Wednesday, October 5, 2011

HHS Report Outlines Effects Of Health Reform Law

One year after many of the health reform provisions took effect, the Department of Health and Human Services (HHS) released a report summarizing some of the results of the September 2010 implementation of provisions in the Patient Protection and Affordable Care Act. The report calls these provisions the “Patient's Bill of Rights.”

According to the HHS, some of the the Patient's Bill of Rights provisions that took effect in September 2010 had the following effects:

Public Health Service Act (PHSA) Sec. 2704 requires that group health plans and health insurance issuers offering group or individual health insurance coverage may not impose any preexisting condition on children under age 19. President Barack Obama's Administration estimates that up to 72,000 children who would otherwise be uninsured will gain coverage, and an additional 90,000 children are seeing their coverage limitations disappear because of this provision of the law.

PHSA Sec. 2712 generally prohibits group health plans and health insurance issuers offering group or individual coverage from rescinding coverage of an enrollee once the enrollee is covered. According to the HHS report, "Before the health care law was signed, an estimated 10,700 people suffered through a coverage rescission each year, often leaving them suddenly responsible for thousands of dollars in past expenses and no coverage to pay for needed care. One year after this prohibition went into effect, all Americans can be confident that they will not see their coverage rescinded over a trivial error."

PHSA Sec. 2713 requires that new health insurance plans have to cover recommended preventive services without cost-sharing. The report claims that "this year, as many as 41 million Americans are benefitting from this provision."

Under PHSA Sec. 2794, the HHS, in conjunction with the states, must establish an annual review process that will require insurers to submit a justification for any "unreasonable" premium increases prior to implementation. According to the HHS report, the following state activity has been accomplished because of this provision:

  • Connecticut's Insurance Department rejected a proposed 20% rate hike by one of the state's major insurers.
  • In August 2010, a major insurer in Massachusetts agreed to a significant reduction of proposed increases—less than 13% instead of the nearly 23% they initially requested.
  • In 2010, Oregon disapproved health insurance premium requests of 10%, 18%, and 20% in the individual market.
  • Rhode Island's Insurance Commissioner used his rate review authority to reduce a proposed rate increase by a major insurer in that state from 7.9% to 1.9%.
  • Nearly 30,000 residents of North Dakota saw a proposed increase of 23.7% cut to 14% following a public outcry.
  • In 2010, Californians were saved from rate increases totaling as high as 87% after a California insurer withdrew its proposed increase that was under scrutiny by the State Insurance Commissioner.

PHSA 2718 establishes minimum standards (medical loss ratio standards) for spending by health insurance issuers on clinical services and activities that improve quality. The HHS report states that "estimates indicate that up to 9 million Americans could be eligible for rebates starting in 2012 worth up to $1.4 billion."

PHSA Sec. 2714 requires that a group health plan and a health insurance issuer offering group or individual health insurance that provides dependent coverage of children must continue to make health coverage available for an adult child until the child turns 26 years old. The HHS report cites recent studies that suggest close to one million adult children have become covered under this provision.

ACA Sec. 1101 established thePre-Existing Condition Insurance Plan (PCIP) to make health insurance available to those that have been denied coverage by private insurance companies because of a pre-existing condition. So far, more than 30,000 people have gained coverage through this program.

ACA Sec. 1102 establishes the Early Retiree Reinsurance Program, which offsets some costs of early retirees' health insurance, providing much-needed financial relief for employers so retirees can get quality, affordable insurance. The HHS report notes that more than "6,600 health plan sponsors are participating in this program which provides coverage to well over 4.5 million early retirees, workers, and their families. In 2010, 97% of the funds from this program went to reduce premiums and/or cost sharing for health plan enrollees."

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