Opinion ID: 3048533
Heading Depth: 4
Heading Rank: 1

Heading: Health status.

Text: (2) Medical condition (including both physical and mental illnesses). (3) Claims experience. (4) Receipt of health care. (5) Medical history. (6) Genetic information. (7) Evidence of insurability (including conditions arising out of acts of domestic violence). (8) Disability. (9) Any other health status-related factor determined appropriate by the [HHS] 29 Id. § 300gg-4 (effective Jan. 1, 2014). 6. Community rating. In the individual and small group markets and the Exchanges, insurers may vary premium rates only based on (1) whether the plan covers an individual or a family; (2) “rating area”; (3) age (limited to a 3–to–1 ratio); and (4) tobacco use (limited to a 1.5–to–1 ratio). Id. § 300gg(a)(1). Each state must establish one or more rating areas subject to HHS review. Id. § 300gg(a)(2)(B). This rule prevents insurers from varying premiums within a geographic area based on gender, health status, or other factors. 7. Essential health benefits package. The individual and small group market plans must contain comprehensive coverage known as the “essential health benefits package,” defined above. Id. §§ 300gg-6(a) (effective Jan. 1, 2014), 18022(a). The Act does not impose this requirement on large group market plans.37 8. Preventive service coverage. Insurers must provide coverage for certain enumerated preventive health services without any deductibles, copays, or other cost-sharing requirements. Id. § 300gg-13(a). Secretary. 42 U.S.C. § 300gg-4(a) (effective Jan. 1, 2014). 37 Rather, the large group market is subject to only a few coverage-reform requirements that apply broadly to either all insurance plans or group health plans in particular. See Amy Monahan & Daniel Schwarcz, Will Employers Undermine Health Care Reform by Dumping Sick Employees?, 97 VA . L. REV . 125, 147 (2011). 30 9. Dependent coverage. Insurers must allow dependent children to remain on their parents’ policies until age 26. Id. § 300gg-14(a). 10. Elimination of annual and lifetime limits. Insurers may no longer establish lifetime dollar limits on essential health benefits. Id. § 300gg11(a)(1)(A), (b). Insurers may retain annual dollar limits on essential health benefits until 2014.38 Id. § 300gg-11(a). 11. Limits on cost-sharing by insureds. “Cost-sharing”39 includes out-ofpocket “deductibles, coinsurance, copayments, or similar charges” and “qualified medical expenses.”40 Id. § 18022(c)(3)(A). Annual cost-sharing limits apply to group health plans, health plans sold in the individual market, and qualified health plans offered through an Exchange.41 Id. §§ 300gg-6(b) (effective Jan. 1, 2014), 18022(a), (c). 38 HHS shall determine what restricted annual limits are permitted on the dollar value of essential health benefits until 2014. 42 U.S.C. § 300gg-11(a)(1), (2). “Subsection (a) shall not be construed to prevent a group health plan or health insurance coverage from placing annual or lifetime per beneficiary limits on specific covered benefits that are not essential health benefits . . . .” Id. § 300gg-11(b). 39 “Cost-sharing” does not include “premiums, balance billing amounts for non-network providers, or spending for non-covered services.” 42 U.S.C. § 18022(c)(3)(B). 40 “Qualified medical expense” is defined in 26 U.S.C. § 223(d)(2). 41 Annual limits on cost-sharing are equal to the current limits on out-of-pocket spending for high-deductible health plans under the Internal Revenue Code (for 2011, $5,950 for self-only coverage and $11,900 for family coverage), adjusted after 2014 by a “premium adjustment percentage.” 42 U.S.C. §§ 300gg-6(b) (effective Jan. 1, 2014), 18022(c)(1); 26 U.S.C. § 223(c)(2)(A)(ii), (g); I.R.S. Pub. 969, at 3 (2010). 31 12. Deductibles. Deductibles for any plans offered in the small group market are capped at $2,000 for plans covering single individuals and $4,000 for any other plan, adjusted after 2014. Id. §§ 300gg-6(b) (effective Jan. 1, 2014), 18022(c)(2). The deductible limits do not apply to individual plans or large group plans. See id. 13. Medical loss ratio. Insurers must maintain certain ratios of premium revenue spent on the insureds’ medical care versus overhead expenses. Id. § 300gg-18(a), (b)(1). In the large group market, insurers must spend 85% of their premium revenue on patient care and no more than 15% on overhead. Id. § 300gg18(a), (b)(1)(A)(i). In the individual and small group markets, insurers must spend 80% of their revenue on patient care and no more than 20% on overhead. Id. § 300gg-18(a), (b)(1)(A)(ii). This medical-loss ratio requirement applies to all plans (including grandfathered plans). Id. § 300gg-18(a), (b)(1). Insurers must report to HHS their ratio of incurred claims to earned premiums. Id. § 300gg18(a). 14. Premium increases. HHS, along with all states, shall annually review “unreasonable” increases in premiums beginning in 2010. Id. § 300gg-94(a)(1). Issuers must justify any unreasonable premium increase. Id. § 300gg-94(a)(2). 15. Prohibition on coverage rescissions. Insurers may not rescind 32 coverage except for fraud or intentional misrepresentation of material fact. Id. § 300gg-12. 16. Single risk pool. Insurers must consider all individual-market enrollees in their health plans (except enrollees in grandfathered plans) to be members of a single risk pool (whether enrolled privately or through an Exchange). Id. § 18032(c)(1). Small group market enrollees must be considered in the same risk pool. Id. § 18032(c)(2). 17. Temporary high risk pool program. To cover many of the uninsured immediately, the Act directs HHS to establish a “temporary high risk health insurance pool program” to offer coverage to uninsured individuals with preexisting conditions until the prohibition on preexisting condition exclusions for adults becomes effective in 2014. Id. § 18001(a). The premiums for persons with a preexisting condition remain what a healthy person would pay. Id. §§ 18001(c)(2)(C), 300gg(a)(1). The Act allocates $5 billion to HHS to cover this high-risk pool. When this temporary program ends in 2014, such individuals will be transferred to coverage through an Exchange. Id. § 18001(a)–(d), (g). 18. State regulation maintained. States will license insurers and enforce both federal and state insurance laws. Id. § 18021(a)(1)(C). The Act provides for the continued operation of state regulatory authority, even with respect to 33 interstate “health care choice compacts,” which enable qualified health plans to be offered in more than one state.42 Id. § 18053(a). In addition to reforming health insurance products, the Act requires the creation of Exchanges where the uninsured can buy the new products. We examine this second component of the Act, also designed to make insurance more accessible and affordable and thus reduce the number of the uninsured. E. Health Benefit Exchanges 1. Establishment of State-Run Exchanges By January 1, 2014, all states must establish “American Health Benefit Exchanges” and “Small Business Health Options Program Exchanges,” which are insurance marketplaces where individuals, families, and small employers can shop for the Act’s new insurance products. Id. § 18031(b). Consumers can compare prices and buy coverage from one of the Exchange’s issuers. Id. § 18031(b), (c). Exchanges centralize information and facilitate the use of the Act’s significant federal tax credits and other subsidies to purchase health insurance. See 26 U.S.C. 42 Health care choice compacts allow qualified health plans to be offered in the individual markets of multiple states, yet such plans will “only be subject to the laws and regulations of the State in which the plan was written or issued.” 42 U.S.C. § 18053(a)(1)(A). The issuer of such qualified health plans offered through health care choice compacts “would continue to be subject to market conduct, unfair trade practices, network adequacy, and consumer protection standards . . . of the State in which the purchaser resides” and “would be required to be licensed in each State in which it offers the plan under the compact.” Id. § 18053(a)(1)(B)(i)–(ii). 34 § 36B; 42 U.S.C. §§ 18031, 18071, 18081–83. States may create and run the Exchanges through a governmental or nonprofit entity. 42 U.S.C. § 18031(d)(1). States may establish regional, interstate, or subsidiary Exchanges. Id. § 18031(f). The federal government will provide funding until January 1, 2015, to establish Exchanges. Id. § 18031(a). Insurers may offer their products inside or outside these Exchanges, or both. Id. § 18032(d). Importantly, the Exchanges draw upon the states’ significant experience regulating the health insurance industry. See id. § 18041. The Act allows states some flexibility in operations and enforcement, though states must either (1) directly adopt the federal requirements set forth by HHS, or (2) adopt state regulations that effectively implement the federal standards, as determined by HHS. Id. § 18041(b). In a subsection entitled, “No interference with State regulatory authority,” the Act provides that “[n]othing in this chapter shall be construed to preempt any State law that does not prevent the application of the provisions of this chapter.” Id. § 18041(d). 2. Qualified Individuals and Employers in the Exchanges The Act provides that “qualified individuals” and “qualified employers” may purchase insurance through the Exchanges. Id. § 18031(d)(2). Although 35 “qualified individuals” is broadly defined,43 “qualified employers” are initially limited to small employers, but in 2017, states may allow large employers to participate in their Exchanges. Id. § 18032(f)(2)(A), (B). Qualified employers can purchase group plans in or out of Exchanges. Id. § 18032(d)(1).