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Health reform bill, part 2

Wednesday, May 26, 2010

The Patient and Affordable Care Act has been signed into law. This became the law even though, according to polls, most citizens opposed it and even with most of those in congress not reading the bill and knowing what it contained. The battle has been won by those in favor of the law, but most likely the war will go on for years.

The insurance companies are digging into it and determining how they can cooperate and implement the new laws. From insurance companies and from other sources, I have been able to obtain some of the information about how it will affect the citizens in this area. There is no way that the complete bill will be covered since it is well over 2,000 pages. Because of using different sources, I may repeat a feature more than once.

Most likely, many of the items in the bill will never be implemented, or they will be changed. In addition to what is in the bill, it is yet to be determined what interpretations the executive branch will develop and the rules that will be developed.

There will be many changes in the individual insurance market in the months and years ahead. Some of these changes will occur this year and many others will not take effect until future years. Upon its enactment on March 23, "grandfather status" was given to existing individual insurance plans in effect at that time. The law permits an individual to keep their existing coverage.

There is a Medical Loss Ratio reporting that became effective on the date of enactment and applies to the 2010 plan year. The health insurers are to report the MLRs to the HHS secretary for each plan year. This is to be posted on the Internet.

A premium review process also became effective when the bill was enacted this year The bill requires the HHS Secretary to establish a process for the annual review of changes in the individual market premiums. The bill requires plans to justify any increase and to disclose the premiums on the plan's Web site.

The question that comes to mind is what role will the state Department of Insurance have?

In Missouri at the present time there is a high risk insurance plan available for those who have been turned down for insurance by two companies. It does have certain limitations and has high premiums. Still, the guaranteed insurance pool is available in Missouri. Perhaps such insurance is not available in every state.

Effective 90 days after enactment of the health reform bill, which is June 22, 2010, is a temporary high risk health insurance pool. The HHS Secretary is required to establish a high-risk program pool through Jan. 1, 2014. This pool will be open to individuals with pre-existing conditions who have been uninsured for at least six months. This pool will be operated at a state level or by nonprofit entities. It has a limit on the premiums based on a specific age band. Out-of-pocket expense at health saving accounts limits will be capped at $5,950 for individuals or $11,900 for a family in 2010.

By July of this year, you will be able to go to a federal Internet Web site to identify affordable health insurance coverage in the state. This will be for residents of each state. A federal Web site will be established for consumers.

Beginning on Sept. 23, 2010, there will not be any pre-existing coverage for children under 19. A HHS Secretary clarification is that it applies to a child's access to a plan and benefits after enrollment.

There has been a great amount of discussion on dependent coverage to age 26. This becomes effective on or after September 23, 2010. This will be a great benefit for many who are in college, or for some other reason is remaining a dependent.

Also effective on Sept. 23, the bill prohibits insurers from establishing lifetime limits or annual limits on the dollar value of benefits. As defined by the HHS Secretary annual limits will be allowed on essential health benefits.

Once the enrollee is covered the health insurance cannot be rescinded except for an intentional misrepresentation of material fact.

Another requirement starting in September is an implementation of an appeals process for appeals of coverage determination and claims. The appeals process requires including an internal claim process, providing notice to enrollees in a culturally and linguistically appropriate manner and informing enrollee of any applicable consumer assistance and allowing the enrollee to review their file.

Coverage of preventive health services is included beginning Sept. 23, 2010. At $0 co-pay there will be recommended immunizations, preventive care for infants, children, and adolescents and additional preventive care and screenings for women.

Grandfathered plan rules that will take effect beginning in September include: requiring dependent coverage to age 26, prohibiting rescissions, prohibiting lifetime limits and eliminates periods for coverage over 90 days.

This will give you some idea of things that will be done as a result of health reform this year. It will be interesting to observe these rules going into effect.

Leonard Ernsbarger
Leonard At Large