Affordable Care Act: Options for Accessing Health Insurance

Now that the Presidential election is over and President Obama will continue in his position for four more years, the Patient Protection and Affordable Care Act (PPACA) will remain in place and phased/incremental implementation of the PPACA will continue. Unfortunately, some of the major provisions of the PPACA are not well known or understood by consumers and providers, or have been all but ignored by some states that were hoping for election of Governor Romney and repeal of the PPACA.

As was discussed in prior ViewPoint “Health Care Reform” columns, access to affordable insurance will be provided through state Insurance Exchanges. These onestop marketplaces will enable:

Consumers and small businesses to choose a quality, affordable private health insurance plan that fits their health care needs. Exchanges will offer health insurance options that meet consumer-friendly standards; facilitate consumer assistance, shopping for and enrollment in a private health insurance plan; and coordinate eligibility for premium tax credits and other affordability programs that ensure health insurance is affordable for all...the public will have the same kinds of insurance choices as members of Congress. (HealthCare.gov, 2011)

States had the option of designing their own insurance exchanges or collaborating with the federal government on the design of insurance exchanges or going with a federal insurance model to be implemented in the state. Designs were to be submitted in 2012 and approved December 14, 2012. As of November 9, 2012, 14 states have legislation enacted to establish a PPACA Compliant Health Insurance Exchange. Five states have legislation pending or tabled. And 25 states have legislation that failed, was withdrawn, expired, or vetoed. Current actions on the part of each state are outlined on the HealthCare.gov site under Center on Budget and Policy Priorities.

Knowing what your state’s status is with regard to design and implementation of the Affordable Insurance Exchange is essential for ambulatory care nurses. Ambulatory care patients need to know that there are options for them to obtain affordable, high quality, private insurance. The HealthCare.gov site offers Fact Sheets with information on implementation of Exchanges, as well as information about Exchanges and Essential Health Benefits. This site also offers an interactive Frequently Asked Question (FAQ) tool to help consumers find answers to insurance coverage-related questions (https://www.healthcare.gov/law/features/choices/exchanges/index.html).

Other poorly understood provisions of the PPACA are those relating to insurance reform regarding enrollment of persons with pre-existing health conditions. The PPACA insurance reform provisions, when they take effect in 2014, will provide annual and special enrollment periods when health plans must accept all applicants regardless of their health. The provisions also prohibit health plans from using health status when setting premiums for individual or small employers (Section 1201 of the Patient Protection and Affordable Care Act of 2010). Persons who have a health problem or who are at higher than average risk of needing health care are referred to as having a pre-existing condition (Kaiser Family Foundation, 2012). Health insurance plans have been reluctant to enroll such persons, because they know they are more likely to use more and more expensive services than other enrollees. Persons and families with employer-provided health insurance have group insurance and pre-existing conditions are not as great an issue. Persons without employer insurance or government-funded insurance such as Medicare, Medicaid, and Veterans’ Health insurance (to name a few) often buy non-group health insurance.

Persons with pre-existing conditions experience many challenges when searching for such insurance. First of all, companies offering non-group insurance can charge higher premiums to individuals based on their health status. In 2010, the federal government established the Pre-Existing Condition Insurance Program (PCIP) to offer insurance in all states to people with pre-existing conditions who have been uninsured for more than 6 months (Kaiser Family Foundation, 2012). This program has been under-subscribed, most likely due to lack of knowledge of its existence. It will expire at the end of 2013 when the PPACA insurance provisions regarding pre-existing conditions come into effect.

A second major challenge for persons with a pre-existing condition in search of non-group health insurance is benefit exclusion periods. Some group health insurance plans have these also. Benefits for coverage for a pre-existing condition can be denied to new enrollees for a defined period of time. Pre-existing conditions exclusions (PECEs) usually come into play when a claim is filed and the insurance company investigates whether the claim relates to a health condition the enrollee had prior to enrollment. A PECE claim may be denied, but other unrelated health care coverage may continue. The federal government sets standards for PECE provisions in group plans, while state laws regulate non-group plans. The federal standards for group health plans are fairly rigorous and use a restrictive definition of a pre-existing health condition: “exclusions periods cannot be longer than one year, and can apply only to conditions for which a person actually sought medical advice, treatment, or diagnosis during the six-month period immediately preceding enrollment in the plan” (Kaiser Family Foundation, 2012, p. 3). “Standards in some states permit non-group health plans to impose longer exclusion periods, to look much further back in time for evidence of a pre-existing health condition, and to use a more subjective standard in determining whether a preexisting health condition exists” (Kaiser Family Foundation, 2012, p. 3). Another challenge is switching between plans. It is one of the reasons and risks that persons with pre-existing conditions have found to be a deterrent to taking on new employment.

Barriers to non-group health insurance access for persons with pre-existing conditions exist to avoid adverse selection, which is explained below:

When coverage is voluntary and unsubsidized, the people who need it most are the most likely to enroll at any given price, and without screening, a health plan may end up with a pool of enrollees that is sicker and more costly than the average population. This causes premiums to rise and makes coverage unattractive for the majority of potential applicants. Providing broad access to coverage for people with pre-existing health conditions without charging them very high premiums is not realistic without significantly restructuring the market or creating new and heavily subsidized alternative insurance options for them.... The ACA addresses the adverse selection issue by providing significant new tax subsidies to people purchasing non-group coverage and by imposing tax penalties for people who can afford coverage but do not enroll (the latter was called the Individual Mandate and part of the Supreme Court decision in June). These policies together are intended to encourage enough healthy people to enroll to offset any additional costs that might occur from covering people with pre-existing health conditions. (Kaiser Family Foundation, 2012, p. 4)

Knowledge about PPACA-established Insurance Exchanges is essential for ambulatory care nurses, especially those who are working with patients with chronic illnesses. These patients may be currently paying exorbitant premiums for non-group health insurance because they do not know about the PPACA-established PCIP insurance that continues through 2013. Further, these patients need to know that in 2014, health Insurance Exchanges will be available in each state to facilitate affordable choices in private health insurance for all, including those with pre-existing conditions. These Exchanges are designed to assist persons with the sign-up for insurance and determination of eligibility for federal supplemental premium funding. In Massachusetts, where universal health care currently exists, this Web-based sign-up and checking for supplemental funding eligibility takes, on average, about 30 minutes.


References HealthCare.gov. (2011). Affordable Insurance Exchanges: Choices, competition and clout for states. Retrieved from http://www.healthcare.gov/news/factsheets/2011/07/exchanges07112011a.html

Kaiser Family Foundation. (2012). Policy insights: What do they mean when they talk about pre-existing health conditions? Retrieved from http://policyinsights.kff.org/2012/october/pre-existingconditions.aspx

Patient Protection and Affordable Care Act (PPACA). (2010). Section 1201 of the Patient Protection and Affordable Care Act of 2010 (Pub. L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152). Washington, DC: United States Congress.

Sheila A. Haas, PhD, RN, FAAN, is a Professor, Niehoff School of Nursing, Loyola University of Chicago, Chicago, IL. She can be reached at shaas@luc.edu