Lawsuits Challenge Health Care Reform Mandate

Lawsuits Challenge Health Care Reform Mandate

Health Care Reform Is Here

Health Care Reform Is Here

Health care reform became law on March 23. There are many questions that have yet to be answered, and IQHSA.com has been hard at work to determine how health care reform will affect you and your business.

 

Many specifics of the different reform provisions remain undefined. Due to how the law was written, there is ambiguity and a need for regulatory agencies to provide clarification. In the months and years ahead, we expect federal agencies to issue regulations and guidance on many aspects of the legislation.

 

Here are seven key health care reform components effective this year:

 

1.     Small Business Tax Credits – Small businesses up to 25 employees could be eligible for tax credits for the coverage they offer employees.

2.     Dependent Coverage – Many health insurance carriers have been early adopters of the law that makes health insurance coverage available to adult children up to age 26. These dependent coverage benefits are now available.

3.     Grandfathering of Existing Policies – This is the "keep the plan you're on" language used during the reform debate. The law provides that grandfathered plans – plans that were in effect at the time the law was signed on March 23, 2010 – do not need to comply with certain reform requirements (although many apply to grandfathered plans as well). Regulations are expected to clarify what changes can be made to plans without jeopardizing grandfathered status.

4.     High Risk Pool – The new law requires that health insurers must offer coverage to anyone regardless of health status, and that goes into effect in 2014. High-risk pools are being developed in the interim to insure those who don't currently qualify for health insurance. While some states already have high-risk pools, Arizona doesn't. Gov. Jan Brewer has already replied to the Department of Health and Human Services that Arizona – which had the option to create its own high-risk pool or defer to a national pool – cannot afford to create one.

5.     Mini Exchange – Now commonly referred to as "The Web portal," this is a first step in the reform legislation that aims to assist consumers by providing private health insurance coverage information (the full exchange will be activated in 2014). Regulations have been issued that define the information insurers and others are required to submit to HHS and many health insurance carriers are compiling the information necessary to meet the May 21, 2010, submission deadline for Phase I.

6.     Reinsurance for Early Retirees – Health care reform legislation provides for the establishment of a temporary reinsurance program to reimburse participating employment based plans for a portion of the cost of providing health insurance coverage to early retirees. Final regulations have recently been issued that provide more details about the program and the application and claims submission processes. 

7.     Medical Loss Ratios – The affect of the federal law aimed at keeping health insurers' administrative costs in check is unclear, in part because federal definitions of how carriers will have to calculate medical loss ratios haven't been determined.

 

We will continue to bring you all the latest on health care reform but in the meantime we invite your comments and questions at IQHSA.com.

Health Care Reform – New State High Risk Pools

Health Care Reform – New State High Risk Pools

States had until April 30, 2010 to notify Washington if they plan to participate in one of the first government programs to be launched under the new health care reform law – high-risk pools for the uninsured. At the deadline the states that declined to administer risk pools are Alabama, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Louisiana, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Virginia and Wyoming, according to The Health and Human Services Department. 16 of the 18 States are run by Republican Governors and 2 by Democratic Governors.

Why did these states opt out of this glorious offering? Because:

1.      Although there is $5 Billion allocated for distribution to the participating states they are being asked to participate in the actual costs associated with the program.

2.      The program is slated to run through 2013 when the new provision requiring health insurance carriers to cover everyone regardless of their condition begin but there is no guarantee this will occur. This leaves the states vulnerable to additional costs and the potential of having to revamp or shut down the program all together.

The new high-risk program is essentially insurance for individuals who have pre-existing conditions and are either uninsurable or expensive to insure. So why would the states choose to opt out? Here are a few reasons:

1.      The new program is only meant to bridge the gap from where we are now to 2014 when health plans will have to accept everyone no matter their condition. States could be liable if the new law is not implemented on time or not at all.

2.      The proposed risk pools charge the same premiums that healthy people pay. Most existing high risk pools currently in place at the state level charge between 125% -200% of market rates to cover the potential risk.

3.      The proposed risk pools will have no waiting period. Existing high risk pools have waiting periods before someone could participate of 3 months or longer to protect against an individual waiting to jump in until they have a serious condition requiring medical care.

4.      The Proposed risk pools will only cover those individuals who have been without any health insurance coverage for longer than 6 months. Those who have been responsible and continuing coverage through COBRA, an existing high risk pool, or their own private health insurance plan are out of luck. The proposed risk pools will only be for those who have either been unable to get coverage or to reward those who have chosen not to pay for their own coverage.

We do not want a system that encourages people to be free-loaders leaving others to pick up the tab. This is why the main function of the pool should be to enable people who have been continuously insured to receive some relief.

I would encourage you to read Ten Small-Scale Reforms For Pre-existing (Chronic) Conditions. By John Goodman to learn a much better alternative to high risk pools for people with preexisting conditions.