Opinion ID: 223249
Heading Depth: 3
Heading Rank: 4

Heading: Health Insurance Reforms

Text: To reduce the number of the uninsured, the Act heavily regulates private insurers and reforms their health insurance products. We list examples of the major reforms. 1. Guaranteed issue. Insurers must permit every employer or individual who applies in the individual or group markets to enroll. 42 U.S.C. § 300gg-1(a) (effective Jan. 1, 2014). However, insurers may restrict enrollment in coverage described [in subsection (a) ] to open or special enrollment periods. [34] Id. § 300gg-1(b)(1) (effective Jan. 1, 2014). 2. Guaranteed renewability. Insurers in the individual and group markets must renew or continue coverage at the individual or plan sponsor's option in the absence of certain exceptions, such as premium nonpayment, fraud, or the insurer's discontinuation of coverage in the relevant market. Id. § 300gg-2(b). 3. Waiting periods. Under group health plans, insurers may impose waiting periods of up to 90 days before a potential enrollee is eligible to be covered under the plan. Id. §§ 300gg-7 (effective Jan. 1, 2014), 300gg-3(b)(4). The Act places no limits on insurers' waiting periods for applications in the individual market. 4. Elimination of preexisting conditions limitations. Insurers may no longer deny or limit coverage due to an individual's preexisting medical conditions. The Act prohibits preexisting condition exclusions for children under 19 within six months of the Act's enactment, and eliminates preexisting condition exclusions for adults beginning in 2014. [35] Id. § 300gg-3. 5. Prohibition on health status eligibility rules. Insurers may not establish eligibility rules based on any of the health status-related factors listed in the Act. [36] 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). 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. § 300gg-11(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-of-pocket 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). 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. § 300gg-18(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. § 300gg-18(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 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 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.