May of our clients are asking “How will the state insurance exchange affect me?”. The Center for Medicare and Medicaid Services published the U.S. Department of Health and Human Services (“HHS”) final rule that implements five key consumer protections from the Affordable Care Act, and makes the health insurance market work better for individuals, families, and small businesses on February 22, 2013. These five key consumer protections pertain to the upcoming State Exchange Health Insurance that must be implemented by January 1, 2014. “Because of the Affordable Care Act, being denied affordable health coverage due to medical conditions will be a thing of the past for every American,” said HHS Secretary Kathleen Sebelius. “Being sick will no longer keep you, your family, or your employees from being able to get affordable health coverage.”
How Will the State Insurance Exchange Affect Me?
Under these reforms, all individuals and employers have the right to purchase health insurance coverage regardless of health status. In addition, insurers are prevented from charging discriminatory rates to individuals and small employers based on factors such as health status or gender, and young adults have additional affordable coverage options under catastrophic plans.
What are the five key provisions to the Affordable Care Act?
On February 22, 2013, the Department of Health and Human Services issued the final rule implements five key provisions of the Affordable Care Act that are applicable to non-grandfathered health plans:
1. Guaranteed Availability
Nearly all health insurance companies offering coverage to individuals and employers will be required to sell health insurance policies to all consumers. No one can be denied health insurance because they have or had an illness.
2. Fair Health Insurance Premiums
Health insurance companies offering coverage to individuals and small employers will only be allowed to vary premiums based on age, tobacco use, family size, and geography. Basing premiums on other factors will be illegal. The factors that are no longer permitted in 2014 include health status, past insurance claims, gender, occupation, how long an individual has held a policy, or size of the small employer.
3. Guaranteed Renewable
Health insurance companies will no longer refuse to renew coverage because an individual or an employee has become sick. You may renew your coverage at your option.
4. Single Risk Pool
Health insurance companies will no longer be able to charge higher premiums to higher cost enrollees by moving them into separate risk pools. Insurers are required to maintain a single state-wide risk pool for the individual market and single state-wide risk pool for the small group market.
5. Catastrophic Plans
Young adults and people for whom coverage would otherwise be unaffordable will have access to a catastrophic plan in the individual market. Catastrophic plans generally will have lower premiums, protect against high out-of-pocket costs, and cover recommended preventive services without cost sharing.
Final rules for state insurance exchange guarantees health insurance for all!
In preparation for the market changes in 2014 and to streamline data collection for insurers and states, the final rule amends certain provisions of the rate review program. Additionally, the Department of Health and Human Services has increased the transparency by directing insurance companies in every state to report on all rate increase requests. A new report has found that the law’s transparency provisions have already resulted in a decline in double-digit premium increases filed: from 75 percent in 2010 to, according to preliminary data, 14 percent in 2013. In addition, today the U.S. Department of Labor announced an interim final rule in the Federal Register that provides protection to employees against retaliation by an employer for reporting alleged violations of Title I of the Act or for receiving a tax credit or cost-sharing reduction as a result of participating in a Health Insurance Exchange, or Marketplace.
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