Every year, thousands of Americans find themselves with huge unexpected medical bills that they are unable to pay. And every year, health insurance companies find brand new ways not to pay insurance claims.
In addition, the drop in income after an illness is about five times that of the resulting medical bills. This means that the financial strain relating to medical illness is twofold: income loss and healthcare costs. In 2005 and 2009, Elizabeth Warren co-authored two papers claiming that more than 50 percent of all bankruptcy filings in the U.S. are caused by medical debt.
Another study, led by Dr. David Himmelstein, found that more than 530,000 families each year are financially ruined by medical bills and illnesses. As he astutely observed, most Americans are “just one serious illness away from bankruptcy.”
But wasn’t Obamacare supposed to make things better for Americans? Unfortunately, these numbers show the link between medical costs and bankruptcy since the passage of the Affordable Care Act (ACA) in 2010.
Effective January 1, 2019, there is no penalty for not having ACA coverage. That means healthy people will enroll in short-term plans that are cheaper and offer larger networks, which will destabilize the insurance marketplace in 2020.
What exactly is the Affordable Care Act supposed to cover?
Under the Affordable Care Act, health insurance plans must cover 10 categories of services. These include doctors’ services, inpatient and outpatient hospital care, prescription drug coverage, pregnancy and childbirth, and mental health services. Some plans cover more than the required 10 services.
All plans must offer dental coverage for children, but dental benefits for adults are optional. All plans offered in the Marketplace cover the same set of essential health benefits and must cover the following services:
- Outpatient services (care you receive without being admitted to a hospital)
- Emergency services
- Hospitalization (such as surgery and overnight stays)
- Pregnancy, maternity, and newborn care (both before and after birth)
- Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
- Prescription drugs
- Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care (adult dental and vision coverage are not essential health benefits)
Visit www.healthcare.gov for more information, as specific services may vary based on your state’s requirements. You will see what each plan offers when you compare plans on the ACA website.
How does a Marketplace health insurance plan protect you?
When you have coverage, your plan protects you from high medical expenses in three ways:
- Reduced costs after you meet your deductible. Once your spending for covered services reaches your plan’s deductible, the plan covers 60-90% of your medical expenses.
- Out-of-pocket maximum. This is the total amount you’ll have to pay, no matter how much covered care you receive during a plan year.
- Example: If your plan has a $3,000 out-of-pocket maximum, once you pay $3,000 in deductibles, co-insurance, and co-payments, the plan pays for any covered care for the rest of the year. This provides important peace of mind and protection from very high medical costs.
- No yearly or lifetime limits. Health plans in the Marketplace can’t put dollar limits on how much they’ll spend each year or over your lifetime to cover essential health benefits.
What can you do?
- Call your insurance company and request a full copy of your insurance policy.
- If you have insurance through your employer, call your Human Resources (HR) department and ask what your insurance will pay for.
- Ask about pre-existing conditions.
- Confirm your maximum out-of-pocket for individual, and total annual out-of-pocket for your policy.
- Request your insurance company to provide you with a copy of the MIB report from your file, or purchase a copy of your MIB report at mib.com.
What is MIB?
MIB Group, Inc. is a U.S. and Canadian organization that was formed in 1902. Its underwriting services are used by life and health insurance companies to assess an individual’s risk and eligibility during the underwriting of life, health, disability income, critical illness, and long-term care insurance policies. Supposedly, MIB may help lower the cost of life and health insurance for consumers. Remember, the MIB report is used by your insurance company underwriter; you do not have any control over your insurance policy costs.