Will health insurance cost more in 2014?

June 26, 2013

The answer is not easy to give. For some people costs may go up, at least in the short-term. For others costs may go down or stay the same.

What is critical to understand is that the Affordable Care Act – Health Care Reform – sets a new minimum benefit standard for every major medical health insurance policy in the country.

Beginning in January 2014, any major medical plan sold must provide coverage for a minimum of 10 essential health benefits, including:

  1. Ambulatory patient services;
  2. Emergency services;
  3. Hospitalization;
  4. Maternity and newborn care;
  5. Mental health and substance abuse
  6. Prescription drugs;
  7. Rehabilitative and habilitative services;
  8. Laboratory services;
  9. Preventive and wellness services and chronic disease management;
  10. And pediatric care.

And, the law requires that all of these benefits must be covered at a minimum of 60% of their actuarial value.

You’re probably wondering, What is actuarial value?

The easiest way to explain it is to say that it is a percentage of total average costs for covered benefits that a plan will cover.

So, a plan with 70% actuarial value would typically cover 70% of the costs and the customer would typically be responsible for 30% of the costs.