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As PPACA Deadlines Near, States Dawdle

 |  By John Commins  
   February 01, 2013

Perhaps some state lawmakers were waiting for the U.S. Supreme Court to rule on whether or not key provisions of the Patient Protection and Affordable Care Act were constitutional.

Other state lawmakers, no doubt, were waiting to see who won the November presidential election.

And, of course, many state lawmakers view the PPACA as an egregious federal intrusion on state sovereignty that should be derailed or delayed at every opportunity.

Whatever the reasons, a  report released this Thursday by The Commonwealth Fund shows that only 11 states and the District of Columbia have passed laws or issued regulations to implement the PPACA's health insurance market reforms that go into effect in just 11 months.

Thirty-nine states have taken no action. The Commonwealth Fund says that could limit those states' enforcement of the reforms, which include bans on preexisting conditions, a minimum benefit standard, and limits on out-of-pocket costs.

"These are incredibly important market reforms that guarantee that people have access to health insurance coverage starting in January," Sara R. Collins, vice president, Affordable Health Insurance, at The Commonwealth Fund, told HealthLeaders Media.

"There has been some uncertainty about the law given the Supreme Court decision as well as the election. Now that those uncertainties are gone you would expect to see in this legislative session more action by a large number of states," she says.

"So far not many states have passed the needed legislation or issued regulations that the need to but you probably can expect some considerable activity in the coming year. States really need to press forward and implement these provisions and bake them into their laws."

According to The Commonwealth Fund, the seven reforms that begin Jan. 1,2014 apply to health plans inside and outside the exchange include:

  • Guaranteed Issue: Requires insurers to accept every individual and employer that applies for coverage.
  • Ban on Waiting Periods: Employers cannot impose waiting periods longer than 90 days before an employee can be eligible for coverage.
  • Rating Requirements: Insurers are restricted from using health status, gender, and other such factors in setting premiums.
  • Ban on Preexisting Condition Exclusions: Insurers cannot exclude or limit coverage for people with preexisting health problems.
  • Essential Health Benefits: Requires insurers to cover a comprehensive set of health benefits.
  • Out-of-Pocket Cost Limits: Holds out-of-pocket costs to the level established for high-deductible health plans that qualify for health savings accounts.
  • Actuarial Value: Requires insurers to cover at least 60% of total costs under each plan and sell plans that meet new benefit tiers based on average costs covered.

To date, Connecticut is on the leading edge of ACA insurance reform implementation as the only state to pass legislation that addresses all seven of the new reforms. California is a close second, having passed legislation on six of the seven reforms.

Nine states—Arkansas, Maine, Maryland, New York, Oregon, Rhode Island, Utah, Vermont, and Washington—and the District of Columbia have passed laws or issued new regulations covering at least one of the seven new market reforms, The Commonwealth Fund says.

Collins says it's not too late for many states to get up to speed. Even if they can't, she says,  consumers won't be left to fend for themselves because the federal government will step in to enforce baseline provisions.

"The law is sweeping in terms of the new reforms to the individual and small group insurance markets which have made it so difficult for individuals and small businesses to get coverage over the last several years," Collins explains.

"These are truly important provisions and the law will make it much easier for people to get a health plan, particularly people who have health problems or who are over. It is critical that states move forward and pass legislation to implement these laws so the citizens in their states can benefit from them. If they don't, this is a federal law so the federal government would enforce the provisions."

In addition, The Commonwealth Fund says state legislatures around the nation will act quickly this year to implement laws dealing with the PPACA and insurance markets. The report cited an earlier study of state action taken to implement the PPACA's 2010 health insurance market reforms found that nearly all states ultimately required or encouraged compliance with those reforms, which included bans on lifetime limits on benefits and dependent coverage for young adults up to age 26.

"It is encouraging that nearly all states took action on the Affordable Care Act's early market reforms in 2010," The Commonwealth Fund President David Blumenthal, MD, said in prepared remarks. "Now, it is critical that states do the same with these reforms, to help ensure that their residents benefit from secure, affordable health insurance coverage."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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