Archive for the ‘Healthcare Reform’ Category

Health Care Reform Impacts Indiana Maternity Coverage

July 15th, 2010 by admin | No Comments | Filed in Healthcare Reform

Starting in the fall, all new health plans must cover certain preventive screenings and other services for pregnant women at no additional cost to the patient. Those include folic acid supplements, which reduce the risk of neural tube defects in developing fetuses, and counseling to help pregnant women stop smoking. Medicaid will also begin to cover smoking cessation counseling and drug therapy for pregnant women.

This will have an impact on what we pay in health premium. Its great that there will be additional coverages for pregnancy that is currently excluded from most private individual health plans today. The Health Care Reform is making it mandatory that everyone has this coverage and that it does not add any additional cost to the insured for treatment. This is another aspect of Health Care Reform that has pro and cons. The positive is additional coverage that will not have additional cost for treatment. The negative is the premium will have to go up. The other negative is you will not have choices to opt out of that coverage if you don’t need it. If you are not planning on having any more children it would be nice to have the choice to opt out of that coverage and pay less in premium.

Tags: , ,

U.S. Government Posts Dependent Health Care Regulations

May 25th, 2010 by admin | 1 Comment | Filed in Healthcare Reform

Federal agencies are rushing young adult dependent coverage interim final rules into effect without going through the usual comment period.

The Employee Benefits Security Administration, an arm of the U.S. Department of Labor, has posted a preliminary version of the interim final rules on its website.

The Internal Revenue Service, an arm of the U.S. Treasury Department, and the Office of Consumer Information and Insurance Oversight at the U.S. Department of Health and Human Services also worked on the rules.

The agencies are set to publish the final version of the interim rules in the Federal Register Thursday.

The rules implement a provision in the new federal Affordable Care Act — the legislative package that includes the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act — that requires insurers to let insured parents keep children on the parents’ health coverage until the children are 26.

The ACA young adult coverage provision is set to take effect Sept. 23, but most major carriers say they will implement the provision earlier.

Federal agencies normally provide time for members of the public to comment before implementing major regulations. The agencies are implementing the young adult coverage interim rules before the comments come in because the secretary of Labor, HHS and the Treasury “have determined that it would be impracticable and contrary to the public interest to delay putting the provisions in these interim final regulations in place,” officials write in a preamble to the interim rules. “Having a binding rule in effect is critical to ensuring that individuals entitled to the new protections being implemented have these protections uniformly applied.”

Officials are estimating that, in 2011, the program will lead to about 1.2 million young adults having new health coverage, and that about 650,000 of those young adults will be people who were previously uninsured.

The number of uninsured young adults who gain coverage through the program in 2011 could range from 200,000 to about 1.6 million, officials estimate.

Although officials use the term “dependent” in connection with the regulation, group health plans can no longer use factors such as whether a child of an insured is a tax dependent in deciding whether to issue coverage to that child, officials write.

“Examples of factors that cannot be used for defining dependent for purposes of eligibility (or continued eligibility) include financial dependency on the participant or primary subscriber (or any other person), residency with the participant or primary subscriber (or any other person), student status, employment, eligibility for other coverage, or any combination of these,” officials write.

Implementing the young adult coverage program will require that the children who were denied coverage, or whose coverage ended, receive alerts about the new enrollment opportunity, officials write.

Federal agencies want to hear ideas about ways to minimize the burden on the notice senders and on the individuals who must fill out the notices, officials write.

Tags: , ,

Health Care Reform – Frequently Asked Questions

April 13th, 2010 by admin | No Comments | Filed in Healthcare Reform

The new health reform law is the most far-reaching health legislation since the creation of the Medicare and Medicaid programs.

The following is a look at the impact of the law, which will extend insurance coverage to 32 million additional Americans by 2019, but which will also have an effect on almost every citizen.

Here are some commonly-asked questions about how you might be affected:

Q: I don’t have health insurance. Will I have to get it, and what happens if I don’t?

A: Under the legislation, most Americans will have to have insurance by 2014 or pay a penalty. The penalty would start at $95, or up to 1 percent of income, whichever is greater, and rise to $695, or 2.5 percent of income, by 2016. This is the individual limit; families have a limit of $2,085 or 2.5 percent of household income, whichever is greater. Some people can be exempted from the insurance requirement, called an individual mandate, because of financial hardship or religious beliefs or if they are American Indians, for example.

Q: I already have insurance through my job. Is this plan going to cost me more?

No, if you have coverage you already like and you see providers you like, nothing should change for you. Premium prices should not change, and in fact, there are subsidies for people who struggle to pay their premiums in Massachusetts that will be increased under federal reform.

Your existing health premiums, your doctor and your hospital will not be affected by this law. But that said, if your employer decides to go with a different insurer or HMO, or decides to offer a more restricted network at a lower premium or a wider network at a higher premium, you might be forced to change doctors or hospitals.

Q: I’m a small business owner; Do I now have to buy insurance for all my employees like they require in Massachusetts- what’s the difference between the state plan and the federal plan?

There’s really good news for small business owners. We know they struggle to pay for health care coverage for their employees and we know they want to be able provide health insurance for their employees. Under the federal bill, if you’re a small employer with 50 or fewer employees, you will qualify for a 35% tax credit on the money that you spend to pay for people’s health benefits.

If you’re a business in Massachusetts with 11 or more workers and you don’t provide health insurance, you have to pay an assessment of little under $300 a year or $25 dollars a month… The federal plan applies to employers with 50 or more workers, but the financial pressures are stronger.

Q: I want health insurance, but I can’t afford it. What do I do?

A: Depending on your income, you might be eligible for Medicaid, the state-federal program for the poor and disabled, which will be expanded sharply beginning in 2014. Low-income adults, including those without children, will be eligible, as long as their incomes didn’t exceed 133 percent of the federal poverty level, or $14,404 for individuals and $29,326 for a family of four, according to current poverty guidelines.

Q: What if I make too much for Medicaid but still can’t afford coverage?

A: You might be eligible for government subsidies to help you pay for private insurance that would be sold in the new state-based insurance marketplaces, called exchanges, slated to begin operation in 2014.

Premium subsidies will be available for individuals and families with incomes between 133 percent and 400 percent of the poverty level, or $14,404 to $43,320 for individuals and $29,326 to $88,200 for a family of four.

The subsidies will be on a sliding scale. For example, a family of four earning 150 percent of the poverty level, or $33,075 a year, will have to pay 4 percent of its income, or $1,323, on premiums. A family with income of 400 percent of the poverty level will have to pay 9.5 percent, or $8,379.

In addition, if your income is below 400 percent of the poverty level, your out-of-pocket health expenses will be limited.

Q: How will the legislation affect the kind of insurance I can buy? Will it make it easier for me to get coverage, even if I have health problems?

A: If you have a medical condition, the law will make it easier for you to get coverage; insurers will be barred from rejecting applicants based on health status once the exchanges are operating in 2014.

In the meantime, the law will create a temporary high-risk insurance pool for people with medical problems who have been rejected by insurers and have been uninsured at least six months. This will occur this year.

Starting later this year, insurers can no longer exclude coverage for specific medical problems for children with pre-existing conditions nor deny coverage to children with pre-existing illnesses.

Insurers later this year will also be barred from setting lifetime coverage limits for adults and kids. In 2014, annual limits on coverage will be banned.

New policies sold on the exchanges will be required to cover a range of benefits, including hospitalizations, doctor visits, prescription drugs, maternity care and certain preventive tests.

Q: How will the legislation affect young adults?

A: If you’re an adult younger than 26, you’ll be able to stay on your parent’s insurance coverage as long as you are not offered health coverage at work. This provision officially takes effect in September, but insurers may not have to comply until the beginning of a new health plan year – which often happens in January.

In addition, people in their 20s will be given the option starting in 2014 of buying a “catastrophic” plan that will have lower premiums. The coverage will largely only kick in after the individual has $6,000 in out-of-pocket expenses

Q: I own a small business. Will I have to buy insurance for my workers? What help can I get?

A: It depends on the size of your firm. Companies with fewer than 50 workers won’t face any penalties if they don’t didn’t offer insurance.

Companies can get tax credits to help buy insurance if they have 25 or fewer employees and a workforce with an average wage of up to $50,000. Tax credits of up to 35 percent of the cost of premiums will be available this year and will reach 50 percent in 2014. The full credits are for the smallest firms with low-wage workers; the subsidies shrink as companies’ workforces and average wages rise.

Firms with more than 50 employees that do not offer coverage will have to pay a fee of up to $2,000 per full-time employee if any of their workers get government-subsidized insurance coverage in the exchanges. The first 30 workers will be excluded from the assessment.

Q: I’m over 65. How will the legislation affect seniors?

A: The Medicare prescription-drug benefit will be improved substantially. This year, seniors who enter the Part D coverage gap, known as the “doughnut hole,” will get $250 to help pay for their medications.

Beyond that, drug company discounts on brand-name drugs and federal subsidies and discounts for all drugs will gradually reduce the gap, eliminating it by 2020. That means that seniors, who now pay 100 percent of their drug costs once they hit the doughnut hole, will pay 25 percent. Beginning in 2011, drug companies will be required to give a 50 percent discount on brand-name drugs for prescriptions filled in the doughnut hole.

And, as under current law, once seniors spend a certain amount on medications, they will get “catastrophic” coverage and pay only 5 percent of the cost of their medications.

Meanwhile, government payments to Medicare Advantage, the private-plan part of Medicare, will be frozen starting in 2011, and cut in the following years. If you’re one of the 10 million enrollees, you could lose extra benefits that many of the plans offer, such as free eyeglasses, hearing aids and gym memberships. To cushion the blow to beneficiaries, the cuts to health plans in high-cost areas of the country such as New York City and South Florida — where seniors have enjoyed the richest benefits — will be phased in over as many as seven years.

Beginning this year, the law will make all Medicare preventive services, such as screenings for colon, prostate and breast cancer, free to beneficiaries.

Q: How much is all this going to cost? Will it increase my taxes?

A: The package is estimated to cost $938 billion over a decade. But because of higher taxes and fees and billions of dollars in Medicare payment cuts to providers, the package will narrow the federal budget deficit by $143 billion over 10 years, according to the Congressional Budget Office.

If you have a high income, you will face higher taxes. Starting in 2013, individuals with earnings over $200,000 and married couples earning more than $250,000 will pay a Medicare payroll tax of 2.35 percent, up from the current 1.45 percent. In addition, high-income taxpayers will face a 3.8 percent tax on unearned income such as dividends and interest over the threshold.

Starting in 2018, the law will also impose a 40 percent excise tax on the portion of most employer-sponsored health coverage (excluding dental and vision) that exceeds $10,200 a year for individuals and $27,500 for families. The tax is often referred to as a “Cadillac” tax.

The law also will raise the threshold for deducting unreimbursed medical expenses from 7.5 percent of adjusted gross income to 10 percent.

The law also will limit the amount of money you can put in a flexible spending account to pay medical expenses to $2,500 starting in 2013. Those using an indoor tanning salon will pay a 10 percent tax starting this year.

Q: Under the new law, do pre‐existing conditions no longer matter?

Effective September 23, 2010, insurance companies cannot limit coverage for children on individual or group policies with pre‐existing medical conditions. For adults with individual policies, this provision goes into effect in 2014.

Q: Are there annual or lifetime maximums on coverage under the new law?

Effective September 23, 2010, there are no lifetime maximum limits on coverage. In addition, there will be no annual limits on group plans. For individual plans, annual limits may be allowed based on what Health and Human Services deems reasonable. This information is not yet available.

Q:Under health care reform, what happens to rescission?

Effective September 23, 2010, rescissions will occur only in cases of customer fraud or intentional misrepresentation.

Q: Is it true that anyone who applies for coverage will be issued coverage?

Under the Guarantee Issue provision, effective in 2014, anyone who applies for coverage must be issued coverage.

Q: What will happen to my premiums?

A: That’s hard to predict and the subject of much debate. People who are sick might face lower premiums than otherwise because insurers won’t be permitted to charge sick people more; healthier people might pay more. Older people could still be charged more than younger people, but no more than three times as much.

The bigger question is what happens to rising medical costs, which drive up premiums. Even proponents acknowledge that efforts in the legislation to control health costs, such as a new board to oversee Medicare spending, won’t have much of an effect for several years.

Q: I have children in my 20s who can’t afford their own insurance. Does this new plan help them?

The national bill will extend health care benefits to young people up to the age of 26. We know that will bring peace of mind for both parents and young people who have not yet landed in the job market and been able to get their own health benefits.

The federal law has a provision similar to the one in Massachusetts. If a family has children under age 26, they can be covered under the family policy and this is an enormous benefit.

Q: What is the “Insurance Exchange”?

The insurance exchange will work in other states a little like the Massachusetts Insurance Connector works. They certify different insurance policies that can be purchased by small employers or individuals. The idea is each of the four different levels of insurance coverage would have different premiums but standard benefits.

The Insurance Exchange is built on some of the work we’ve already done here in Massachusetts. We have the Health Connector Authority which allows individuals and small businesses to go and competitively shop for their health insurance coverage. Exchanges will be available around the country.

Q: If I lose my job, can I keep my same insurance?

You can. There actually is a provision that will allow some assistance for maintaining your COBRA benefits. In Massachusetts, if you are somebody who has lost their job but wants to continue with the same insurance you have, you’ll receive a subsidy to help you pay for that COBRA coverage.

Q: Will it impact our taxes?

The Congressional Budget Office says the federal deficit drops by over $100 billion over the coming decade. For a small percentage of people who are highly compensated who make more than $200,000 a year, their Medicare taxes will go up less than one percent. For the rest of us, it will be the same.

Obama Asks For Federal Health Rate Approval Authority

February 22nd, 2010 by admin | No Comments | Filed in Healthcare Reform

President Obama has unveiled a health bill proposal that could give federal regulators the authority to regulate health insurance rates.

The rate regulation provision is part of a proposal that the Obama administration has drafted in an effort to “bridge the gap” between the House and Senate health bills. A copy of the proposal is available here.

“A new Health Insurance Rate Authority will be created to provide needed oversight at the federal level and help States determine how rate review will be enforced and monitor insurance market behavior,” Obama administration officials write in a proposal summary.

If a proposed rate increase were unreasonable and unjustified, the government could make a health insurer lower premiums, provide rebates, or take other actions to make premiums affordable, officials write.

In addition to the federal rate regulation provision, the administration proposal includes commercial health coverage provisions that would:

  • Require that individuals have health insurance or pay a penalty.
  • Create a system of health insurance distribution exchanges. (An administration official who requested anonymity says the proposal exchange provisions are similar to the exchange provisions in the Senate health bill, H.R. 3950.)
  • Keep the proposed “Cadillac tax” on insurers that sell high-cost health plans, but shift the effective date to 2018, from 2013, to provide more time for high-cost plans to become more efficient. The initial amount of premiums would be exempt from the tax would increase to $10,200, from $8,500 for individuals, and to $27,500, from $23,000, for families. The initial amounts would be indexed after the first year at a rate equal to the general inflation rate plus 1 percentage point.
  • Provide $40 billion in small business health coverage tax credits.
  • Make employers with 50 or more employees responsible for helping to pay for employees’ health coverage. The Obama administration draft would not impose a direct coverage mandate on affected employers, but it would require them to help defray the cost if employees were getting subsidized health coverage through a public program. “Consistent with the Senate bill, small businesses with fewer than 50 workers would be exempt from any employer responsibility policies,” officials write.
  • Let people who like their current coverage keep it — but impose new restrictions on the “grandfathered plans.” Starting within months after the provision took effect, the grandfathered plans would have to cover adult dependents up to age 26, stop pushing for rescissions, adopt a strong appeals process, and undergo annual state rate reviews. Once the exchanges started up in 2014, grandfathered plans would have to eliminate annual and lifetime coverage limits, pre-existing condition exclusions, and efforts to discriminate in favor of highly compensated individuals. Starting in 2018, the grandfathered plans would have to cover “proven preventive services” with no cost sharing.

Obama administration proposal provisions that would affect the Medicare market and other senior products markets would:

  • Enact a version of the Community Living Assistance Services and Supports Act. The CLASS Act provision would create a worker-funded long term care benefits program. Many critics in the insurance industry, and the chief actuary at the Centers for Medicare and Medicaid Services, have argued that earlier versions of the CLASS Act, including one in the Senate health bill, would create an unsustainable program. Administration officials say the new version of the act includes changes that will improve the proposed program’s financial stability.
  • Close the Medicare Part D prescription drug program “donut hole.” (The donut hole is the coverage gap that starts where Part D coverage for routine prescription expenses ends and catastrophic coverage begins. Today, routine Part D coverage ends after a beneficiary spends $2,830 on covered drugs, and catastrophic coverage kicks in when the beneficiary spends $4,550 on covered drugs.)
  • Keep many of the Medicare Advantage program cost-cutting provisions from the House and Senate health bills. The Obama administration would create a set of benchmark payments at different percentages of the current average fee-for-service costs in an area. The proposal “phases these benchmarks in gradually in order to avoid disruption to beneficiaries, taking into account the relative payments to fee-for-service costs in an area,” officials write in the proposal summary.

    The new payment system would provide bonuses for quality and enrollee satisfaction, and it would punish plans that are unable to justify unusually rapid increases in provider payments.

Revenue provisions in the proposal would:

  • Place a 2.9% assessment on income from interest, dividends, annuities, royalties and rents for individuals earning more than $200,000 or families making more than $250,000.
  • Apply the proposed 2.9% assessment to capital gains. That would push the rate to 22.9% in 2011, up from 15% currently and 20% scheduled to take effect next year
  • .

  • Increase the Medicare payroll tax on the highest earners. This increase is also part of the Senate health bill.


The America’s Health Insurance Plans, Washington, is defending the need for health insurance rate increases, especially in the individual market and the small group market.

“Premiums are increasing because of soaring medical costs and a weak economy that is causing younger and healthier people to drop their health insurance,” AHIP spokesman Robert Zirkelbach says.

“In every state, health plans must provide data showing that requested premium increases are necessary to meet the expected rise in health care costs,” Zirkelbach says. “Creating a new duplicative layer of federal premium regulation on top of what states are already doing is unnecessary and will only add regulatory complexity and increase health care costs.”

Tags: , , , ,