Your Rights & Protections Under the Affordable Care Act
The Affordable Care Act (ACA) has provisions designed to protect you from abuses by insurance companies. The insurance industry was regulated by the government before the ACA, but the intent of the law is to take those protections even further by doing the following:
- Requiring insurance companies to provide a summary of your benefits in plain and simple language
- Allowing you to choose your doctor and use any emergency room
- Eliminating preexisting conditions as a reason to deny coverage and raise premiums
- Eliminating annual and lifetime limits on coverage
- Outlawing the retroactive cancellation of insurance policies
- Providing a process for independent, third-party review of any claims denied by your insurance company
- Giving you the right to appeal coverage decisions by your insurance company
- Regulating how your premium is spent
Summary of your benefits
The ACA requires insurance companies, including those participating in the Health Insurance Marketplace, to provide a Summary of Benefits (SBC) and a Uniform Glossary of terms. The SBC is a description in plain and simple language of the benefits and coverage the plan provides. The SBC must be available from all plans, including grandfathered plans or those job-based and individually purchased plans in effect before the ACA became law on March 23, 2010. The SBC may also be available in your native language. Together, the SBC and Uniform Glossary can be used to compare plans because all the plans are required to use the same standard forms.
Choosing your doctor and emergency room
The ACA requires that insurance companies allow you to choose your doctor and your child’s pediatrician and to use any emergency room from your plan’s provider network. If you choose to use a provider outside of your network, you shouldn’t have to get approval first or pay a penalty; however, insurers can charge higher rates for out-of-network providers. You also no longer need a referral for obstetrician/gynecologist (OB-GYN) services. However, if you’re covered by a grandfathered plan, you may not have the same choices.
Preexisting conditions
About 27% of Americans under age 65 have some type of preexisting condition1—a known medical condition that you have before you apply for insurance.
Because you’re visiting this site, it’s likely that you or someone you love has one of the most common preexisting conditions—heart disease, which is the leading cause of death for Americans.2 Before the ACA protections, a preexisting condition such as a heart disease could’ve made it difficult to get coverage; cost you higher premiums; and, in some cases, led to loss of coverage.
Under the ACA, insurance companies can no longer limit or deny coverage for anyone, children or adults, based on preexisting conditions, and your premiums may not be higher than anyone else of the same age, sex, and location. That includes Medicaid and the Children’s Health Insurance Plan (CHIP).
The exception to this rule is if you bought an individual plan for yourself that’s grandfathered, which is a plan in place before the law changed. These plans aren’t required to cover preexisting conditions, but it’s important to check your plan’s documentation. Your plan may offer coverage of preexisting conditions, even though it’s not required by law for grandfathered plans.
If your plan doesn’t cover preexisting conditions, you may want to consider buying a new plan from your state’s insurance exchange.
Annual and lifetime limits
Before the ACA, many plans limited the benefits that could be received both annually and over the course of the insured’s lifetime. These limits were potentially devastating for those who had to rely on their savings to cover the cost of expensive and, in some cases, lifesaving treatments.
To address this problem, the ACA eliminated lifetime limits for essential benefits for all plans, including grandfathered plans, that are job-based and individually purchased plans in effect before the ACA became law on March 23, 2010. At a minimum, essential health benefits include items and services within the following 10 categories:
- Ambulatory patient services
- Emergency services
- Hospitalization
- 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
If you have an individual plan—that is, one you purchased directly from an insurance company—it’s a good idea to check with your plan administrator to be certain that you understand any annual limits that may apply. If your plan is still subject to annual limits, you may want to consider changing coverage when you have the opportunity to renew or change your coverage.
Cancellation of insurance policy
Before the ACA, if your insurance company found a mistake in your application, it could cancel your coverage and have you reimburse the company for money spent on your care.
Under the ACA, insurance companies can no longer retroactively cancel your insurance coverage unless you deliberately lie or omit information about your condition, symptoms, or treatment received or fail to pay your premiums. This rule applies to all plans, including job-based and individually purchased grandfathered plans—that is, plans purchased before March 23, 2010.
If you or any other member of your family covered by the policy (for individual policies) or your employer (for group coverage) makes an honest mistake or omission on your application or other paperwork, such as a change in status (for example, divorce), it will no longer be grounds for cancellation as long as you have paid your premiums in full and on time. However, be aware that your coverage can be cancelled going forward if, for example, your employer realizes a mistake or oversight such as an employee change in status from full- to part-time employment.
If an insurance company does decide to cancel your policy, it must give you at least 30 days’ notice to appeal or find other insurance.
Appealing coverage decisions
If your insurance company denies your claim for a treatment or service, the ACA requires that the insurance company tells you why the claim was denied and the process for appealing its decision. If you decide to appeal the decision, you would first ask your insurance company to review and reconsider its decision, which is called an internal appeal. If the company still denies your claim, it must notify you of your right to request an external review. An external review is done by an independent organization, often referred to as a third party.
- Internal appeals – If the insurance company denies your claim, it will have to tell you why and that you have a right to file an internal appeal. You can then ask your insurance company to reconsider its decision and the insurance company is required to review it. The insurance company must also notify you of your right to request an external review if it still denies your claim and of a Consumer Assistance Program.
- External review – If the insurance company still won’t pay the claim, the law gives you the right to have an external review by a third party, who will make the decision.
Rules regarding the number and levels of internal review may vary according where you live and the type of plan you have. And grandfathered plans aren’t subject to these same requirements.
You can find more information on how to file an appeal at HealthCare.gov.
Regulating how your premium is spent
The ACA provides some protection from rapidly rising premiums and insurance companies that are using too much of your premium for their own purposes instead of providing and improving your healthcare coverage.
- Rate review – The ACA requires that companies publicly justify any increase of 10% or more before raising premiums. This rule doesn’t apply to grandfathered plans.
- 80/20 rule – This rule, also known as the Medical Loss Ratio (MLR), requires that insurance companies spend at least 80% on “healthcare and quality improvement activities” instead of “administrative, overhead, and marketing costs.” The rule bumps up to 85% for companies selling to large groups, which are usually considered 50 or more employees.
If your insurance company doesn’t comply with the rule, you’ll receive one of the following:
- A rebate check
- A lump-sum deposit to the account used to pay the premium (credit or debit card)
- A reduction in your future premium
The 80/20 rule doesn’t apply to insurance companies with fewer than 1,000 plan holders in certain states or markets, but it does apply to all individual, small-group, and large-group health plans, whether or not they are grandfathered.
These protections provided by the ACA are intended to help you and your family get affordable, quality care. Don’t hesitate to ask questions and check with your plan administrator if you don’t understand something. You’re paying for quality care, and you should expect to receive it.