The scope of Reform legislation is far reaching, and the schedule ranges from immediate implementation to regulations that won’t be enacted until 2014 …. and beyond. So what reforms have already been implemented, and what is the schedule for this year?
Among the provisions of the new legislation that became effective immediately after its passage are:
- Review of “unreasonable rates”
- Grandfathered plans
- Early-retiree reinsurance
- Review of “unreasonable rates.”
- Pre-existing Condition Insurance Pools
Review of “unreasonable rates”
The Act required the Health & Human Services (HHS) secretary to establish a process for the annual review of “unreasonable premium increases” in the group and individual markets. A final rule was published on May 23, 2011.
A “grandfathered” plan is a group or individual health plan in which a person was enrolled on March 23, 2010. Grandfathered plans are exempt from some of the health insurance reforms. Generally, grandfathered health plans will be able to make routine changes to their policies and still maintain their status. These routine changes include making cost adjustments to keep pace with medical inflation. The legislation also establishes a number of “transition” programs. Among these are:
- Early-retiree reinsurance. A temporary reinsurance program will reimburse employers for a portion of the cost of certain health benefits to retirees. Reinsurance amounts apply only to a percentage of certain claims between $15,000 and $90,000 for individuals between ages 55 and 64 who are enrolled in an early-retiree benefit program, are not active workers and are not Medicare eligible – along with their covered spouses and dependents. The program ends either on the date federal funding for the program is exhausted or on January 1, 2014, whichever is earlier.
- Pre-existing Condition Insurance Pools. States (or HHS if the state declines to do so) must administer a pool for high-risk individuals until 2014. Individuals are eligible for high-risk pool coverage if they have pre-existing conditions and have not had creditable coverage for six months prior to applying for coverage with the pool.
Among the provisions that have been implemented (as of
September, 2012) are:
- Prohibition of lifetime limits and restriction on annual limits. Health plans are prohibited from placing lifetime limits on essential health benefits and, after 2014, will be prohibited from placing annual limits on essential health benefits. Health plans may currently establish a restricted annual limit on the value of essential health benefits. Both provisions are directly tied to benefits defined as “essential health benefits” in the legislation; however, there is still ambiguity about what the essential benefits package includes.
- Coverage for preventive services. Plans must cover, without cost-sharing, a variety of preventive services as determined by organizations such as the U.S. Preventive Services Task Force and the Centers for Disease Control and Prevention.
- Internet portal. The ACA requires HHS to create an Internet portal to facilitate consumers’ and small employers’ purchase of coverage. This will make information about options including access to public programs, high-risk pools and private market coverage readily available to the public. The Internet portal is now available at: www.healthcare.gov.
- Coverage for emergency services. Plans covering emergency services must meet standards that include factors such as not requiring prior authorization, covering services from nonparticipating providers and not allowing out-of-network cost-sharing to exceed in-network rates.
- MLR reporting. Health plans must conform to an 80 percent Medical Loss Ratio (MLR) in the individual and small group markets and 85 percent MLR in the large group market, by 2011. Plans are required to pay rebates to enrollees if they fail to meet the requirement.
- Internal/External appeals. Health plans must provide an internal appeals process that follows applicable state law and any applicable HHS requirements, such as ERISA requirements, and provide for an external appeals process that complies with either an applicable state law or with HHS standards.
- Any willing participating provider. Plans must allow members to designate their own primary care physicians (PCPs), OB/GYNs and pediatricians from among participating plan providers. Prior authorization or referral requirements for OB/GYNs are also prohibited.
- No pre-existing conditions exclusions for children. Plans are prohibited from excluding from coverage children with pre-existing conditions who are under 19 years of age. Limitation on rescissions. Insurers and group health plans may not rescind an enrollee’s coverage unless the individual has performed an act that constitutes fraud against the plan or has intentionally misrepresented a material fact to the plan.
- Over-age dependent coverage. Group and individual market health plans providing coverage for dependent children must continue to make coverage available for an adult child until the child turns 26 years of age.
Most of the more far-reaching provisions of the legislation do not take effect until 2014. Next week we’ll address the provisions that will be enacted and what will happen in 2014 and beyond.
by Stacy Madden