Posts Tagged ‘National Association of Insurance Commissioners’

Which One Do You Like? Healthcare Insurance Exchanges or Marketplaces?

Wednesday, May 23rd, 2012

If a Medicare staff recommendation is okayed, health insurance exchanges may be re-named.  According to Kaiser Health News , that is because, Medicare officials say consumers understand words like “marketplace” better.  “We are recommending not using the word ‘exchange’” in enrollment materials, said Julie Bataille, director of the CMS Office of Communications.  While Bataille didn’t mention the preferred substitute, she dropped hints.  “Words like ‘marketplace’ resonate much more with the consumer and also tend to be something that is all inclusive,” Bataille said.

According to Bataille, “exchange” can have a number of different meanings to consumers, including the idea that they may have something to trade.  The Patient Protection and Affordable Care Act (ACA) requires the federal government to establish health insurance exchanges in states that refuse to create their own.  They are often described as online marketplaces similar to or, where consumers can search for insurance policies that fit certain criteria.  Enrollment information will become available in the fall of 2013 and the exchanges — or whatever the ultimate name is – will start operating in 2014, unless the Supreme Court declares the law unconstitutional.

The word “exchange” appears 247 times in the ACA, while “marketplace” is not mentioned once, according to Kaiser Health News.  But that doesn’t mean officials are obligated to use it, said Brenda Cude, a professor of consumer economics at the University of Georgia and a consumer representative for the National Association of Insurance Commissioners.  “I don’t believe that Congress is any kind of expert on how to communicate with consumers,” she said.  But “marketplace” may not be a fool-proof alternative, Cude said.  She is concerned that comparing a health insurance exchange to a shopping website encourages the notion that the lowest price policy is the best choice.  That may be true when looking for a commodity like a cheap airfare to a single destination, but not for healthcare policies offering different benefits.

Bataille said the Medicare staff’s advice to avoid the term “exchange” is supported by external research and the agency’s focus group testing this year in Cleveland, Dallas, Miami, Philadelphia and Phoenix.  CMS “routinely” tests its materials and websites with consumers “to make sure we are serving our beneficiaries as well as possible,” Bataille said.  “So we see our work on the exchanges as an extension of that.”  According to Bataille, CMS will seek public comment on the enrollment materials before finally deciding whether to use the word “exchange” or “marketplace”.

HHS Awards State Health Insurance Exchange Dollars

Tuesday, December 13th, 2011

The Department of Health and Human Services (HHS) awarded nearly $220 million to 13 states to help them set up insurance exchanges under the Patient Protection and Affordable Care Act (ACA). States were also allowed additional time to apply for future grants while HHS stipulated that states who create their own internet-based exchanges must be operational in all states in 2014.

The recent awards bring to 29 the number of states that have made significant progress in creating Affordable Insurance Exchanges.  States that received funding include Alabama, Arizona, Delaware, Hawaii, Idaho, Iowa, Maine, Michigan, Nebraska, New Mexico, Rhode Island, Tennessee, and Vermont.  “We are committed to giving states the flexibility to implement the Affordable Care Act in the way that works for them,” HHS Secretary Kathleen Sebelius said.  “Exchanges will give consumers more choices and make it easy to compare and shop for insurance plans.”  In the new Exchanges, insurers will provide an easily understandable summary of benefits and costs to consumers.  The level of detail will hone competition between carriers, which is expected to make coverage more affordable.

It’s interesting to note that despite extensive opposition to the ACA, a majority of states have now accepted federal funding to establish health insurance exchanges.  Alaska is the only state that hasn’t applied for federal grants.

Of the 13 states that received this new round of grants, 12 are Level One grants, which provide one year of funding to states that have already made progress using their Exchange planning grant.  The 13th state, Rhode Island, received the initial Level Two grant, which provides multi-year funding to states that have made significant progress in the planning process.  Forty-nine states and Washington, D.C. have already received planning grants; 45 states have consulted with consumer advocates and insurance companies.  Thirteen states have passed legislation to create an Exchange.

The money is intended to provide the states with adequate flexibility and resources to deploy the marketplaces where consumers can shop and compare for a private health insurance plan that fits their needs.  The exchanges are slated to go live just two years from now.

According to Chiquita Brooks-LaSure, HHS director of coverage policy, “We continue to urge all states to establish their own exchanges and move forward with their implementation…while waiting for the Supreme Court to rule.”  The exchanges are a “bipartisan concept,” and states know that if they don’t establish an exchange by 2014, HHS will create one for them. She is “confident the law will be upheld.”  Sebelius said that as a former governor, state insurance commissioner and legislator, she understands “the importance of letting states lead” in creating their own version of a transparent healthcare system in which “insurance companies will have to compete for customers.  That means lower prices and better quality in the same marketplace in which members of Congress will have to shop for their coverage.”

The latest grants come nearly a month after the National Association of Insurance Commissioners asked HHS for greater flexibility in setting up the exchanges, suggesting state insurance commissioners might miss critical deadlines because they lack adequate funding and staff.  Additionally, HHS will delay by six months the deadline for states to apply for more federal funding to help run the exchanges.  HHS also will offer federal aid to states that miss deadlines.

No More Surcharges on Pre-existing Conditions

Tuesday, September 20th, 2011

There’s good news for Americans who lack healthcare insurance and have pre-existing medical conditions.  As of July 1, 2011, the Obama administration reduced the premiums  these people pay to purchase high-risk insurance plans that the federal government operates in 17 states and the District of Columbia.  Called pre-existing condition insurance plans (PCIPs), this coverage for people with medical conditions that often make then unable to buy insurance on the individual market was created by the Patient Protection and Affordable Care Act (ACA). 

Virginia and six other states will slash their premiums by 40 percent; other states and the District of Columbia will see cuts of between 15 and 25 percent; Mississippi will cut its rates by just two percent.  The revised rates give greater consideration to state-specific data and closely track the standard rates for individual policies in each state.  “Now, the program has been up and running for six to nine months, we’ve had an opportunity to redefine the methodology,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at the Department of Health and Human Services. 

Advocates for consumers and federal officials hope that the reduced premiums will encourage additional people to opt into the plans.  Although approximately 375,000 people were expected to sign up for the PCIPs, just 21,454 had enrolled as of April 30, 2011.  The biggest roadblocks are seen as high premiums and a legal requirement that enrollees lack healthcare insurance for six months prior to joining the program.

Another provision of the law could have the potential to make the plans even more affordable.  Some insurers are already cutting premiums to meet the new “medical loss ratio” requirements.  (Medical claims paid are considered losses in insurance jargon.)  If difficult economic times continue and people cut back on medical care, other insurers may follow suit.  “Plans are getting nervous about how big the rebates they’re going to have to pay are,” said Timothy Jost, a law professor at Washington and Lee University who’s a consumer representative to the National Association of Insurance Commissioners.

Compared to the legal requirement that people be uninsured for six months before signing up for the new plans, high premiums are probably a bigger stumbling block to enrollment, experts say. They can’t really do anything about the six months, because that’s in the law,” says Kansas Insurance Commissioner Sandy Praeger, who heads the health insurance and managed care committee for the National Association of Insurance Commissioners.  “But they can bring down the cost, which will help.”

The trend to ever-increasing healthcare premiums has led some organizations to ask for an extreme solution. Recently, the Greater Boston Interfaith Organization (GBIO) and Health Care for All issued a plea to freeze healthcare premiums for one year to sort out a better solution for healthcare companies and individuals alike.  The freeze’s supporters argue that the price hikes of health insurance have not evened out, despite the fact that more people are facing economic difficulties.  During the year-long freeze, the hope is that consumers will be better educated to find the best deals for their insurance and that companies could find ways to better meet their customers’ needs.

The cost reduction has made a major difference to Kathleen Watson of Lake City, FL, who had been uninsured since 2004 when COBRA coverage under her husband’s previous policy expired.  Because she has leukocytosis — a constantly elevated white blood cell count — locating affordable coverage was impossible.  Watson found herself in an even more difficult position in 2009 when she was diagnosed with non-Hodgkin lymphoma and developed an antibiotic-resistant bacterial infection while hospitalized with pneumonia.

When the ACA created the new plans for people with pre-existing medical conditions, Watson looked into coverage.  Unfortunately, the $605 monthly premium was more than she could afford on what she earns running a medical transport business.  When she learned that rates in the three plans were being reduced by 40 percent, Watson checked out the plans again.  This time, she signed up for an affordable $363 a month that started July 1.  “I’m just happy to have insurance now,” Watson said, noting that she immediately needs a CT scan and a lung biopsy to check out enlarged lymph nodes in her right lung, bladder and colon.  “Hopefully it does what it says.”

Discussions about further reductions could be in the works.  “It’s possible,” that the medical loss ratio requirements might further depress PCIP premiums, Larsen said.  “I wouldn’t care to speculate about that.”

Insurer Denies Teenage Girl Coverage Because She Was Diagnosed With an Overbite at Age 8

Thursday, July 15th, 2010

Insurance company cancelled teenager’s coverage because she was diagnosed with an overbite at age 8.  A suburban Chicago teenager had her healthcare coverage rescinded when her parents’ insurance company learned that she had been diagnosed with an overbite at age eight. An orthodontist and braces cured the overbite, but the insurer cancelled the girl’s coverage by claiming it was a pre-existing condition.  The girl’s parents fought back and – thanks to strong support from Illinois insurance regulators – the coverage has now been reinstated.

Thanks to healthcare reform legislation, this practice – known as rescission – will no longer be allowed as of late September except in cases where fraud is involved.  Illinois has one of the nation’s highest rescission rates with 12.9 for every 1,000 policies written.  The girl’s father, an attorney employed at a small firm, buys individual coverage for his family.  Insurance regulators say that rescission is most common in these circumstances.  People who are covered by company-sponsored programs rarely face rescission.  According to the girl’s father, “We didn’t try to hide anything.  Our orthodontist told us her mandibular hypoplasia was routine, and it was nothing the insurance company even asked us about on our application.  From our perspective, they didn’t even ask for the names of any of our children’s dentists or orthodontists.”

“There’s now a defined legal standard for when a rescission is appropriate,” said Michael McRaith, Illinois Insurance Director.  “In Illinois, our law was ambiguous, vague and left wide latitude and discretion with the insurance industry.”  The insurance industry defends rescissions as a necessary business practice when people misrepresented or lied about their medical histories on their applications.  Rescissions affect approximately seven percent of the population with private insurance who purchase individual policies.  Robert Zirkelbach, spokesman for America’s Health Insurance Plans, a lobbying group, said “Rescissions are very rare.  They are only used as a last resort.”

Congressional Democrats take another view.  “It was viewed by Congress as the tip of the spear,” said Representative Jan Schakowsky (D-IL).  “It typifies the practices of the insurance industry to maximize their profits that were so clearly anti-consumer and harmful to people who were counting on their health insurance at the moment they needed it the most.”