(Editor’s Note: We want to welcome a new voice to our blog and hope that she’ll be a frequent contributor to Say Ahhh! Sabrina Corlette has taken over the reins from our former colleague Karen Pollitz and is our new resident expert on regulation of the private health insurance market and consumer protection issues. While she’s technically with the Health Policy Institute, she collaborates closely with CCF.)
By Sabrina Corlette, Research Professor, Georgetown University Health Policy Institute
On Tuesday, I sat in the East Room of the White House and
listened to the President as he announced the release of a set of rules
implementing provisions of the Affordable Care Act that will help protect consumers
from some of the worst insurance industry abuses. I couldn’t help but think back ten years ago, when I was a
staffer in the U.S. Senate, working on “Patients’ Bill of Rights” legislation. At the time, I met with many patients
and families from around the country who’d suffered from decisions by their
health plan to deny or limit needed care, and to limit their choice of
doctors. Many of these families
had children with special health care needs and were facing terrible decisions
about what tests, surgeries, and drugs they could afford because their health
plan was not providing the coverage they needed.
That was ten years ago. While the bill never garnered the votes it needed for
passage, the difficulties those families faced never went away. Thousands of children continue to be
denied coverage because of a “pre-existing” medical condition. Families that dutifully pay their
premiums are abruptly dropped from their policies after filing a claim – and
told it’s because they didn’t fill out their application correctly. And countless children with high cost
medical conditions are hitting their plans’ annual and lifetime limits on
coverage, leaving families to forgo needed treatment or face medical bankruptcy.
On Tuesday, as I listened to the President describe the
insurance reforms that will be effective in September of this year in this
latest round of rulemaking, I realized – it took ten long years, but we finally
passed that “Patients’ Bill of Rights”. It was one of the happiest moments of my
life.
So what does this rule do?
First, it says that insurance companies can no longer
deny or limit coverage for children who have a pre-existing medical
condition. This provision is
estimated to help up to 162,000 children gain access to coverage they don’t
currently have. This provision
applies to all plans except individual policies that are grandfathered (i.e.,
those that were in existence prior to the law’s enactment and have not made
significant changes since.) For families that are in grandfathered
plans, they may need to change their policy in order to get the necessary
coverage for their child.
Second, it stops insurance companies from setting
lifetime limits on coverage, and restricts the amount of annual limits on
essential benefits. The ban on
lifetime limits applies to all plans, while the restrictions on annual limits
apply to all plans except those individual policies that are grandfathered. The restrictions on annual limits are
adjusted over time – in the first year the limits can be up to $750,000, in the
second year up to $1.25 million, and in the third year up to $2 million. Starting in 2014, all annual limits on
coverage of essential benefits are banned. HHS is charged with defining what constitutes the essential
benefits package, which will determine what items and services would be covered
under the annual limits restrictions.
However, HHS has not yet issued those regulations, and families will
temporarily need to rely on plans’ “good faith” definitions of what constitutes
essential benefits.
Third, it stops insurance companies from retroactively
cancelling a policy because of an unintentional mistake on an application. This is a particularly nasty industry
practice that leaves people stranded just when they need coverage the most.
This rule applies to all plans, including those that are grandfathered.
Fourth, it makes clear that health plan enrollees have
the freedom to choose any available participating primary care provider in
their plan’s network, including any available participating pediatrician for
their children. It also prohibits
companies from requiring a referral to see an OB/GYN. This applies to all plans except those that are
grandfathered.
Lastly, it prohibits all plans except those that are
grandfathered from charging higher cost-sharing for patients who need to use an
out-of-network emergency room. And
it sets some requirements for how plans reimburse out-of-network providers to
help protect patients from potential “balance billing.”
These new rules, which will go into effect starting
September 23, 2010, will provide critical relief and peace of mind to thousands
of families who count on their insurance to be more than an empty promise. It was a long time in the making, but
we finally did it.