Insuring Your Health: What will change under the new law
For many years, Ric and Jill Lathrop held their breath when the annual open enrollment period for their health insurance plan rolled around. Their two boys, now 12 and 14, both have severe hemophilia, and each needs twice-weekly injections of a blood clotting replacement factor that costs roughly $250,000 per person per year. The couple lived in fear that their health plan would put a lifetime limit on their benefits.
In 2005, that's what happened. The Oshkosh, Wis., hospital where Ric Lathrop worked as an MRI technician instituted a $2 million lifetime cap on benefits for the entire family. Rather than wait for their benefits to run out, the Lathrop family relocated to Illinois, where Ric Lathrop got a job at a hospital in Peoria; along with the job came insurance without lifetime limits.
If that coverage had changed, the Lathrops might have had to move again . . . and maybe again. But the federal health-care overhaul makes further wandering unnecessary. Starting Sept. 23, the new law requires that when health plans renew their coverage for the coming year, they eliminate lifetime limits on coverage.
"It gives us a lot of reassurance to know our kids can have more freedom," says Jill Lathrop.
The elimination of lifetime caps on benefits is one of several provisions that will begin to take effect Sept. 23, six months after enactment of the law. Health plans don't have to implement the provisions until their next annual renewal date; since most plans begin their coverage year on Jan. 1, that's when many consumers will start to see changes.
As you sign up for coverage this fall, here's what to look for.
Extension of young adult coverage
All health plans must permit adult children to remain on their parents' plans until age 26. It makes no difference if the young adults are married or financially independent. As long as children don't have an offer of coverage from their own employer, parents can keep them on their plan.
If you want to put an adult child on your plan, you'll be given an opportunity to do so during a special enrollment period. At most companies that will coincide with open enrollment, say benefits consultants. Even if it doesn't, insurers and employers are required to notify you of the special enrollment period. Look for that notice.
Under the law, plans can't charge more for adult children than for dependents younger than 19. But they can increase the cost of family coverage overall, and many will do so, according to an employer survey released last week by the benefits consulting firm Mercer. The survey found that more than half of employers that plan to shift more costs onto employees' shoulders will do so by disproportionately increasing the cost of family coverage compared with employee-only coverage.