Fi­nal in­surance regs re­leased

Pro­tec­tions in­cluded for pre-ex­ist­ing con­di­tions

Modern Healthcare - - LATE NEWS - Rich Daly

Fi­nal rules im­ple­ment­ing in­di­vid­ual and group in­surance mar­ket re­forms un­der the health­care re­form law were is­sued by HHS late last week. The highly an­tic­i­pated reg­u­la­tions gen­er­ally will bar in­surance com­pa­nies from charg­ing higher rates or deny­ing cov­er­age to ap­pli­cants with pre-ex­ist­ing con­di­tions. The fi­nal rules for in­surance plans pro­vid­ing cov­er­age in 2014 were lit­tle changed from a pro­posed rule pub­lished Nov. 26 in the Fed­eral Reg­is­ter.

The fi­nal rules al­low in­surance com­pa­nies to vary pre­mi­ums within lim­its based on age, to­bacco use, fam­ily size and ge­og­ra­phy—not fac­tors such as pre-ex­ist­ing con­di­tions, health sta­tus, claims his­tory, gen­der and oc­cu­pa­tion as rea­sons to in­crease pre­mi­ums.

One change was the cre­ation of a new def­i­ni­tion of “to­bacco use” that in­sur­ers can use to vary pre­mium rates by a po­ten­tially costly 1.5:1 ra­tio. The fi­nal rule capped the look-back pe­riod for in­sur­ers assess­ing pre­mi­ums to any to­bacco prod­uct used four times a week within the pre­vi­ous six months. But states can fur­ther re­strict that time­frame or fre­quency def­i­ni­tion.

The fi­nal age rat­ing bands drew sharp crit­i­cism from the na­tion’s largest health in­surer ad­vo­cacy group. “The new re­stric­tions on age rat­ing will re­sult in an overnight in­crease in health care costs for peo­ple in their 20s, 30s, and early 40s,” Karen Ig­nagni, pres­i­dent and CEO of Amer­ica’s Health In­surance Plans, said in a writ­ten state­ment.

The fi­nal rules also re­quire 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 small­group pools into one pool. Pre­mi­ums and an­nual rate changes will be based on the health risk of the en­tire pool.

An­other change from the pro­posed rule was to ex­empt stu­dent health in­surance cov­er­age from the sin­gle risk pool re­quire­ments for in­di­vid­ual and small-group mar­ket plans. Other changes in­cluded clar­i­fi­ca­tion of the cap on the num­ber of chil­dren that in­sur­ers can take into ac­count when com­put­ing fam­ily pre­mi­ums. The cap ap­plies to the three old­est “cov­ered chil­dren” un­der age 21.

Also in­cluded were pro­vi­sions for en­roll­ment in a cat­a­strophic plan in the in­di­vid­ual mar­ket for young adults and peo­ple who oth­er­wise would find cov­er­age un­af­ford­able. The fi­nal rules also in­cluded changes to an ex­ist­ing health in­surance rate re­view pro­gram, in­clud­ing the ad­di­tion of a re­quire­ment that in­surance com­pa­nies in ev­ery state report all rate in­crease re­quests.

The La­bor De­part­ment also pub­lished an in­terim fi­nal rule im­ple­ment­ing pro­vi­sions aimed at pro­tect­ing em­ploy­ees from re­tal­i­a­tion if they re­ceive sub­si­dized cov­er­age through one of the health in­surance ex­changes that launch next year. Cer­tain em­ploy­ers face ex­ten­sive fines if an em­ployee re­ceives such as­sis­tance.

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