Reform will force payers to improve individual benefits

Insurers will have to improve the benefits under individual health plans if they want to remain competitive come 2014 when the reform law's health insurance exchanges become operative.

A new study, which was funded by the Commonwealth Fund and published in Health Affairs, found that 51 percent of currently available individual plans would not qualify for insurance exchanges, reported Bloomberg.

Plans sold through exchanges must provide essential health benefits, including covering on average at least 60 percent of members' health costs. The plans also must limit annual out-of-pocket expenses at $6,050 for individuals and $12,100 for families, according to The Washington Post Wonkblog.

But many individual plans currently exclude pre-existing conditions, and most don't offer maternity coverage, which also is required under the health insurance exchange rule. Therefore, insurers will have to improve their coverage if they want to sell these plans through the exchanges.

"Deductibles will have to be lowered," John Gabel, study lead and senior fellow at the University of Chicago, told Bloomberg. "The out-of-pocket limits may have to be lower. They will have to offer maternity benefits" and mental health and substance abuse treatment coverage.

However, the study didn't address the potential repercussions of improving such benefits, including whether insurers will raise premiums to cover the additional costs.

Sara Collins, a Commonwealth Fund vice president, said the reform law should lower coverage costs by reducing administrative expenses and adding more consumers to the individual market. Those changes, she said, should spread risk and help temper premium costs, reported The New York Times.

Whatever happens, Gabel and his fellow researchers concluded that "the individual market of the future will sharply contrast with the market of past decades."

To learn more:
- read the Commonwealth Fund study
- see the Bloomberg article
- check out the Washington Post Wonkblog post
- read the New York Times article

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