Why Do People Care about Healthcare Reform?

Benefits Can Change Year-to-Year

Employers and insurance companies can change plans, services, and benefits year-to-year.

Most Americans with private health insurance secure coverage through an employer-sponsored plan. Others buy individual policies in the insurance market. In either case, coverage is defined in terms of what is covered, under what circumstances, within what limits, for what premium price, etc. These terms, however, are subject to change. Employers may decide to discontinue their health benefits or change their coverage or their insurance company, and this can mean higher health care costs for employees. It can also mean that some services are no longer covered or covered in the same amount or that an employee’s physician is no longer among those payable by the insurance company.

Some employers are limited in how often and how much they can change employees’ health benefit plans, for example, if employees are covered by a union contract or some other employment agreement. Many employers try to give employees adequate notice of benefit changes (often during “open enrollment” periods, when employees choose the benefits they want for the next benefit year), but there is no requirement that they do so.

When an individual buys health insurance on his or her own, insurance companies can change the terms of the policy more or less often, depending on the type of policy bought. All policies have expiration dates. Cancelable policies can be changed or canceled before the expiration date, and optionally renewable policies can be changed or canceled on the expiration date. Most individual policies are guaranteed renewable, which means the policy may not change but the premium price may increase substantially (Couchman, DATE). Changes in the insured person’s or his or her family’s health may cause the insurer to change the terms of the policy.

Public health insurance programs such as Medicare and Medicaid may also change the benefits and benefit amounts they offer, but this requires a regulatory process that is usually slower and more visible than private-sector decision-making. In addition, people may be disenrolled from public programs if their situations change. For example, disabled Medicare beneficiaries may no longer qualify for coverage if their disability resolves, and Medicaid recipients may lose eligibility for the program when their status (for example, age) or income level changes.

Sources

Couchman, Glennis M. Health Insurance: Sources and Understanding Policy Terms. http://agecon.uwyo.edu/RiskMgt/humanrisk/HealthInsurSources&PolicyTerms.pdf.

http://employment-law.freeadvice.com/pensions_benefits/employer_change_insurance.htm

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