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Health Insurance

Insurance regulations: individual policies

All new individual major medical health insurance policies sold to individuals and families faced new requirements.[21] The requirements took effect on January 1, 2014. They include:

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  • Guaranteed issue prohibits insurers from denying coverage to individuals due to preexisting conditions
  • States were required to ensure the availability of insurance for individual children who did not have coverage via their families.
  • A partial community rating allows premiums to vary only by age and location, regardless of preexisting conditions. Premiums for older applicants can be no more than three times those for the youngest.
  • All policies must provide an annual maximum out-of-pocket (MOOP) payment cap for an individual's or family's medical expenses (excluding premiums). After the MOOP payment is reached, all remaining costs must be paid by the insurer.
  • Insurers are required to implement an appeals process for coverage determination and claims on all new plans.
  • Annual and lifetime coverage caps on essential benefits were banned.

Risk adjustment

Risk adjustment involves transferring funds from plans with lower-risk enrollees to plans with higher-risk enrollees. It was intended to encourage insurers to compete based on value and efficiency rather than by attracting healthier enrollees. Of the three risk management programs, only risk adjustment was permanent. Plans with low actuarial risk compensate plans with high actuarial risk.

Medicare savings

Medicare reimbursements were reduced to insurers and drug companies for private Medicare Advantage policies that the Government Accountability Office and Medicare Payment Advisory Commission found to be excessively costly relative to standard Medicare;[93][94] and to hospitals that failed standards of efficiency and care.

Medicare taxes

Income from self-employment and wages of single individuals in excess of $200,000 annually are subjected to an additional tax of 0.9%. The threshold amount is $250,000 for a married couple filing jointly (threshold applies to their total compensation), or $125,000 for a married person filing separately.