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What Is Creditable Health Insurance in Massachusetts?

Given the recent steps by the Obama administration, health care reform is a current concern for every American citizen. Most citizens, including Massachusetts residents, still share concern about whether change will be felt across the board or just limited to certain sectors. A large number of Americans have health-related problems that insurance companies define as pre-existing conditions. Since these companies follow the ideals of capitalism astutely, they tend to only consider their best interests and generally impose a waiting period before putting the insurance in place or charge higher premiums.

  1. Definitions

    • A pre-existing condition, as defined by insurance companies, is a health problem that exists before you apply for a health insurance policy or sign up for a new health plan altogether. According to insurance companies, a pre-existing condition can be as serious as prior heart attacks, high blood pressure, type 2 diabetes or even asthma.

      Creditable coverage implies that the pre-existing condition exclusion is reduced by one month for every month that a person had coverage in a previous plan provided that the gap in coverage between the previous and the new plan is 63 days or less. It excludes liability, dental, vision, specified disease or other supplemental benefits.

    Importance

    • A Certification of Creditable Coverage is a detailed statement of individual coverage. This statement acts as a "receipt" and is automatically given to any covered person by an insurer or a health maintenance organization, when the person loses coverage for any of several reasons including termination of employment, change in employment terms, divorce or death of insured individual.

    Minimum Creditable Coverage

    • The minimum creditable coverage (MCC) is the benchmark of benefits mandatory for adult tax filers to be considered insured and to avoid tax penalties in Massachusetts. It is obligatory for Massachusetts-licensed health insurance companies to put an MCC-compliance notice on their health benefit plans.

    Benefits Required

    • The 2010 "Minimum Creditable Coverage" standards include coverage for a broad range of medical services including doctor visits for preventive care without a deductible; a cap on annual deductibles of $2,000 for an individual and $4,000 for a family for services received in-network; an annual maximum on out-of-pocket spending of no more than $5,000 for an individual and $10,000 for a family for services received in-network for plans with up-front deductibles or co-insurance on core services; no caps on total benefits for a particular illness or for a single year; no policy that covers only fixed dollar amount per day or stay in the hospital with the patient responsible for all other charges; and for policies that have a separate prescription drug deductible, it cannot exceed $250 for an individual or $500 for a family for services received in-network.

    Other Options

    • You meet MCC if you are enrolled in Medicare Part A or B, any Commonwealth Care plan, any Commonwealth Choice plan (including Young Adult Plans), MassHealth (except MassHealth Limited), a Student Health Insurance Plan (SHIP), a tribal or Indian Health Service plan, TRICARE, the U.S. Veterans Administration Health System, Peace Corps, VISTA or AmeriCorps or National Civilian Community Corps coverage.

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