U.S. sets final rule for insurance exchange coverage

Reuters

Posted on chicagotribune.com

2:47 PM CST, February 20, 2013

 

The Obama administration on Wednesday issued its long-awaited final rule on essential health benefits that insurers must offer consumers in the individual and small-group market beginning in 2014 under health care reform.

A cornerstone of President Barack Obama’s plan to enhance the breadth of health care coverage in the United States, the mandate allows the 50 U.S. states a role in identifying benefit requirements and grants insurers a phased-in accreditation process for plans sold on federal health care exchanges.

Wednesday’s rule included few changes from previous administration proposals, which could help states and insurers as they prepare for new online state health insurance marketplaces, known as healthcare exchanges, scheduled to begin enrolling beneficiaries for federally subsidized coverage on Oct. 1.

“The administration has been consistent in its approach to essential health benefits for more than a year, and that continued today. It’s good news for states and insurers because it means they don’t have to make any changes,” said Ian Spatz, a senior health care adviser at the consulting firm Manatt Health Solutions.

The exchanges are expected to cover as many as 26 million people within 10 years and seem likely to dominate individual and small group insurance markets. Another 12 million people are expected to receive health care coverage through an expansion of the Medicaid program for the poor, according to the nonpartisan Congressional Budget Office.

Obama’s Patient Protection and Affordable Care Act sets out 10 benefit categories that must be covered by most plans at the same level as a typical employer plan. The categories range from hospitalization, prescription drugs and maternity and newborn care.

Insurers including UnitedHealth Group Inc., Aetna Inc. and Cigna Corp. will use the government’s final word on these required benefits as they design plans and set premiums before the exchange launches. They have each said they will sell plans on some of the exchanges, but have not yet committed to which ones.

UnitedHealth, the largest insurer, said it is still reviewing the new rule. The company said the exchange insurance plans will essentially be a new type of coverage.

“In the long term, we are expecting and preparing for an ‘exchange’ category of coverage to become established as a new benefit category between Medicaid and the traditional commercial benefits markets,” spokesman Daryl Richard said.

The Department of Health and Human said the rule would mean greater access to mental health and substance abuse services by requiring parity with other health care benefits. HHS estimated that 62 million Americans would gain mental health coverage, an issue that has risen in importance after a string of mass shooting including last year’s elementary school massacre in Newtown, Conn.

The final rule preserved the state role in determining how the requirements are met by selecting their own benchmarks from plans sold within their respective borders. Most states opted for their home market’s largest small-group plan.

HHS kept to the benchmark rule despite objections from consumer groups who claimed that some of the selected plans were not comprehensive enough and argued for a single, uniform federal package.

But HHS officials found that maintaining states as primary regulators of state insurance markets would keep benefit offerings more in line with services typically offered through employer-sponsored plans in each state.

“The states continue to maintain their traditional role in defining the scope of insurance benefits and may exercise that authority by selecting a plan that reflects the benefit priorities of that state,” HHS said in the rule.

The administration also gave insurers the chance to phase-in requirements for plans sold on federally facilitated exchanges and denied requests from groups that wanted to exempt low-cost community health plans and Medicaid managed-care plans from the accreditation process.

 

Copyright © 2013, Reuters

 

Article Link: http://www.chicagotribune.com/business/breaking/chi-us-sets-final-rule-for-insurance-exchange-coverage-20130220,0,7203591.story 

 

What does the Affordable Care Act mean for you?

February 20, 2013 12:00 am  •  Christine Bryant Times Correspondent nwtimes.com

These next two years are important years in health care, with several provisions of the Patient Protection and Affordable Care Act taking effect.

Although several features have already been implemented, including prohibiting insurance companies from denying coverage to children based on pre-existing conditions and eliminating lifetime limits on insurance coverage, there’s a lot still to watch for in 2013.

 

Medicaid expansion

In a little less than a year, on Jan. 1, 2014, Americans younger than 65 whose family income is less than 133 percent of the poverty level will be eligible to enroll in Medicaid as part of a new initiative.

States will receive 100 percent federal funding for the first three years to support the expanded coverage, followed by 90 percent federal funding after the first three years.

The catch – states can choose whether they want to participate and accept the additional funding.

Several states have said yes so far, including Illinois. Indiana, however, remains undecided.

About half of the uninsured who want medical coverage under the Affordable Care Act will do so under Medicaid, and several Democrat lawmakers have called for Indiana to expand Medicaid under the act.

Gov. Mike Pence, who opposed the Affordable Care Act as a congressman, has not yet included money for the Medicaid expansion in his budget, saying it would cost too much money.

Dr. Alex Stemer, president of Franciscan Medical Specialists, says opting in would open Medicaid to thousands of families who couldn’t otherwise afford health coverage.

“I think it would be a misfortune for Indiana to decline it because it would bring a lot of healthcare dollars primarily to indigent neighborhoods, like Gary, East Chicago and Hammond,” he said.

Watch this year for Indiana to decide whether to participate in the Medicaid expansion.

 

Medicare payments

In the meantime, as of Jan. 1 this year, the Affordable Care Act requires states to pay primary care physicians Medicare payment rates for Medicaid patients. In other words, Medicaid payments to physicians will look more like Medicare payments.

The increase is fully funded by the federal government, and allows Medicaid patients to have more choices in which doctors they see because more doctors will now be willing to accept Medicaid.

While this may be beneficial to Medicaid patients, patients with private insurance may have more difficulty getting in to see their primary care physician in a timely manner, Stemer said.

This initiative is meant to keep more Medicaid patients from having to go the emergency room for medical help, but if a patient cannot get in to see his primary care physician, he may have to turn to the emergency room regardless, he said.

 

Health insurance exchanges

Beginning in 2014, if your employer doesn’t offer insurance and you aren’t on Medicaid, you must buy insurance in what is called the Health Insurance Marketplace – a health insurance exchange that is tightly regulated and offers citizens various plans from which to choose based on their needs.

No one can be turned down, and people who make between 133 and 400 percent of the federal poverty line will receive subsidies in the form of tax credits to help defer the cost.

States have the option on whether to form local exchanges, and if they choose not to, the federal government will.

Gov. Pence has said in the past he has opted to allow the federal government to run the state’s exchange.

If someone who can afford basic health insurance but chooses not to get it, he must pay a fee to help offset the costs of caring for uninsured Americans. If someone cannot afford it, he will be eligible for an exemption.

 

The cost

In 2012, employees paid a 1.45-percent tax for Medicare, but this year, if you earn more than $200,000, that tax goes up by 0.9 percent.

The Affordable Care Act also creates a new, 3.8-percent tax on investment income.

Some might also see an increase in their premiums, Stemer warns, because more people of various conditions will be covered.

“I don’t think health insurance is going to be cheaper, and a policy may cost more than last year,” he said. “There is a shift in covering those without preexisting conditions to those with preexisting conditions.”

Stemer also said the cost of medications will not decrease because that health care cost is not part of the Affordable Care Act.

“The U.S. government cannot negotiate those prices, so if the companies choose to raise those prices, the cost of health care for families will go up,” he said.

However, the increase in availability of generic drugs has helped alleviate many of those concerns, he said.

Stemer said there are still many uncertainties of how this act exactly will affect families – and it may differ for each individual family.

Many will benefit from this act, he said, but those who are healthy and rarely seek medical care may not benefit.

“We have a program with a lot of unknowns because it’s never been done before here,” he said.

 

Article Link: http://www.nwitimes.com/niche/get-healthy/health-care/what-does-the-affordable-care-act-mean-for-you/article_8db8e9e1-8a53-53b9-bb08-fec99d1c54cc.html