smaller carriers that he brought back to me to compare against some of the other larger carriers, the Blue Cross, Blue Shields and the like and, you know, that's out there (technical difficulties).

COX: Greg, let me interrupt you to just ask you to get your question in as quickly as you can, because the clock is against us.

GREG: The consolidation in the market, the (technical difficulties) are going away, dropping like fries, and they tell me that it's due to the excess of regulation that they see coming. And I'm wondering if that's really the case or, if there's something else (technical difficulties).

COX: Thank you very much for that. I don't know if you can answer that or not.

ROVNER: No, market consolidation has - I don't think it's because of excess regulation, because it's happening all over the country in places where there's a lot of regulation and not a lot of regulation. I think they're hoping that when there are these new insurance exchanges starting in 2014, there'll be more to choose from, better choices. But no, market consolidation had a lot more to do with just the insurance industry buying up its competition.

COX: A lot happening at the end of 2010. We're going to be right back here again at the end of 2011, aren't we, with the next round?

ROVNER: Yes. Yeah, this is just the beginning. This is pretty small changes for most people.

COX: Julie Rovner is an NPR health policy correspondent, joining us here in Studio 3A.

Julie, thank you, as always.

ROVNER: You're welcome.

COX: Tomorrow, it is TALK OF THE NATION: SCIENCE FRIDAY. Ira will be here as the talk turns to one outgoing Republican's views on climate change - skeptics in Washington - and a look at America's climate IQ.

I'm Tony Cox. This is TALK OF THE NATION, from NPR News.

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