When the Affordable Care Act (ACA) took effect on Jan. 1, 2014, individual and small group health insurance policies that qualified as minimum essential coverage under the new law were required to cover a set of healthcare service categories known as essential health benefits.
And according to the ACA, the essential health benefits must be equal in scope to benefits offered by a “typical employer policy.”
Under the essential health benefits ACA provision, major medical insurance policies sold on and away from the state-based and federally facilitated health insurance exchanges must include coverage for at least the following 10 health service categories:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
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Are essential health benefits “free”?
The short answer is no, most essential health benefits are not really “free.” The costs of these services are factored into your premium payment to the insurance company.
Essential health benefits are generally also subject to cost sharing, meaning you’ll pay a portion of the costs via deductible, copay and/or coinsurance.
However, most preventive services are not subject to your deductible, so you may have the costs of these services mostly covered by your insurance even before you meet your policy’s deductible.
So, how can you use your essential health benefits?
Let’s look a little more closely at some of the essential services included in an ACA-compliant major medical policy to get a better understanding of how and when to use them.
Preventive, wellness services and chronic disease management
Preventive care benefits are covered with no cost sharing for you if the service is on the list of covered preventive care.
Lists of preventive services for all adults, women, and children are available. These benefits cover such things as blood pressure and cholesterol screenings, mammograms, PAP smears, and developmental screening for children under 3 years of age.
Taking advantage of these benefits can keep small health issues from becoming large issues that are more serious and more expensive to treat.
Ambulatory patient services
This benefit includes the care you might receive without being admitted to the hospital — such as visits to doctors’ offices or clinics, and hospital care provided on an outpatient basis. Like preventative services, these benefits may make it easier to keep on top of potential health issues by making healthcare more accessible before an issue becomes critical and requires urgent care or emergency services.
Your health insurer cannot impose higher cost-sharing levels (i.e., charge you more money out-of-pocket) for out-of-network hospital emergency room care. So, if you are hurt or ill, you can go to the closest emergency room without worry of being penalized by your insurance company.
This benefit also extends to ambulance transport, including air ambulance.
ACA plans aren’t the only types of policies that provide coverage for emergencies. You may want a temporary policy with a lower premium and less benefits, for example, if you don’t think you need the other essential health benefits.
If you prefer to pay for your routine medical care out of pocket but want some level of insurance coverage for serious illnesses and accidents that result in hospitalization and emergency services, you might consider a short-term medical policy.
Short term medical policies are not ACA-qualifying coverage, meaning that they are not regulated under the ACA. In addition to not covering all of the essential health benefits, they usually do not cover pre-existing conditions, meaning you’re subject to medical underwriting and your application may be denied.
If you’re interested in comparing short term medical policy costs and options, the best way to is to get a quote. It just takes a few minutes to get your results.
Hospitalization coverage includes the full range of inpatient care, including treatment by doctors and nurses, inpatient lab and pharmacy services, and surgical care. Without this essential benefit, even a brief hospital stay for a broken bone or the removal of an appendix could create a financial hardship for the average family.
Remember, even with this hospitalization coverage, you will probably have out-of-pocket costs with a hospital stay since you’ll be responsible for your plan’s annual deductible and coinsurance.
If you have a high deductible plan and you want to get additional coverage to help pay for your major medical out-of-pocket costs, you might want to consider gap or hospital indemnity insurance.
Medical gap insurance premiums are relatively affordable and you can enroll year-round.
The out-of-pocket costs associated with being hospitalized can add up quickly and you may find that you have to pay your entire annual deductible as the result of one 2-3 day stay in the hospital.
Supplemental hospital indemnity plans provide fixed benefits for medical services associated with being hospitalized due to an illness or injury.
Get a quote to find and compare hospital indemnity policies in your area.
Maternity and newborn care
This health benefit includes maternity, delivery, and newborn care. Prenatal checkups and tests for such things as gestational diabetes, Hepatitis B, and Rh Incompatibility are generally covered under preventive care.
Despite the ACA expanding access to maternity and newborn coverage, access to quality healthcare for pregnant women and new mothers is still a pressing need in the U.S.
The U.S. has the highest rate of maternal mortality of any developed country. And in fact, the maternal mortality rate has been rising steadily over the last 15 years (Sep. 2018).
According to a recent analysis of data from 2011 to 2017 from the Centers for Disease Control and Prevention (May 2019):
- For every 5 women in the U.S. that die as a result of pregnancy and childbirth, 3 could have been saved if they had received better medical care.
- Heart disease and stroke caused more than 1 in 3 pregnancy-related deaths, with other leading causes including infections and severe bleeding.
- Black and American Indian/Alaska Native women are about 3 times as likely to die from a pregnancy-related cause as white women.
Most of these deaths are preventable, with contributing causes of death including access to appropriate and high-quality care, missed or delayed diagnoses, and lack of knowledge among patients and providers around warning signs.
Access to health insurance (and healthcare) has improved since the ACA. In 2009, (before the ACA) around 20% of women aged 18-64 years old had no health insurance coverage.
By 2017, that number had dropped to around 11%. Having coverage improves access to healthcare. Studies repeatedly demonstrate that when people are uninsured they are less likely to receive preventive care and services for major health conditions.
In 2013 (before the ACA), three out of four health plans in the non-group insurance market did not cover delivery and inpatient maternity care. Now that it’s an essential health benefit, this coverage is included in 100% of major medical health plans.
If you need major medical insurance and are pregnant, you cannot be denied coverage if you qualify for a special enrollment period. If your income qualifies, you may be able to get subsidies to purchase a policy on the ACA exchange, or obtain coverage through Medicaid (which does not require special enrollment).
If you are not clear on the maternity and newborn care that is covered by your major medical policy, contact your primary care doctor or OBGYN or learn more about this essential benefit on Healthcare.gov.
Mental and behavioral health and substance use disorder services
ACA plans include coverage for inpatient and outpatient treatment for mental health and substance abuse treatment.
Before the ACA, 45% of 2013 non-group health insurance policies did not cover inpatient and outpatient services substance abuse treatment and 38% did not cover inpatient and outpatient mental/behavioral health services.
To find a mental health professional, start by calling your insurer’s information number. The National Alliance on Mental Alliance suggests getting at least three names and numbers and clarifying the specific benefits covered by your policy – can you make a direct appointment with a psychiatrist? How does your plan cover visits to therapists?
For other drugs, your policy’s cost-sharing rules apply. Your policy may require that you start with the most cost-effective and least-risky drugs to see if they work, before trying more expensive, riskier options.
If you have a chronic condition, such as diabetes or high blood pressure, the cost of needed prescription drugs could be very difficult to afford if some coverage isn’t included in a health insurance policy.
If your major medical insurance policy doesn’t provide adequate prescription drug coverage for medications you’re taking, a drug discount program like the Rx discount card may be able to help.
Rehabilitative and habilitative services
Both therapy and necessary devices are covered for rehabilitation and habilitation benefits. Rehabilitative benefits can include occupational or physical therapy following an accident or stroke. Habilitative services include speech or occupational therapy for a child who may not be talking or walking as expected.
Without this benefit, both of these types of medical services can add financial strain to a situation that is probably already very challenging.
Lab work considered to be preventive care is covered with no cost-sharing, so potential health issues can be dealt with proactively.
Other necessary lab work, such as to diagnose symptoms or that are needed when you’re admitted to the hospital, is covered under your insurance policy’s cost-sharing guidelines (meaning you’ll pay something out of pocket).
Pediatric services, including oral and vision care
Like other essential health benefits, particularly preventative care, taking advantage of these services for your children can help them avoid potential problems that could follow them to adulthood.
Important note: Dental coverage is an essential health benefit for children. This means if you’re getting health coverage for someone 18 or younger, dental coverage must be available for your child either as part of a health plan or as a stand-alone plan. But while dental coverage for children must be available to you, you don’t have to buy it.
Check with your family dentist and/or pediatrician learn more about your pediatric benefits and to plan for your child’s vision and dental care.
What is NOT Included as an Essential Health Benefit?
While the essential health benefits include a wide range of essential healthcare services, there are many common medical services and procedures that are not included, so are not required at the federal level.
These services may still be required at the state level, and as a result may or may not be available as part of an ACA-qualifying health plan depending on where you live.
If not available, you may be able to purchase additional insurance coverage for some of these services, and others you’ll have to pay for entirely out of pocket, or potentially with a health savings account (HSA) if you have one.
While not an exhaustive list, examples of these types of services include:
- Infertility treatment
- Elective cosmetic surgery
- Weight loss surgery
- Dental + vision services for adults
- Long-term care
- Chiropractic + acupuncture treatments
- Travel vaccines
Supplemental Dental Insurance
Remember, dental coverage is not included in ACA health plans for adults. Dental insurance premiums are typically affordable, policies are guaranteed issue, and you can enroll anytime throughout the year.
Regular cleanings and prompt care for cavities or other dental problems are important for your overall health, so cover your mouth today!
Virtual Doctor’s Visits with Telemedicine
Why leave home or take time off work to go to an urgent care or doctor’s office to get a routine diagnosis for a sinus infection, cold, flu or pink eye?
Instead, speak or Skype with real doctors, get your diagnosis and care plan, including prescription drugs if needed, from the convenience of home or work, or anywhere you have an internet connection or phone service. Telemedicine is not insurance.
Non-ACA Medical Plan Option: Short Term Medical
Short term health insurance is intended to be used temporarily, when you’re between major medical plans. Because of the essential health benefits and coverage for pre-existing conditions, major medical health insurance provides more coverage and consumer protections, such as no annual or lifetime limits on benefits.
However, if you don’t qualify for ACA subsidies or simply prefer to pay less premium for fewer benefits with an understanding that you’ll pay for more of your routine healthcare out of pocket and other expenses, you can consider a short term health plan.
Short term health plans are not available in every state and many states have increased regulation of these plans in 2019. They don’t cover pre-existing conditions, which is one of the reasons premiums are lower, and you can apply anytime throughout the year.
The best way to find out if short term health insurance is available to you is to get a quote. It just takes a couple of minutes to get your results.
Summary + Next Steps
We’ve covered what the ACA’s essential health benefits are and how they may be able to help you get and stay healthier.
If you want more information before you purchase an ACA-compliant major medical policy, check out:
- What is Individual Major Medical Insurance + Is it Right for You?
- Health Insurance Alternatives to Obamacare
In addition to the resources above, you can call 888-855-6837 to speak with a certified insurance agent to discuss your options.
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