This is a series called “10 Health Care Outrages Fixed by Health Care Reform. I wrote this because I didn’t know what was in the big bill the President signed last March – and this was a good way to find out. Having read the contents, I’m actually proud of our government.
Outrage #10: Routine Claim Rejections
Insurance companies keep reimbursements down by rejecting fair claims and then making it difficult for you to fight the rejection.
Solution: Impartial Appeals Process. Health plans have to create impartial initial review and appeals procedures that let you fight coverage rejections. ♣
Outrage #9: Dollar Limits in Care
If you get too sick, you may run out of insurance because of limits on how much health coverage you get over your lifetime.
Solution: No Life Limit. Group plans will not be able to limit lifetime or annual dollar limits on “essential health benefits.” But, this gets phased in, starting at an annual limit of $750,000 to $2 million in 2013.
Outrage #8: Women Denied
Women have to fight to get to a gynecologist.
Solution: OB/GYN Covered! Plans cannot require preauthorization to see a gynecologist in the provider pool. Women get to pick a gynecologist as their primary care doctor. Ï
Outrage #7: Preexisting Condition – Dropped
If you get sick, your insurance company may drop you and say your illness was a “preexisting condition.”
Solution: Can’t Drop for Preexisting Condition. A group health plan cannot drop an existing customer unless it provides 30 days’ notice and the reason is fraud, intentional misrepresentation of a material fact, non-payment of premiums or plan termination.
Outrage #6: Pre-existing Condition – Denied
If you ever saw a Dr. for something minor, you may have a hard time getting new insurance. If you ever saw a Dr. for something MAJOR…
Solution: No Rejecting for Pre-existing Conditions. Starting 2014, insurance plans cannot reject applicants for pre-existing condition, regardless of age. An applicant’s prior coverage will be irrelevant.
Outrage #5: Sickness is Good for Business
Our medical system pays for keeping someone sick, not well.
Solution: No Copay for Prevention. Group plans must offer prevention services without copay or deductibles including immunizations and screenings for minors and breast cancer exams and mammograms for women.♣
Solution: Wellness Incentives: There are limits on the discount that can be offered for wellness incentives, like quitting smoking or being a nonsmoker. Those limits are getting raised to 30% of the premium and could increase to 50% at some point. (That means that smokers will probably pay more for insurance. But I still miss smoking.)
Outrage #4: ESP Required
Your insurance only covers the emergency room visits …(wait for it)… that you got approved in advance.
Solution: No Advanced Knowledge of Emergency Required. Plans that cover emergency room cannot require pre-authorization or in-network hospitals for emergency room visits.
Outrage #3: No One Reads It or Understands It
Your insurance policy is a riddle wrapped in an enigma that you unravel only when you are sick and scared and you need it.
Solution: Summary of Benefits: Starting in March, 2012, insurers and sponsors must give customers a summary of benefits in a format prescribed by regulation.
Outrage #2: Bad for Small Business
Health insurance is a huge burden on small business and a reason not to be an entrepreneur.
Solution: Small Business Coverage. Small employers with 100 or less on staff may be able to set up “simple cafeteria plans” if they contribute at least 2% of each employee’s compensation or contribute 200% of the employee’s contribution or p to 6% of the employee’s pay. Soonish.
Solution: Tax Credits. There are tax credits and subsidies to incentivize good coverage. “Small employers” can get a tax credit today if they contribute 50% of the premiums for all employees. That tax credit can be up to 35% of the company’s premium costs until 2013 and up to 50% of the cost in 2014 and 2015. The tax credit would reduce the company’s tax liability for income. Tax exempt companies can get a credit of 25% per year through 2013 and 35% in 2014 and 2015. Small employers cannot include companies with more than 10 employees making an average of $25,000 per year. The tax credit would reduce the company’s income and Medicare tax the entity must withhold from employee wages. However, the employee can take either the tax credit or the health insurance premium deduction, but not both. Finally, companies who offer coverage for retirees between 55 years old and 64, can get reimbursement for some claims. This is extremely limited in regulation and funding.
Outrage #1: Apple Pie Economics Rewards Cheap Employers
Companies can beat their competitors by charging less – if they let the government pick up the tab for employee health insurance.
Solution: Big Companies have to provide health insurance (a/k/a “Pay or Play”): Beginning in 2014, companies with 50 full time employees must either (1) provide “eligible” employees with “minimum essential” health plan coverage or (2) pay a penalty if an eligible employee gets insurance through a state exchange and qualifies for government subsidized benefits. The penalty is $2,000 per year, for each employee after the first 30.
Solution: The insurance provided can’t be crap. Employers also have to offer plans for which they pay 60% or more of the cost and that is not unaffordable or (2) pay a penalty if an eligible employee gets insurance through a state exchange and qualifies for government subsidized benefits “Unaffordable” will be a sliding scale based on the employee’s income and the percentage of costs covered by the employer. This penalty is $3,000 per year for every employee who gets government subsidized coverage up to the penalty amount the employer would pay if it offered no coverage at all.
Solution: And they have to provide vouchers in case the insurance isn’t that great. Every employer of every size who provides health coverage must provide vouchers to employees who qualify for government subsidized health coverage. The vouchers can be used to pay costs of coverage under an exchange plan. The voucher will probably offset penalties for inadequate coverage.
[box type=”info” border=”full” icon=”♣”]♣ Rules that apply only to new plans. Some mandates only apply to plans that are not grandfathered in, because it was in effect, and unchanged, since March 23, 2010. This symbol indicates a rule that does not apply to grandfathered plans. [/box]