New Healthcare Reform Policies Under PPACA
We are beginning to see some significant changes in health care delivery and access as a result of the new healthcare reform law, the Patient Protection and Affordable Care Act (PPACA). Some changes are occurring through the federal regulatory process. Many new policies are taking shape within the states. And still others are being adopted voluntarily by private health insurers. We thought you might be interested in seeing the highlights of these recent developments that are designed to improve health care and access for our patients, our families, and our communities.
Ending Rescissions By Health Insurers:
PPACA will prohibit private insurers from rescinding coverage for policyholders when they get sick, effective September 23, 2010. Democratic chairs of three U.S. House of Representatives subcommittees recently wrote to seven of the largest insurance providers, asking them to immediately end the practice and hold an independent review before a policy is rescinded or cancelled. These were Wellpoint, Kaiser Permanente, Assurant Health, UnitedHealth Group, Humana, Blue Cross Blue Shield, and Aetna. Wellpoint, the nation’s largest private health insurer, adopted the new anti-rescission policy on May 1.
Increased Coverage For Adult Dependents:
On May 10, the Departments of Health & Human Services (HHS), Treasury, and Labor issued a joint regulation requiring health insurers to offer extended coverage of dependents until they reach the age of 26. As required under PPACA, this would also apply to dependents – mostly adult children of policy holders – who have previously lost coverage. Certain exceptions apply for “grandfathered plans” where the dependent could get coverage through his or her employer. While insurers are required to follow this policy starting September 23, 2010, many have announced they would adopt it before then. The interim final rule can be viewed here and an instructional fact sheet is available here. In addition, the Internal Revenue Service has adopted a rule that employee contributions to cafeteria plans for children under age 27 are not subject to federal income taxes, effective March 30, 2010.
“High-Risk Pools” For Uninsured With Pre-Existing Conditions:
PPACA called for the creation of temporary “high-risk pools” to offer affordable health insurance to people who can’t get insurance because of a pre-existing condition. The pools will be 100% funded with federal dollars, from July 1, 2010 through the end of 2013. As of early May, 30 states had elected to set up their own program, and 17 chose to have HHS run their program. Rhode Island, Utah, Florida and Arizona were still considering their options. The four most-populous states, California, Texas, Florida, and New York, are likely to benefit the most. More information is available from HHS here.
Coverage For “Early Retirees”:
Starting June 21, 2010, the Department of Health & Human Services will offer $5 billion to help subsidize the costs of health insurance coverage for employees who retire at age 55 and older, but before they qualify for Medicare (and their dependents). This PPACA program ends when the funds run out, or January 2014, the deadline for state health insurance exchanges to be in operation. All types of employers — even state and local governments, unions, and religious organizations — which meet the program criteria may apply. They must have ways to save costs for chronic and high-cost conditions; apply for certification; make records available; estimate their reimbursement amount; and sign a written agreement. More information is available in the HHS interim final rule for the program, published in the Federal Register on May 5, 2010.
Scrutiny Of Insurance Premiums:
HHS Secretary Sebelius is zealously working to prevent private health insurers from adopting significant increases in their premium rates, and has even singled out particular companies. HHS has a new Office of Consumer Information and Insurance Oversight, which she said will “closely monitor the industry, and we will not hesitate to act to prevent exorbitant premium hikes.” Anthem Blue Cross, a California subsidiary of Wellpoint, withdrew a 39 percent rate increase after an outside audit, ordered by a state insurance commissioner, found the increase unjustified. Congressional lawmakers are also scrutinizing premium rates, particularly in light of PPACA’s “medical loss ratio” requirements that a certain percentage of premiums must go toward health care, versus administrative, costs. Regulations implementing those provisions have not been issued yet.
Eileen Shannon Carlson, RN, JD
Tags: adult dependents, early retirees, high-risk pools, May 2010, Patient Protection and Affordable Care Act, PPACA, regulatory process, rescissions
