In March 2010 the signing into law of the Patient Protection and Affordable Care Act introduced a progression of health care reform measures that will, for the most part, be fully in effect by 2014. This health care reform has changed the way individual and group insurance is written in the U.S. and has extended additional “safety net” benefits under existing programs like Medicare and Medicaid. Many of the law’s provisions, like those to establish high risk pools and, ultimately, health insurance exchanges are guided by federal policy, with the individual states making decisions about specific methods of implementation.
Many aspects of state law that now affect insurance issues like exclusions for pre-existing conditions will be made null and void by 2014 when such exclusions are forbidden. (Children are already protected against loss of insurance for such conditions.) Over the next two years, many state laws will change in the light of federal reforms, so it is more important than ever to track insurance changes in your state, and to educate yourself about insurance regulations when moving to another state. The most fair statement to make is that health insurance coverage in the U.S. as a whole is in a state of flux, and will remain so for the foreseeable future.
Coverage Exclusions and Premium Rates
In a state that is home to 4.5 million citizens, approximately 672,000 Alabamans have no health insurance whatsoever. Currently, state law in Alabama allows insurers to deny coverage, or to exclude a pre-existing condition from coverage, for a period of up to 24 months. Premiums are not regulated and the determination of premium rates is dependent on: the cost of medical care, age, general health, life habits, location, and occupation of the applicant, among other factors.
Alabama Health Insurance Plan
The Alabama Health Insurance Plan is a specific state program intended to address the needs of people who have exhausted their coverage options via a group plan and who are not eligible for coverage under programs like Medicare or Medicaid. The state-administered AHIP offers a traditional indemnity Blue Cross policy as well as a managed care option through United Healthcare to residents who fulfill the stated qualifications. The program is compliant with the terms of the 1996 Health Insurance Portability and Accountability Act (HIPAA).
In order to comply with the provisions of the Affordable Care Act calling for the implementation of insurance exchanges, Alabama is currently weighing its options, with a commission set to make recommendations to serve as the basis for legislation likely to be taken up in the 2012 session.
The state’s temporary high -risk pool for people who have been excluded from health coverage due to pre-existing conditions is managed by the federal Department of Health and Human Services with an allocation of $69 million. The Pre-Existing Condition Insurance Plan covers a range of benefits from primary to specialty care, and includes benefits for hospitalization and prescription drugs.
Medicare is, of course, a federally-managed health benefit primarily for citizens age 65 and older. Alabama Medicare Supplements are designed to work with the federal Medicare program to fill in coverage gaps. There are ten plan designs, all federally standardized. Although initially confusing, it’s important to compare these plan offerings to ensure that your medical needs are being met and that the coverage will work with the doctors and facilities you prefer to use.
As is the case in all states, eligibility limits for low-income families under the Medicaid program are determined as a percentage of the federal poverty level. In Alabama, the percentage is 133 for children from birth through age 5, and 100 percent from age 6 until 19. Pregnant women can gain medical assistance via Medicaid at 133 percent of the FPL, parents at 12.8, and non-elderly disabled individuals who are drawing Social Security at 75.7 percent.