Health Care Reform: What States Can Expect
The debate over the Patient Protection and Affordable Care Act (PPACA) may be over, but the work has just begun. Many of the requirements will be implemented incrementally, between now and 2014 and beyond, but there are some immediate provisions necessitating federal regulations be promulgated fairly quickly. Not only are federal agencies feeling the pinch, but the new law has many implications for the states, which are still trying to gather the facts and ready for their expanded responsibilities. What can the states expect…….
States can expect an expansion to the Medicaid population in 2014 when coverage will be required of all citizens and legal immigrants over 65 who earn up to 133% of federal poverty level, which translates to $14,404 for an individual and $29,327 for a family of four. It has been estimated that 17 million adults or 37% of the nation’s uninsured population, according to the Kaiser Foundation, could gain coverage. What some do not realize is that the states will have some help paying for the added beneficiaries. The federal government will cover 100% of the cost of insuring newly eligible people from 2014-2016; with a declining federal share thereafter: 95% in 2017, 94% in 2018, 93% in 2019 and 90% in 2020 and beyond.
The new law makes changes to the way in which private health insurance plans must be structured and states will be responsible for enforcing the new associated regulations and practices. Examples of the new requirements include individuals up to the age of 26 will be permitted to remain on their parents’ health plans unless they have access to employer-based coverage. The new law also restricts insurance plans from imposing lifetime dollar limits on benefits. When all citizens are required to have health insurance (2014), private health plans will be unable to deny coverage for any reason, including pre-existing conditions. And gender and health status cannot affect rates. States are required to create a consumer assistance office or ombudsman’s program to help individuals navigate the new system. Reporting on trends in insurance premiums will also be required of states.
While Medicaid expansion will reduce the number of uninsured Americans, there will still be people whose income are too high to be eligible for Medicaid and will not have access to employer-sponsored plans. To fill the coverage gap, state-based health exchanges will be created. Essentially, the exchanges will replace the individual and small group health insurance markets. The state exchanges will provide oversight of the health plans with some overlap with state insurance departments, ultimately requiring some clarification of duties between the state and federal branches. Like other aspects of PPACA, there are incremental changes. Initially, state based exchanges will serve small businesses up to 100 employees, while beginning in 2017, states can extend coverage to employers with more than 100 employees. Beginning in 2016, states will have the authority to create interstate health care compacts.
Within 90 days of enactment of PPACA, the federal government will have set up a temporary high-risk pool, an option for individuals with a pre-existing condition who have been uninsured for at least six months. This interim measure will address the gap until the law’s requirement that insurers cover all individuals with pre-existing conditions goes into effect in 2014. However, coverage of children is required in 2010, within six months of passage. The law provides for $5 billion for implementation of the pool until 2014; while after that date, the pools will no longer be necessary.
Specific state responsibilities and the shape of the partnership with the federal government is still evolving. Implementation may appear daunting, but what is clear is we are moving in a direction of improved health for all Americans.
Janet Haebler, MSN, RN
Tags: health care reform, May 2010, Medicaid, Patient Protection and Affordable Care Act, PPACA
