What you need to know about the Affordable Care Act and how it affects Californians

Obamacare Benefits: Are You Getting a Good Deal?

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    NEWSLETTERS

    When it comes to the Affordable Care Act, critics say many consumers are getting short-changed by paying for services they will never use. Sam Brock examines the claim in this edition of Reality Check. (Published Monday, Oct 14, 2013)

    If the last few weeks in Congress have proven anything, it’s that feelings about the president’s signature health care law, the Affordable Care Act, run deep.

    Proponents gush about the elements extremely popular with consumers: No more policy denials for preexisting conditions, subsidies for a wide swath of Americans and caps on out-of-pocket expenses.

    Opponents highlight how much the law might cost our debt-riddled nation, the lack of any way to control insurance premiums (other than good old fashioned competition), and inefficiencies in how the care is actually consumed and delivered.

    For the purposes of this story, we’re looking at the claims and facts of just one element of the debate, the Essential Health Benefits package.

    Also known as just ‘EHB,’ it’s a minimum level of benefits that insurance providers are now *required to offer you under the law.

    Is such a requirement a good or bad thing?

    For Lanhee Chen, a fellow at the conservative-leaning Hoover Institution and former policy director for presidential candidate Mitt Romney, the idea of raising the overall quality of benefits sounds much better in theory than it is in practice.

    “My take on it is that people should be allowed to choose what kind of plan they want to have,” Chen said. “And the challenge with the Affordable Care Act ‘Essential Health Benefits’ package is that in some ways it removes people’s choice to be able to pick a plan that may be less comprehensive, but would offer lower premiums per month and would be able to save a little bit more money on the front end.”

    Chen argues that the average consumer is being forced to pay more for coverage that he or she may or may not ever use.

    We wanted to know, like what?

    “I don’t think you should be required to purchase coverage for maternity benefits,” Chen said.

    “Now, that’s something that a lot of plans already had to cover in California before, but now under the ACA all plans will be required to provide coverage for maternity benefits,” he continued. “And so, one questions whether a young man in their thirties or forties should be required to buy that kind of coverage.”

    Is this assertion true?

    It turns out yes, the Affordable Care Act does require coverage for maternity and newborn care. It’s one of 10 essential health benefits, such as outpatient care, hospitalization services, mental health services and prescription drug coverage.

    For details, please watch the video above or check out the federal government’s full list and description of benefits.

    The caveat, however, is that California already required such coverage from insurers operating in this state, as Chen alluded to.

    In fact, California has some of the strictest requirements for health care coverage of any state in the country, courtesy of a decades-old law called the Knox-Keene Act that has been periodically updated since its enactment in 1975.

    So what new benefits are you actually paying more for under the Affordable Care Act in California?

    To probe that question we spoke with Shelley Rouillard, chief deputy director for the state’s Department of Managed Health Care.

    The DMHC oversees compliance for about 90 percent of the insurance plans offered in California and is the definitive source for health care benefit information in this state.

    “There are a few new health benefits that didn’t used to be required but now are required to be covered [under the ACA],” Rouillard said, “such as pediatric dental and vision, acupuncture and a more expanded set of mental health benefits that are available to people.”

    And that is the entire list of new benefits in California:
    -Acupuncture
    -Pediatric dental/vision
    -Therapy for all mental health conditions listed in the Diagnostic and Statistical Manual of Mental Disorders (DSM)

    “Pretty much all of these EHB benefits have been available to people previously in California,” Rouillard said.

    Even in the case of expanded prescription drug coverage, it wasn’t mandated under the Knox-Keene Act “but virtually all health plans and employers offered the coverage” in California, Rouillard added.

    So how much extra are Californians really paying for the EHB benefits of the Affordable Care Act, given the state’s strict rules?
    “If you spread the cost of that benefit over the entire population it’s very small, pennies for an individual to pay but it ensures that everybody, and especially those people who need it, get the services,” Rouillard said.

    She acknowledged that everybody is paying for the full gamut of benefits but may not end up utilizing all of those services.

    “That’s what community rating is really about, it’s spreading the cost of any particular service or benefit across a large population so everybody has access to the same benefits,” Rouillard said.

    Speaking of which, it’s also important to note that the benefits of community rating- a concept that prevents health insurance providers from calculating premiums based on certain risk factors- will likely drive up costs for some consumers.

    For example, insurance companies can no longer reject a patient or hike up that person’s premiums due to a preexisting condition.

    Also in the law, insurance companies can no longer charge older folks (who generally need more health care services) a much larger premium than their younger, healthier counterparts.

    These protections are popular with Americans but also represent additional costs for insurance providers.

    We asked Chen if it’s actually these consumer protections, rather than the Essential Health Benefits package, that threatens to drive up premiums for some people?

    “I think it’s all part of the mix,” he said. “It’s tough to…disaggregate what’s driving the cost increases. Certainly the factors you mentioned are absolutely reasons why the costs are going up.”

    Bottom line, there’s a number of reasons why costs could go up for some people under the Affordable Care Act.

    It does not appear, however, that a better benefit package in California is one of them, since almost all of those benefits were already required by state law.

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