If you have lost your COBRA subsidies, check around with various healthcare insurers. For instance, Blue KC has many affordable direct pay plan options available. If interested, visit www.BlueKC.com.

Rate Review

On May 23, 2011, the final rule for the Department of Health and Human Services and States to establish a process for the annual review of unreasonable premium increases for health insurance coverage was published in the Federal Register. The rate review program is designed to ensure that all rate increases that meet or exceed an established threshold (10 percent) are reviewed by the appropriate state or Centers for Medicare & Medicaid Services to determine if the rate increases are unreasonable.

The rule applies only to the individual and small group market segments. Grandfathered plans, excepted benefits (benefits not required to comply with most of the HIPAA portability requirements like limited scope dental and vision), and retiree-only plans remain outside the scope of the regulations. The rule is effective for all rates submitted or effective as of September 1, 2011.

Internal Claims and Appeals and External Review

On June 24, 2011, an amendment (and some technical guidance) to the rules on internal claims and appeals and external review was published in the Federal Register, changing some of the previously published requirements. The Department of Labor, Treasury Department, and HHS reexamined and amended the interim rule after stakeholders stated the original rules would be difficult and costly to administer within the timelines required. The proposed rules related to internal claims and appeals and external review now include:

• Requirements for additional information to be placed on the EOB (Explanation of Benefits). This information includes a description of the internal and external review requirements;
• A requirement that additional information be available in culturally and linguistically appropriate for individuals living within certain counties in the United States (as determined by CMS);
• A requirement that individual members have access to only one level of internal appeal;
• Requirements related to a state and/or federal external review process, accessible to all members for certain types of denials.

Previously published rules related to requirements for diagnosis and treatment codes and 24 hour urgent care claims turnaround were removed.

Reinsurance, Risk Corridors, and Risk Adjustments

On July 15, 2011, HHS published proposed regulations in the Federal Register regarding Affordable Insurance Exchanges. Exchanges will allow individuals and small businesses to purchase private health insurance beginning in 2014 as required in the Patient Protection and Affordable Care Act.

To help protect insurers against risk selection and market uncertainty associated with coverage provided in the Exchange, the proposed regulation establishes three programs that begin in 2014 that govern: (1) reinsurance, (2) risk corridors, and (3) risk adjustment. The transitional reinsurance program for the individual market and the risk corridor program for individual and small group markets are temporary programs to provide payment stability as insurance market reforms begin. The risk adjustment program is a permanent program that will make payments to health insurance issuers that cover higher-risk populations.

Women’s Preventive Services

On August 3, 2011, regulators published an amendment to the rules related to coverage of preventive services in the Federal Register that include new recommendations/guidelines for women’s preventive services. In non-grandfathered plans, the below services must be covered without any cost to the women, if received from network providers:

• Well-woman visits;
• Screening for gestational diabetes;
• Human Papillomavirus (HPV) DNA testing;
• Counseling for sexually transmitted infections;
• Counseling and screening for human immune-deficiency virus (HIV);
• FDA-approved contraception methods and contraceptive counseling;
• Breastfeeding support, supplies, and counseling; and
• Screening and counseling for interpersonal and domestic violence.

These mandates are effective for plan years beginning on and after August 1, 2012.

Exchanges

On July 15, 2011, HHS published proposed regulations regarding Affordable Insurance Exchanges in the Federal Register. Exchanges will allow individuals and small businesses to purchase private health insurance as required by Patient Protection and Affordable Care Act.

The regulation proposed Establishment Standards and Other Related Standards that States must meet to establish an exchange and outlines the minimum requirements that health insurance issuers must meet to participate in the exchange and offer qualified health plans. The proposed rule also provides basic standards that employers must meet to participate in the Small Business Health Options Program.

Again, these are proposed regulations. We’ll provide updates here as we learn of them to make sure you’re aware of reform changes and what they may mean to you.

States can have some flexibility when it comes to setting up their health insurance exchanges, according to the proposed regulations. Up to this point, many states have struggled with exchange planning, threatening their ability to meet a 2013 deadline, which would put them at risk for the government to run their state exchanges.

For states that aren’t quite ready to meet the January 1, 2013, deadline, the Department of Health and Human Services may issue “conditional approval,” extending the timeline for states wanting to establish health exchanges.

The 244-page regulation also addresses the standards for establishing exchanges and the certification process for health plans to sell on the exchanges. But many critical components were left unaddressed, including what benefits insurers will be required to cover.

So far, 12 states have passed bills that establish exchanges or expressed their intention to establish one, but other states continue to oppose implementation..

The Obama administration has started preparations for a federal fallback for those states that do not set up their own exchanges. It would take one year to transition a federally-administered exchange to a state-based one.

Missouri and its Senate Interim Committee continue to evaluate Missouri’s options for a state-based health insurance exchange.

Under the Affordable Care Act, the federal health care reform law, each state must set up its own exchange where small businesses and individuals can sign up for insurance. If states do not set up their own exchanges (or show development of a viable exchange by January 1, 2013), the federal government will develop the exchange for them – something that Missouri has stated it does not want to happen.

The seven-member interim committee will study several exchange proposals. House Bill 609, considered by the General Assembly this year, would have established the “Show-Me Health Insurance Exchange Act” and passed the House 157 to 0. However, the Senate failed to advance the bill and agreed to study the issue by forming this Interim Committee.

States can choose to participate in the program which is funded entirely by the Federal government and will end on January 1, 2014, when health insurance exchanges are formed.

Update on Eligibility Requirements

Starting July 1, 2011, in the 23 states and District of Columbia where HHS administers the federal PCIP, applicants will no longer need an insurance denial letter to be eligible. Instead, individuals can provide a letter from a doctor, physician assistant or nurse practitioner dated within the past 12 months stating that “they have or, at any time in the past, had a medical condition, disability or illness.” This same change was made for children in February. Other eligibility requirements would still apply, including having to have been uninsured for at least the last six months.

HHS does not administer the federal PCIP high-risk pools in Kansas or Missouri because both states have agreed to administer the federal pool in addition to their own respective state high-risk pools. Under a new bill passed in May, for the Kansas high-risk pool, Kansas no longer requires a child younger than 19 years of age to provide a denial letter from an insurance carrier in order to be eligible in those Kansas counties where child-only coverage is not available. For children living in a Kansas county where child-only coverage is available (i.e. Johnson and Wyandotte Counties), to be eligible for the Kansas high-risk pool, a letter from a carrier demonstrating that the premium rate quoted was in excess of the high-risk pool rate is still required.

Note to Agents and Brokers: HHS stated that, starting this Fall, it will “begin paying agents and brokers for successfully connecting eligible people with the PCIP program.” No further information about these payments was provided.

The Exchanges are a result of the Federal Patient Protection and Affordable Care Act that mandates everyone have health insurance by 2014. They would provide, at the state level, an online marketplace for individuals and small groups to purchase health insurance.

If legislation is not passed for Missouri to operate its own State-based Exchange, the alternative will be to have an Exchange that is run and overseen at the federal level. Proponents of a State-based Exchange want to keep the oversight on a “local” level and predict that a federally-operated Exchange would eliminate the ability to meet the needs of Missourians. Keeping the control at a State level would allow Missouri representatives, who have a closer connection with Missouri residents, to create the best Exchange for them.

A health insurance exchange is a competitive marketplace that provides consumers with open, transparent information about private insurance plans. Consumers still buy their policies from private health insurance companies – this new structure simply provides an efficient marketplace for them to do so.

Health insurance has traditionally been managed and regulated by the states. Reform regulations allow states to develop and run their own state exchanges. If a state does not do this, the federal government will run the exchange. If structured properly and by the state, this new marketplace would offer transparent, competitive and affordable plans to consumers from private insurance companies; reduce the number of uninsured people; and make health programs more efficient and effective.

Creation of a state-based exchange will allow a state’s elected representatives, the State’s Department of Insurance and other key state stakeholders to maintain control over a critical element of health care reform by leveraging their knowledge of the state, its people, and how they believe consumers want to buy insurance. The states would create a service tailored to the needs of their consumers, including small businesses.

An exchange bill has been making its way through the Missouri legislature. It passed the House of Representatives and will be voted upon in the next few weeks by the Senate.

The state of Kansas has opted for a different approach as it has decided to introduce legislation next year and focus this session on work groups to determine what should be included in the legislation next session.

To realize all the benefits that exchanges can produce, Missouri needs to be in charge of creating and operating this exchange. When the time comes, Blue KC is hopeful Missouri will use its votes to call for a State-run exchange so Missouri can run its own exchange.

Every employer will have to address this part of the legislation by October 2012. There are still many unanswered questions about this coverage, but employers will have to decide if they are going to offer it to their employees or not.

Blue KC can help educate employer groups about this topic. CLASS coverage will be issued to the applicant regardless of the applicant’s health condition and premiums must be paid in for five years before coverage becomes effective. All projections are that the coverage will be minimal and expensive.