More of PPACA enacted: No discrimination against pre-existing, chronic conditions
As expected, the Obama administration moved forward to implement provisions in the healthcare reform law that would make it illegal for insurance companies to discriminate against those with pre-existing conditions. The provisions of the Patient Protection and Affordable Care Act (PPACA) also would make it easier for consumers to compare health plans and employers to promote and encourage employee wellness.
Starting in 2014, PPACA will prohibit health insurance companies from discriminating against people who have pre-existing conditions, which the U.S. Department of Health and Human Services (HHS) estimates affect 129 million non-elderly Americans. Under the proposed rule, health insurance issuers would generally be prohibited from denying coverage for such conditions, and individuals would have new special enrollment opportunities in the individual market when they have certain losses of other coverage. Under the regulation, insurance companies will be permitted to vary premiums within limits based on age, tobacco use, family size and geography. Payers will no longer be able to use factors such as pre-existing conditions, health status, claims history, gender and occupation as reasons to increase premiums.
The market-reforms proposed regulation (PDF) also requires health insurance issuers to maintain a single, statewide risk pool for each of their individual and small employer markets, unless a state decides to merge the individual and small-group pools into one pool. Premiums and annual rate changes would be based on the health risk of the entire pool. And it includes provisions for enrollment in a catastrophic plan in the individual market for young adults and people who otherwise would find coverage unaffordable.
HHS also issued a proposed rule outlining policies and standards for coverage of essential health benefits, while giving states more flexibility to implement the Affordable Care Act. Essential health benefits are a core set of benefits that would give consumers a consistent way to compare health plans in the individual and small group markets. A companion letter on the flexibility in implementing the essential health benefits in Medicaid was also sent to states.
PPACA requires that health plans in the individual and small-group markets—both inside and outside health insurance exchanges—include a core package of essential services. Essential health benefits must include products and services in 10 categories, such as emergency services, hospitalization, maternity and newborn care, prescription drugs, mental health and substance-abuse disorder services and pediatric services including oral and vision care. The proposed rule prohibits benefit designs that could discriminate against potential or current enrollees, and includes special standards for health plans related to benefits that are not typically covered by individual or small-group plans, such as rehabilitative services.
Meanwhile, the actuarial value (AV) component of essential health benefits is determined as the percentage of total average costs for benefits that a plan would cover. In 2014, non-grandfathered health plans in the individual and small-group markets must meet certain levels, depending on whether they are a bronze (60 percent), silver (70 percent), gold (80 percent) or platinum (90 percent) plan. Under the new regulation, HHS proposes that a plan could meet a certain level if its AV is within 2 percentage points of the standard. For example, a silver plan may have an AV of between 68 percent and 72 percent, as explained in the HHS summary.
HHS also issued a proposed rule implementing and expanding employment-based wellness programs to promote health and help control healthcare spending, while ensuring that individuals are protected from unfair underwriting practices that could otherwise reduce benefits based on health status.
The proposed rule will be published in the Federal Register on Nov. 21.