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.

Health Care Reform – History Of Fiscal Folly

Health Care Reform – History Of Fiscal Folly

Facts About Healthcare Reform Bill

Facts About Healthcare Reform Bill

Part VI

Health insurance plan changes that impact individuals and employers (both fully insured and self-funded plans unless otherwise noted) over the next few years:

High-Level Overview Health Reform Law: Key Provisions for Large Employers IN 2011:

• Medical loss ratio (MLR). An insurer must publicly report on its MLR and spend at least 85 percent of large group health insurance premiums on medical services or provide rebate payments to enrollees.

• Spending accounts. Health savings accounts (HSAs) and flexible spending accounts (FSAs) may no longer be used to purchase over-the-counter drugs unless prescribed by a doctor. increases tax for nonqualified HSA withdrawals from 10 percent to 20 percent, and for Archer MSA withdrawals from 15 percent to 20 percent.

• HHS studies. HHS is required to study the group health insurance plan markets to compare employer characteristics and determine whether the new health insurance market reforms are likely to cause adverse selection in the large group market or to encourage small and midsize employers to self-insure. HHS and the Department of Labor must also collect information on self-funded health insurance plans. These studies could lead to additional employer reporting requirements.

• Uniform explanation of coverage. Within 12 months of the law's enactment, HHS, in consultation with the National Association of Insurance Commissioners, will develop uniform standards and definitions for summaries of benefits and coverage explanations. Within 24 months of enactment, group health insurance plans must provide enrollees and applicants with coverage documents that meet these standards. Additionally, enrollees must be notifi ed 60 days in advance of any material modification to coverage that wasn't included in the most recent summary.

IN 2012:

• Comparative effectiveness fee. A new fee is imposed on group health insurance plans to fund comparative effectiveness research ($1 per participant through 2013; $2 through 2019).

• Release of Medicare claims data. The private sector may purchase standardized data extracts of Medicare Parts A, B and D claims data to combine with their own claims data to evaluate provider performance measures on quality, efficiency, and the effectiveness of care.

IN 2013:

• FSA contributions. Contributions to flexible spending accounts are limited to $2,500 a year.

IN 2014:

• Pre-existing conditions. Group health insurance plans can no longer impose pre-existing conditions exclusions for any person of any age.

• Annual limits. Annual limits on essential health benefits are prohibited.
• Guaranteed issue. Health insurance companies must accept every employer who applies for health insurance coverage.
• Clinical trials. Coverage of routine patient care costs is mandated for participation in approved clinical trials (does not apply to grandfathered plans).

• Exchanges. State health insurance exchanges are up and running for small businesses and individuals. States can allow large employers to participate beginning in 2017. (Note: the federal definition of a large employer is an employer with 101 or more employees. States can modify the definition to 51 or more employees until January 1, 2016).

• Cost-sharing limits. Cost sharing imposed under group health insurance plans is limited to current health savings account amounts (does not apply to grandfathered plans).

• Waiting periods. Waiting periods cannot exceed 90 days.
• Wellness. Expands health insurance plan wellness incentives up to 30 percent of total coverage costs (up to 50 percent with HHS approval).

• Essential benefits. Essential benefit plan is created, which mandates the level of benefits that must be included in health insurance plans offered in the exchange, as well as in the individual and small group health insurance markets outside the exchange. (Self-funded health insurance plans and grandfathered plans are exempt from this requirement).

• Reinsurance. A temporary reinsurance program will be established for the individual market and funded by individual and group health insurance plan assessments ($25 billion in 2014-2016).

IN 2018:

• Taxes. A new excise tax goes into effect for high-value, "Cadillac" health insurance plans: 40 percent for amounts over $10,200 for individuals and $27,500 for family plans, paid by health insurance companies and plan administrators.

Not to be used for implementation purposes IMPORTANT: This document is designed to provide a general overview of the new health reform law. It does NOT attempt to cover all of the law's provisions and should NOT be used as the legal advice for implementation activities. We encourage you to seek any professional advice, including legal counsel, regarding how the new requirements will affect your specific plan.

This summary provided by Humana One Health Insurance and Humana Small Business Health Insurance.

Health Care Reform Bill Facts

Health Care Reform Bill Facts

Part V

Health insurance plan changes that impact individuals and employers (both fully insured and self-funded plans unless otherwise noted) over the next few years:

High-Level Overview Health Reform Law: Key Provisions for Large Employers Group health plan changes

Under the new law, employers/employees have the right to keep the coverage they had as of March 23, 2010 and are exempt from many reforms. These group health plans are considered “grandfathered plans.” Collectively bargained plans that were ratifi ed before the date of

enactment are grandfathered until the date that the last collective bargaining agreement related to coverage ends.

Changes that impact large employers (both fully insured and self-funded health insurance plans unless otherwise noted) over the next few years:

IMMEDIATELY:

• Federal rate review. The Department of Health and Human Services (HHS) will establish a process for federal review of fully insured health insurance premium rate increases.

IN 90 DAYS:

• Reinsurance for early retirees. A temporary reinsurance program will be established for employers providing health insurance coverage to early retirees over age 55 who are not eligible for Medicare. The federal government will provide $5 billion to fund the program. Participating employers or insurers will be reimbursed 80 percent of retiree claims between $15,000 and $90,000.

The program will be effective through 2013.

IN SIX MONTHS:

For new health insurance plans or plans renewed six months after the law’s enactment date (includes “grandfathered plans”):

• Lifetime and annual limits. Health Insurance Plans may not impose lifetime limits on the dollar value of essential benefits. Annual limits will be restricted (to be determined by HHS).
• Rescissions. No rescissions are permitted, except in cases of fraud or intentional misrepresentation.
• Coverage for adult children. Children may stay on their parents’ health insurance policies until age 26 if coverage isn’t available through their work, regardless of their marital status. Any employer contribution toward the premium is a tax deductible business expense for the employer and not taxable income for the member.
• Pre-existing conditions. Health Insurance Plans may no longer impose pre-existing conditions exclusions for children under 19.

For new health insurance plans or plans renewed six months after the law’s enactment date (does not include “grandfathered plans”):

• Preventive services. New health insurance policies must cover the full cost of preventive care as recommended by the U.S. Preventive Services Task Force, recommended immunizations, preventive care for infants, children and adolescents, and additional preventive care for women.
• Appeals. New minimum requirements for internal and external health insurance claim appeals processes.
• Patient protections. Health Insurance Plans that require or provide for a primary care provider (PCP) designation must allow each member to designate any in-network PCP, or pediatrician for children, accepting new patients. Plans may no longer require an authorization or referral to an Ob-Gyn. Prior authorization or increased cost-sharing for emergency services is also prohibited.
• Nondiscrimination rules. Nondiscrimination rules that apply to self-funded health insurance plans are expanded to fully insured health insurance plans. Plans cannot base an employee’s eligibility or continued eligibility on hourly or annual salary.

Not to be used for implementation purposes

IMPORTANT: This document is designed to provide a general overview of the new health reform law. It does NOT attempt to cover all of the law’s provisions and should NOT be used as the legal advice for implementation activities. We encourage you to seek any professional advice, including legal counsel, regarding how the new requirements will affect your specific plan.

This summary provided by Humana One Health Insurance and Humana Small Business Health Insurance.

Summary Health Care Reform

Summary Health Care Reform

Part IV.

Health insurance plan changes that impact individuals and employers (both fully insured and self-funded plans unless otherwise noted) over the next few years:

High-Level Overview Health Reform Law: Key Provisions for Large Employers

Overview

The health reform package is made up of two parts: a bill that passed the Senate on Christmas Eve, passed the House on March 21, and was signed into law by the President on March 23, and a second piece of legislation: the House’s reconciliation bill, which makes changes to the original

law, passed both chambers on March 25, and was signed by the President on March 30. Many of the provisions in the law will not take effect for several years. At the earliest, provisions that affect employer-sponsored health plans will take effect six months from the date of enactment – in late September. Even then, those early provisions will not affect plans until they renew for the next plan year.

The health reform law has thousands of pages and hundreds of provisions. So it’s important to remember that before many of those provisions are put in place, additional laws and regulations will need to be developed. That could be a lengthy process. Here are some highlights of the major provisions.

Individual responsibility

Starting in 2014, everyone must have health insurance coverage or pay a penalty, which will be enforced by the Internal Revenue Service. The penalties will be phased in over time:

• In 2014, an individual without a health insurance plan must pay whichever amount is greater: $95 or 1 percent of income.
• For 2016 and beyond, that penalty rises to $695 or 2.5 percent of income, whichever is greater (the $695 is indexed from 2016 on).
• Families will pay half the penalty for children, with a cap of $2,085 per family.
• There will be exemptions to this requirement, such as in cases of fi nancial hardship and other limited circumstances. Subsidies to buy private health insurance in new state exchanges will be available in the form of tax credits and cost-sharing assistance for people above Medicaid eligibility but below 400 percent of the federal poverty level. Medicaid eligibility will be increased to 133 percent of the federal poverty level.

Changes that affect your business and the employees who depend on you.

Employer responsibility

New employer group health insurance penalties and obligations

Starting in 2014, employers don’t have to offer their employees health insurance coverage, but most of them with more than 50 employees will pay an assessment if they don’t, or if they offer health insurance coverage that isn’t affordable. Full-time and part-time employees are included when determining whether an employer has 50 employees (based on current full-time employee equivalency rules).

• Employers with 50 or more employees that do not offer “minimum essential health insurance coverage” will pay $2,000 for each employee over the fi rst 30 employees if one of their employees gets a tax subsidy to buy health insurance under an exchange.
• Employers with 50 or more employees that do offer minimum essential health insurance coverage but have at least one full-time employee receiving subsidized coverage under an exchange will pay whichever is less: $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee. Employers must provide “free choice” vouchers to employees with incomes below 400 percent of the federal poverty level if the employee’s contribution to health insurance coverage is between 8 percent and 9.8 percent of income and the employee chooses to purchase coverage in the exchange. No penalties will be imposed on employers with respect to employees who receive these vouchers. Employers with more than 200 employees that offer health insurance coverage must automatically enroll new full-time employees in health insurance coverage. Employees may opt out.

Not to be used for implementation purposes

IMPORTANT: This document is designed to provide a general overview of the new health reform law. It does NOT attempt to cover all of the law’s provisions and should NOT be used as the legal advice for implementation activities. We encourage you to seek any professional advice, including legal counsel, regarding how the new requirements will affect your specific plan.

This summary provided by Humana One Health Insurance and Humana Small Business Health Insurance.