June 15, 2010

Health Insurance Reform & You UPDATE

The Patient Protection and Affordable Care Act (PPACA), which was signed into law on March 23, 2010, ultimately will touch almost every American. The provisions of the law will be phased in throughout the next 10 years, with the most significant changes taking place in 2014. At this early stage, it is very difficult to predict what changes are in store for each of us. That is because there are numerous federal and state entities that must issue regulations, which will explain to insurance companies and others involved how the law will be implemented.

The PPACA will make dramatic changes in the insurance marketplace. The new law will require all health insurance policies to contain new benefits. It will require that health insurers rate health plans in new ways. Many health industry suppliers will be called upon to pay new taxes to cover the uninsured, thereby increasing their costs. The new reform legislation did not contain substantial provisions to control medical costs, which are the primary drivers of premium costs. These facts taken together mean that for most Americans, the cost of health insurance will rise. By 2014, many Americans will be eligible for government subsidies, which will help offset those increases. In the meantime, those with private insurance should expect there to be some increase in cost as reform provisions are implemented.

That being said, Arkansas Blue Cross and Blue Shield and its family of companies are committed to doing all we can to hold costs down and help our customers understand how they will be affected. With the understanding that the final rules are not in place, described in this article are the changes we believe will be required by the new law during the next 18 months, based on the kind of policy you have and when you enrolled in it. Until we better understand the requirements, which will come with the issuance of regulations, we are not able to accurately price the changes.

If you have health insurance through your employer and were enrolled before March 23, 2010 (at least one enrolled person):

Insurance policies that were in place on the day the law was passed are considered “grandfathered” plans. The new requirements for these plans are more limited than for those sold after the law was enacted. Changes that members enrolled in grandfathered employer group plans can expect during the next six to 18 months may include:

• New rules around pre-existing health conditions for children, which may mean that children who are insured under their parent’s health plan do not have to meet any pre-existing condition waiting periods even if the parents are required to do so as a result of some condition of their enrollment (late enrollment, no prior creditable coverage, etc.).
• Dependents can continue coverage under a parent’s plan until their 26th birthday. Dependents are eligible regardless of student or marital status. Dependents also are eligible regardless of whether they are claimed as a dependent on their parent’s tax return. Policies in place before March 23, 2010, are allowed to exclude coverage to dependents if they have access to their own coverage from another employer-sponsored health plan. This exception expires on Jan. 1, 2014. (More information on dependent coverage.)
• Lifetime dollar limits will be removed on “essential benefits.” The rules and guidelines outlining what benefits are considered essential have not been defined by the government as of this printing.
• On most Arkansas Blue Cross plans, the lifetime maximum benefit is currently $5,000,000. This lifetime benefit would become unlimited.
• The dollar limits for some benefits in place today may be adjusted by the law. The benefits to which this regulation applies have not been determined.

If you had an individual or family medical policy in place March 23, 2010 (in which you were enrolled):

Insurance policies that were in place on the day the law was passed are considered “grandfathered” plans. The new requirements for these plans are more limited than for those sold after the law was enacted. Changes that members enrolled in grandfathered plans can expect during the next six to 18 months may include:

• Dependents can continue coverage under a parent’s plan until their 26th birthday. Dependents are eligible regardless of student or marital status. Dependents also are eligible regardless of whether they are claimed as a dependent on their parent’s tax return. (More information on dependent coverage.)
• Lifetime dollar limits will be removed on “essential benefits.” The rules and guidelines outlining what benefits are considered essential have not been defined by the government as of this printing.
• On most Arkansas Blue Cross plans, the lifetime maximum benefit is currently $5,000,000. This lifetime benefit would become unlimited.

If you were enrolled in a health plan through your employer effective April 1, 2010, or after:

For more recently effective health plans, a number of changes apply during the next six to 18 months. These changes may include:

• New rules around pre-existing health conditions for children, which may mean that children who are insured under their parent’s health plan do not have to meet any pre-existing condition waiting periods even if the parents are required to do so as a result of some condition of their enrollment (late enrollment, no prior creditable coverage, etc.).
• Dependents can continue coverage under a parent’s plan until their 26th birthday. Dependents are eligible regardless of student or marital status. Dependents also are eligible regardless of whether they are claimed as a dependent on their parent’s tax return. (More information on dependent coverage.)
• Lifetime dollar limits will be removed on “essential benefits.” The rules and guidelines outlining what benefits are considered essential have not been defined by the government as of this printing.
• On most Arkansas Blue Cross plans, the lifetime maximum benefit is currently $5,000,000. This lifetime benefit would become unlimited.
• The dollar limits for some benefits in place today may be adjusted by law. The benefits to which this regulation applies have not been determined.
• Emergency services must be covered at the in-network coinsurance or copayment level even if you receive the services at an out-of-network facility. (This benefit is already offered by Arkansas Blue Cross and Health Advantage.)
• Access to any in-network primary care physician or pediatrician who is accepting new patients. (Already available.)
• Direct access for women to obstetricians/gynecologists without a referral.
• Preventive services identified by the U.S. Preventive Services Task Force will be covered with no member cost-sharing (copayments, deductibles or coinsurance.) The specific services that will be covered have not yet been identified.

If you were enrolled in a family or individual medical policy on April 1, 2010, or after:

For more recently effective health plans, a number of changes apply over the next six to 18 months. These changes may include:

• New rules around pre-existing health conditions for children which may mean that children who are insured under their parent’s health plan do not have to meet any pre-existing condition waiting periods even if the parents are required to do so.
• Dependents can continue coverage under a parent’s plan until their 26th birthday. Dependents are eligible regardless of student or marital status. Dependents also are eligible regardless of whether they are claimed as a dependent on their parent’s tax return. (More information on dependent coverage is in the article on Page 6.)
• Lifetime dollar limits will be removed on “essential benefits.” The rules and guidelines outlining what benefits are considered essential have not been defined by the government as of this printing.
• On most Arkansas Blue Cross plans, the lifetime maximum benefit is currently $5,000,000. This lifetime benefit would become unlimited.
• The dollar limits for some benefits in place today may be adjusted by law. The benefits to which this regulation applies have not been determined.
• Emergency services must be covered at the in-network coinsurance or copayment level even if you receive the services at an out-of-network facility. (Arkansas Blue Cross already offers this benefit.)
• Access to any in-network primary care physician or pediatrician who is accepting new patients. (Already available.)
• Preventive services identified by the U.S. Preventive Services Task Force will be covered with no member cost-sharing (copayments, deductibles or coinsurance). The specific services that will be covered have not yet been identified.
• Direct access for women to obstetricians/gynecologists without a referral will be included in all policies.

In addition to the new requirements described above, PPACA includes additional regulations that may impact members. These provisions include:

• New appeals processes will be established.
• The federal Department of Health and Human Services will create a Web site to facilitate consumer and small group health plan shopping.
• State ombudsman programs will be established.
• Over-the-counter drugs not prescribed by a physician can no longer be reimbursed from a flexible spending account or HRA.

These are the changes you can expect in the next six to 18 months. As regulations are clarified, Arkansas Blue Cross will notify you of those provisions that impact your policy. Most importantly, we will keep you informed of the impact these changes may have on your rates.

The most substantial changes will be implemented in 2014. Those provisions will change where and how you buy insurance, how it is priced and how you pay for it. As regulations are issued, Arkansas Blue Cross will provide you with as much information as possible to help explain health insurance reform and its impact on the health care industry. Please visit our Web sites or contact us with any questions you may have.