As law sets in, check insurance changes

Flexible spending accounts among items that will be impacted in 2011

The first baby steps of the nation’s health care overhaul have taken effect. That means most insurance plans will change, at least slightly, when renewed.

“A lot of times people don’t understand all the changes going on around them,” said Ingrid Lindberg, customer experience officer for CIGNA, the insurance company. “Really, truly understand what your employer is offering you this year.”

Some consumers who need to be especially alert as the paperwork arrives include: those who use flexible spending accounts for medical expenses, parents of uninsured adult children under age 26, parents of kids with pre-existing conditions and anyone who plans to get preventive care in the coming year.

Everybody needs to study the costs: Most Atlanta companies and most employees will pay more for health care again next year.

Workers for years have been able to set aside tax-free dollars into an account that could be used within the year to pay for everything from insurance deductibles and eye surgery to Advil and allergy pills. But starting in 2011, the accounts will no longer pay for over-the-counter medicines unless a doctor writes a prescription for it. And by 2013, contributions to the accounts will be limited to $2,500.

“That’s a big change,” said Lindberg, of CIGNA. “Really plan for how you are going to use that and know what you can and can’t use it on.”

An already-enacted element of the health law expected to impact many consumers is the requirement that insurers allow parents to add their adult children up to age 26 to their health plans.

Andrey Pashnyak, a 21-year-old from Lawrenceville, is using that provision to get insurance for the first time in years.

Pashnyak has a relatively mild form of hemophilia, a bleeding disorder. While a state program helps provide expensive medications for people with the rare disease, insurers outside of group plans generally refuse to cover anyone with the condition.

Pashnyak said he was told on Friday that he now has insurance coverage that should pay for medications he needs for his condition, plus the care he may need for anything else. “I’m just super stoked right now,” said Pashnyak, who is attending school to become a paramedic and who also runs his own pressure-washing business.

He said that in the past he tried to treat his health problems over the counter and simply tried to avoid getting the sort of injuries that could put him at risk. “I’m so exited,” he said, knowing many of his worries in life would be eliminated with insurance coverage. “I’m so blessed.”

Other significant changes to plans include a ban on lifetime limits on insurance policies, something that will be an enormous help in rare cases where someone’s health condition requires expensive, ongoing treatment.

Annual limits must be phased out, under the law. Insurers may no longer deny coverage to children because of a pre-existing condition. And adults with pre-existing conditions who have been turned down for coverage and have been uninsured for at least six months can buy coverage through a new high-risk pool. Some states are running their own programs. Georgia opted to have the federal government run its program, which has begun extending coverage to Georgians.

Most insurance plans also will have to pay for preventive services such as immunizations, mammograms and colonoscopies, without charging consumers deductibles, co-pays or co-insurance fees. Plans in effect on March 23, when the law was enacted, and that do not change significantly are considered “grandfathered” and are exempted from this provision.

This preventive care option is designed to save money over the long haul.

“A lot of employer plans already do that,” said Nancy Metcalf, a senior editor at Consumer Reports Health. “Give the person their blood pressure test and you can see when problems are developing instead of when the person develops a stroke.”

If enrollment materials don’t make it clear, workers should ask their employer’s benefits experts whether their plan is “grandfathered” to determine which provisions of the law will apply. Michael Guyette, Aetna’s regional manager for the Southeast, said most plans will probably incorporate the new provisions. He said he does not expect many employers to choose grandfathering as a way to avoid implementing provisions of the law.

While some elements of the health care law took effect this year, the major changes won’t hit until 2014. That’s when most consumers will be required to get coverage and when “insurance exchanges” will be up and running to direct people without group health plans at work to a variety of coverage options, including free insurance for low-income people through Medicaid and subsidized plans for many middle-income families.

The new requirements prescribed by the health care law won’t come without a price. The law’s provisions will add a bump of 1 percent to 2 percent to the cost of insurance coverage for most large employers, according to Hewitt Associates, a consulting firm that is a respected source on employee benefit costs.

But those costs could vary, with larger increases expected on individual plans that often provide less generous benefits in exchange for a lower price. “The impact on premiums depends on the policy somebody has today,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a Washington-based trade group.

At least one provision of the law — the requirement to extend coverage to children without considering pre-existing conditions — led to less access to coverage. Some of the nation’s largest insurance companies said recently that they would no longer offer new child-only policies, for fear that parents would only sign up their kids for insurance when a child faced major medical bills, knowing that insurers could no longer turn down a child because of a pre-existing condition.

Most of the insurers said they would continue to offer new coverage to children as part of family policies and would not drop child-only policies they already carry. Insurers operating in Georgia that informed the state insurance commissioner’s office of their intent to stop writing the policies include Aetna, Kaiser and Blue Cross Blue Shield of Georgia, according to department spokesman Glenn Allen.

While the new law is affecting policies and costs, other factors will drive up health insurance premiums significantly in the coming year. As in previous years, growing health care costs are the biggest factor in the rising cost of insurance.

Large employers in metro Atlanta can expect to pay 8.7 percent more for health insurance in 2011, the region’s highest increase in six years, according to Hewitt Associates. That increase is in line with the national average of 8.8 percent. The average per-employee insurance cost at large companies will be $9,316 in metro Atlanta next year, Hewitt found, which is slightly below the national average.

The average employee share of the premium for Atlanta is estimated to be $2,163 next year — triple the average employee contribution in 2002. Out-of-pocket costs, such as co-payments and co-insurance, will cost the average Atlanta employee another $1,991, according to the Hewitt projections. Employee contributions and out-of-pocket costs for Atlanta are slightly below the national average.

The rising costs for employees make it all the more important to understand how their plans work and take advantage of opportunities to keep those out-of-pocket costs low.

“One of the best ways to save money is to ensure you are in network,” said Lindberg, of CIGNA.

Consumers can save lots of money when they use hospitals and doctors that have negotiated network rates with insurers. Consumers can also save by shopping around for services such as MRIs, or using a mail-order pharmacy for prescriptions. Consumers should also make sure they’re aware of free benefits offered by many plans, such as 24-hour health advice lines staffed by nurses, discounts on gym memberships or free counseling through an employee assistance program.

Americans now have a wealth of resources to become more savvy health care consumers. The health care law prescribed the creation of the new healthcare.gov website, which allows consumers to shop around for insurance plans or research the new law.

Most insurers also have launched websites to help consumers. Aetna’s Navigator site allows members to price a drug or a hospital procedure. Blue Cross Blue Shield of Georgia has an online tool to allow businesses to determine whether they can benefit from new tax credits or whether they should try to keep their plans grandfathered. CIGNA’s site includes a “Let’s Be Clear” section that translates “insurance speak” and explains the new health care law.

Understanding what is not part of the law is also important, some experts said. Rumors are widespread, for example, that the law contains a provision requiring workers to pay tax on their health insurance next year, said Metcalf, of Consumer Reports.

While some insurance companies may have to pay taxes on so-called “Cadillac plans” in the future, most plans will not meet that threshold. “Somehow this idea got out there,” Metcalf said.

The most important step consumers can take, Lindberg said, is to take advantage of the many sources of information so they can make the right coverage choices for their own family and keep their costs low.

“Understand what the heck is being presented to you,” Lindberg said.

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