Gentle Reader –
This was a note sent to our local paper on 24 March, 2010 and – I think – ultimately published. The night health insurance reform was passed, I thought that within months, all of the contention would disappear and people would recognize that, while not perfect, this was an advance for the people of the United States. It appears I was – at least to date – wrong. I certainly did not predict that the Attorney’s General of several states would sue to block implementation. It is like deja vu all over again.
The passage Sunday evening by the House of Representatives of HR 3590, the bill passed by the Senate in December [of 2009], along with a set of Reconciliation Process “fixes” to that bill, is nothing if not historic.
Some of us are concerned about the meaning of this legislation. Below, I point out the provisions that go into effect immediately upon or soon after the President’s signing of the bill. For the vast majority of our citizens, this legislation is a historic advance.
Whether you knew it or not, you woke up Monday morning to a new landscape: the fear of losing everything you have worked for due to an illness; of being unable to find insurance; of having the insurance company deny you when you need them the most, these fears are gone.
Within 60 to 90 days you will begin to see the following changes in the way our health system functions; other changes will kick in over the next several years.
What happens immediately ?
For most of the provisions noted below, they become “live” within six months of enactment of this legislation:
1. Section 2711: No Lifetime or Annual Limits
A group health plan or health insurer offering group or individual health coverage may not establish lifetime limits or unreasonable annual limits. The insurance company is not allowed to impose a life-time limit on benefits; they can’t stop paying just when you need them the most.
2. Section 2712: Prohibition on Recisions
Insurance companies cannot eliminate your coverage because you get sick. If they try, you can have a review of what they have done; your coverage will remain in effect until the independent review is completed. You no longer will have to fight while you are sick in bed.
3. Section 2713: Coverage of Preventive Health Services
Group Health Plans and insurance companies offering group or individual health insurance coverage will provide, with no co-pay, evidence-based preventive services; recommended immunizations from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention; and with respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration. After a recommendation is made, the Secretary of Health and Human Services will set a time period after which the service will be covered. In essence, evidence-based preventive services will be available to all citizens.
4. Section 2714: Extension of Dependent Coverage
Group Health Plans and insurance companies offering group and individual plans will make coverage to an unmarried adult child until the child turns 26 years old. Plans and companies are not required to cover the child of a child receiving dependent coverage. The IRS definition of dependent is not changed by this law.
5. Section 2715: Development and Utilization of Uniform Explanation of Coverage Documents and Standardized Definitions
No later than a year after enactment of this bill, the Secretary of Health and Human Services will develop standards for the summary of benefits and coverage that is provided to enrollees. This information must be accurate. This should cause you less heart-burn as you try to read what your insurance does and doesn’t cover. The information has to be adequate to allow comparison with other plans, for example, coverage, costs shared, and so forth.
6. Section 2716: Prohibition of Discrimination Based Upon Salary
Coverage rules governing eligibility may not be based upon hourly or annual salary. The rules may not discriminate in favor of higher earners.
7. Section 2717: Ensuring the Quality of Care
No more than two years after the enactment of the legislation, the Secretary of Health and Human Services will develop reporting requirements that provide information on treatments and organizational models that improve quality outcomes. activities that prevent hospital readmissions, decrease medical errors and improve safety, and activities that implement wellness and health promotion. Model programs could be organized based upon this section. The impact on quality outcomes and costs will be reviewed.
8. Section 2718: Bringing Down the Cost of Health Care Coverage
An insurance company offering individual or group coverage will provide yearly to the Secretary of Health and Human Services a detailed accounting of their “Medical Loss Ratio” – the amount of their collected premiums that they pay out clinical and preventive services. This must be no less than 75% to 80% of collections or a rebate must be given to policy holders.
This means that the insurance companies MUST spend at least 75 to 80 cents of every dollar they bring in on clinical or preventive services, not the salaries and stock dividends to themselves and their share-holders.
Each hospital will be obliged to keep an updated list of their standard charges for items and services provided.
9. Section 2719: Appeals Process
An insurance company offering individual or group coverage will have both internal and external appeals processes for coverage determinations and claims. The policy holder will continue to receive treatment while the appeal is ongoing.
10. Section 2794: Ensuring Consumers Get Value for Their Dollars
Beginning 2010, insurance companies will have to justify why they are raising their rates before they do so. The evaluation of rate increases will be performed by the Secretary of Health and Human Services and insurance regulators from the States.
11. Section 1101: Immediate Access to Insurance for Uninsured Individuals with a Preexisting Condition
Not more than 90 days after the enactment of this legislation, the Secretary will set up a high risk insurance pool to provide coverage for those who find themselves with pre-existing conditions; coverage begins the day the program is activated. You no longer need worry about losing everything you have worked for because your child becomes ill.
12. Section 1102: Reinsurance for Early Retirees
This sets up a trust fund to ensure that a retired person who is not on Medicare, for example, doesn’t lose their coverage if the insurance program is in financial difficulty. This is essentially an insurance plan on insurance.
13. Section 1103: Immediate Information that Allows Consumers to Identify Affordable Coverage Options
No later the 1 July, 2010, mechanisms will be set up, including Internet Portals, that will allow the citizen of any State to identify affordable health insurance in that state.
14. Section 1104: Administrative Simplification
The creation of electronic billing systems with uniform standards. This is a significant advance and will decrease the administrative costs of medicine.
15. Section 2704 and 2705: Prohibition of Preexisting Condition Exclusion or Other Discrimination Based on Health Status
These provisions limit the ability of insurance companies to deny you coverage because you are sick, have been sick or someone on your family was sick.
16. Section 2701 and 2702: Fair Health Insurance Premiums, and Guaranteed Availability of Coverage
Rates will be carefully followed and can vary – to a limited extent – based upon individual versus family coverage, age, tobacco use, and area within a particular State. And in general, the health insurance issuer must accept anyone who applies.
17. Section 2703: Guaranteed Renewability of Coverage
Issuer must renew or continue coverage at the option of the plan sponsor or individual.
18. Section 2705: Prohibiting Discrimination Against Individual Participants and Beneficiaries Based on Health Status (Wellness Program Grants)
Wellness programs will be brought into existence that cover, for example, smoking cessation, health education, fitness memberships, and so forth.
These are only the provisions that go into effect immediately; there are others that become active more slowly.
While by no means perfect, these reforms are a huge advance for the American people. There will be, I am sure, mis-steps in the implementation of this legislation, it is new and significant. And there is still much to be done; this is health INSURANCE reform, not Health Reform. How we get better control of costs and ensure that we are providing high quality, patient- and family-centered care still needs to be worked on.
But overall, our people, the American people, won a huge victory Sunday evening. In five years we will scratch our heads in wonderment that it took almost 100 years for us to get this done.