While the public insurance options and health exchanges have dominated the health reform headlines, a bigger question to be considered is what other proposed insurance market reforms are included in the federal legislation that could make broad changes in the way healthcare is selected and used by everyone?
The three major healthcare reform bills currently being considered in the House and the Senate have similar provisions addressing these insurance practices—"suggesting that lawmakers are in agreement that these issues must be fixed," according to a new white paper released Monday by the National Patient Advocate Foundation, a national nonprofit organization headquartered in Arlington, VA.
The paper said that the insurance market currently is "broken" in three major respects:
- Insurance is often not financially accessible at any affordable price because of enforcement of pre-existing condition exclusions through "underwriting."
- The magnitude and severity of these insurance market failures is increasing over time, with health insurance often providing inadequate financial protection because of high out-of-pocket health expenses through deductibles, copayments, and limitations in coverage.
- Insurance often imposes annual or lifetime (general or disease-specific) limits on coverage—leaving the patient effectively uninsured after they reach limits.
In the latest House bill (HR 3962), which is expected to be brought to the House floor for debate this week, there are many insurance reforms to be addressed, beginning in 2010:
- Rescissions would only be permitted when fraud occurs and would be subject to independent review.
- Plans would be required to justify premium increases through an annual review process that would be conducted by the Health and Human Services secretary working with the states.
- A "look back" period that would apply for purposes of determining whether a person has pre-existing conditions would shrink from six months to 30 days, plus the period when a plan could exclude coverage for pre-existing conditions of new enrollees would be decreased from 12 months to three months.
- Individuals under age 27 who are not otherwise covered would be could remain on their parent's health policy if requested.
- Lifetime limits with a policy would be prohibited.
Also, beginning in 2013, other insurance market reforms would take effect under the House bill, such as guaranteed issue and renewal, no pre-existing condition exclusions, no premium variation based on health status or gender, and premium variation based only on age, geography, and family size.
Plus, in 2013, a public insurance option would be established, along with the health insurance exchange in which individuals without coverage and small employers would be eligible to purchase coverage. The exchange would be administered by a health choices commissioner, under the House bill, who would have authority to set standard for participating plans, auditing, and enforcing insurance market reforms.
As for payment rates, the Congressional Budget Office on Monday noted in a memo that the maximum share of income that enrollees would have to pay for a reference plan in 2013 would range from 1.5% for those with income less than or equal to 133% of the federal poverty level to 12% for those with income equal to 400% of the federal poverty level. (A reference plan refers to the premiums equal to the average of the three lowest cost "basic" plans, as defined in the bill.
Those with income below 150% of the federal poverty level would generally be eligible for Medicaid and ineligible for subsidies within the exchanges.