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Summary of Health Reform Coverage Provisions

On March 23, President Obama signed the Patient Protection and Affordable Care Act passed by the Senate on December 24, 2009 and by the House of Representatives on March 21, 2010. The House of Representatives also passed the Health Care and Education Reconciliation Act of 2010, which made changes to the Patient Protection and Affordable Care Act and has been sent to the Senate for consideration. References to the legislation here include both the health reform law and the changes made by the House of Representatives that are being considered in the Senate. The following summary explains key health coverage provisions of the legislation.

The legislation passed by the House of Representatives will do the following:

  • Most individuals will be required to have health insurance beginning in 2014.
  • Individuals who do not have access to affordable employer coverage will be able to purchase coverage through a health insurance exchange with premium and cost-sharing credits available to some people to make coverage more affordable. Small businesses will be able to purchase coverage through a separate exchange.
  • Employers will be required to pay penalties for employees who receive tax credits for health insurance through the exchange, with exceptions for small employers.
  • New regulations will be imposed on all health plans that will prevent health insurers from denying coverage to people for any reason, including health status, and from charging higher premiums based on health status and gender.
  • Medicaid will be expanded to 133 percent of the federal poverty level ($14,404 for an individual and $29,327 for a family of four in 2009) for all individuals under age 65.
  • The Congressional Budget Office estimates that the legislation will reduce the number of uninsured by 32 million in 2019 at a net cost of $938 over ten years, while reducing the deficit by $124 billion during this time period.

Individual mandate

All individuals will be required to have health insurance, with some exceptions, beginning in 2014. Those who do not have coverage will be required to pay a yearly financial penalty of the greater of $695 per person (up to a maximum of $2,085 per family), or 2.5 percent of household income, which will be phased-in from 2014-2016.

Exceptions will be given for financial hardship and religious objections; and to American Indians; people who have been uninsured for less than three months; those for whom the lowest cost health plan exceeds 8 percent of income; and if the individual has income below the tax filing threshold ($9,350 for an individual and $18,700 for a married couple in 2009).

Expansion of public programs

Medicaid will be expanded to all individuals under age 65 with incomes up to 133percent of the federal poverty level ($14,404 for an individual and $29,327 for a family of four in 2009) based on modified adjusted gross income. This expansion will create a uniform minimum Medicaid eligibility threshold across states and will eliminate a limitation of the program that prohibits most adults without dependent children from enrolling in the program today (though as under current law, undocumented immigrants will not be eligible for Medicaid). Eligibility for

Medicaid and the Children’s Health Insurance Program (CHIP) for children will continue at their current eligibility levels until 2019. People with incomes above 133 percent of the poverty level who do not have access to employer-sponsored insurance will obtain coverage through the newly created state health insurance exchanges.

  • The federal government will provide 100 percent federal funding for the costs of those who become newly eligible for Medicaid for years 2014 through 2016, 95 percent federal funding for 2017, 94 percent federal funding for 2018, 93 percent federal funding for 2019, and 90 percent federal funding for 2020 and subsequent years.
  • States that have already expanded adult eligibility to 100 percent of the poverty level will receive a phased-in increase in the FMAP for non-pregnant childless adults.
  • Medicaid payments to primary care doctors for primary care services will be increased to 100 percent of Medicare payment rates in 2013 and 2014 with 100 percent federal financing.

American health benefit exchanges

States will create American Health Benefit Exchanges where individuals can purchase insurance and separate exchanges for small employers to purchase insurance. These new marketplaces will provide consumers with information to enable them to choose among plans. Premium and cost-sharing subsidies will be available to make coverage more affordable.

  • Access to exchanges will be limited to U.S. citizens and legal immigrants. Small businesses with up to 100 employees can purchase coverage through the exchange.
  • Although there will not be a public plan option in the exchanges, the Office of Personnel Management, which administers the Federal Employees Health Benefit Program, will contract with private insurers to offer at least two multi-state plans in each exchange, including at least one offered by a non-profit entity. In addition, funds will be made available to establish non-profit, member-run health insurance CO-OPs in each state.
  • Plans in the exchanges will be required to offer benefits that meet a minimum set of standards. Insurers will offer four levels of coverage that vary based on premiums, out-of-pocket costs, and benefits beyond the minimum required plus a catastrophic coverage plan.
  • Premium subsidies will be provided to families with incomes between 133 percent and 400 percent of the poverty level ($29,327 to $88,200 for a family of four in 2009) to help them purchase insurance through the exchanges. These subsidies will be offered on a sliding scale basis and will limit the cost of the premium to between 2 percent of income for those up to 133 percent of the poverty level and 9.5  percent of income for those between 300 percent and 400 percent of the poverty level.
  • Cost-sharing subsidies will also be available to people with incomes between 133 percent and 400 percent of the poverty level to limit out-of-pocket spending.

Changes to private insurance

New insurance market regulations will prevent health insurers from denying coverage to people for any reason, including their health status, and from charging people more based on their health status and gender. These new rules will also require that all new health plans provide comprehensive coverage that includes at least a minimum set of services, caps annual out-of-pocket spending, does not impose cost-sharing for preventive services, and does not impose annual or lifetime limits on coverage.

  • Health plan premiums will be allowed to vary based on age (by a 3 to 1 ratio), geographic area, tobacco use (by a 1.5 to 1 ratio), and the number of family members.
  • Health insurers will be prohibited from imposing lifetime limits on coverage and will be prohibited from rescinding coverage, except in cases of fraud.
  • Increases in health plan premiums will be subject to review.
  • Young adults will be allowed to remain on their parent’s health insurance up to age 26.
  • States will be allowed to form health care choice compacts that enable insurers to sell policies in any state that participates in the compact.
  • Waiting periods for coverage will be limited to 90 days.
  • Existing individual and employer-sponsored insurance plans will be allowed to remain essentially the same, except that they will be required to extend dependent coverage to age 26, eliminate annual and lifetime limits on coverage, prohibit rescissions of coverage, and eliminate waiting periods for coverage of greater than 90 days.

Employer requirements

There is no employer mandate, but employers with more than 50 employees will be assessed a fee of $2,000 per full-time employee (in excess of 30 employees) if they do not offer coverage and if they have at least one employee who receives a premium credit through an exchange. Employers that do offer coverage but have at least one employee who receives a premium credit through an exchange are required to pay the lesser of $3,000 for each employee who receives a premium credit or $2,000 for each full-time employee.

  • Employers that offer coverage will be required to provide a voucher to employees with incomes below 400 percent of the poverty level if their share of the premium cost is between 8 percent and 9.8 percent of income to enable them to enroll in the exchange. Employers that offer a free choice voucher will not be subject to the above penalty.
  • Large employers that offer coverage will be required to automatically enroll employees into the employer’s lowest cost premium plan if the employee does not sign up for employer coverage or does not opt out of coverage.
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Steps You Can Take Ahead of Changes in Coverage, Taxes

By ANNA WILDE MATHEWS

After years of debate, a health overhaul is finally becoming a reality. Now what?

Many big provisions don’t kick in until 2014, including the mandate for most folks to have health insurance and many new requirements for health-plan designs. Before then, you’ll see a mishmash of other things go into effect at various times—and of course some of the changes depend on the Senate passing the House’s so-called sidecar, or reconciliation, bill of changes.

Here are some ways you can start dealing with the new health-care landscape.

Do your homework. This legislation will almost certainly affect your wallet and your health coverage, so you need to understand it. The Kaiser Family Foundation’s site, kff.org, has a side-by-side bill comparison tool featured on the main page, and you can choose the Senate and reconciliation bills, selecting only the parts you care about.

Much of the bill will be implemented only once federal regulators write rules. One place to look for tools and information in coming months will be the Department of Health and Human Services’ Web site, hhs.gov, along with associated sites like healthreform.gov and medicare.gov.

Watch for coverage changes. If you’re uninsured and have health problems, you may become eligible for a special new federal high-risk insurance pool this year. This is likely to be a good deal, so don’t miss out: Watch for more information on hhs.gov and associated sites.

If you have coverage, insurance that was in effect before the bill becomes law is grandfathered in. Still, some provisions in the sidecar bill, like bans on lifetime benefit caps, would apply even to those plans.

That would solve a big problem for people such as Amy Wilhite of Marblehead, Ohio. Her family is insured through her husband’s employer, but her 12-year-old daughter, Taylor, a leukemia survivor, has already gone through more than $1 million of medical care in her life and is approaching a $1.5 million cap. Taylor has been delaying or forgoing some care to stretch out coverage as long as possible.

“We shouldn’t have to pick and choose what we want to do,” Ms. Wilhite said.

This change, as well as rules against insurers’ yanking policies if you get sick, and forcing family policies to generally include kids up to age 26, takes effect six months after the bill becomes law.

Find a doctor. There could be shortages. Including the reconciliation package, the bill is ultimately expected to add around 32 million people to the insured population, with the big influx starting in 2014. Provisions aimed at boosting the supply of primary-care physicians likely won’t kick in fast enough to keep up with the flood of new patients, at least in certain parts of the country. Make sure you are on a doctor’s dance card before he or she stops taking new patients.

Consider long-term-care coverage. One of the underlying bill’s biggest and least-understood provisions is a new voluntary long-term care benefit that would pay cash to people who become disabled. You get the benefit only if you pay premiums into the program for at least five years. You will likely not be able to opt to do this until 2011 at the earliest, but start factoring it into your planning now and watch for information on the hhs.gov sites. Insurers will likely develop supplemental products for the benefit, which isn’t expected to cover round-the-clock care, says John Rother, executive vice president of AARP, the big seniors group.

Plan for new tax rules. One of the earliest is a new 10% levy on indoor tanning services, starting in July, under the sidecar package. For those making more than $200,000, or $250,000 for a couple, the Senate bill means a boost in the Medicare payroll tax beginning in 2013. That same year, the reconciliation bill adds a tax of 3.8% on unearned income, which includes interest and dividends, above those same thresholds.

Also, the sidecar package caps the amount you can put in a tax-free flexible spending account at $2,500 a year in 2013 (it’s 2011 in the original Senate bill). There is currently no legal cap on the amount that people can put in their flexible spending accounts, although many employers impose their own limits.

Prepare for Medicare changes. If you are a beneficiary, the bill has sweeteners for your budget. Under the sidecar package, those who pay for drugs in the doughnut-hole coverage gap are eligible for a $250 rebate in 2010.

In 2011, that group gets a 50% discount on brand-name drugs, and after that the hole will get a little smaller each year, until in 2020 it’s effectively zeroed out. Starting next year, certain preventive care is free.

Retiree Daniel O’Connell of Greenville, S.C., said closing the doughnut hole was “very beneficial to me.” Mr. O’Connell—who lives on a fixed income of about $40,000 a year—hit the coverage gap in August last year, and said he incurred about $1,500 in out-of-pocket costs.

“At a certain point you’re not covered, even though you’re paying the premium,” he said.

Brace for 2014. If you are uninsured, know that starting in 2014, you will likely be required to have insurance or pay a penalty—and you should start planning now for the cost, though many details aren’t yet clear. Medicaid will expand to include more of those with the lowest incomes. For those who make less than around $43,000, or about $88,000 for a family of four, there will be government help to buy a plan. The kff.org site has a calculator that estimates what you might pay. The bill summary on the same site spells out penalties under the sidecar package, which start out at $95 or 1% of income, whichever is greater.

In 2014, insurance will have to meet new requirements that will result in plans that are richer than many available today, particularly in the individual market. These include caps on out-of-pocket costs. If you’re buying a new plan for yourself, these nice extras may come with a cost: higher premiums.

—Amy Dockser Marcus and Louise Radnofsky contributed to this article.

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Health CEOs: Rates Are Driven By Costs

WASHINGTON—Health insurance premiums are produced by healthcare costs, and those costs must be tackled before rates can be brought under control, health care industry CEOs said today.

They made their point at a White House meeting attended by President Obama, other administration officials and state insurance regulators at the White House.

The executives were responding to a request at the meeting by Kathleen Sebelius, secretary of the Department of Health and Human Services, to post on the Internet the justification for their requests for large rate hikes.

WellPoint Inc., Indianapolis, has been under particular scrutiny after its Anthem Blue Cross subsidiary in California recently announced plans to boost individual insurance premiums in California by as much as 39%.

These requests for high increases are aimed primarily at the small group and individual markets.

In comments made at the meetings and afterwards, the CEOs also cautioned that restraining the cost of health insurance premiums without working to control costs would affect the solvency of the companies.

Angela Braly, chairman, president and CEO of WellPoint, said during the conference call that she had told Obama “that the administration must understand that rates can’t be looked at independently from what the drivers of increases in healthcare costs are.”

“You can’t limit rate increase and not look at underlying costs,” she said. “If you don’t have the right rates, they you will also have problem with the solvency of health insurers” not only now, “but in the future.”

Braly and Stephen Hemsley, president and CEO of UnitedHealth Group Inc., Minnetonka, Minn., argued that these costs are largely created by hospitals, the pharmaceutical industry and the medical device industry, all of which have higher profit margins than the 2.2% profit earned by health insurers last year.

“We think we got those attending the meeting to acknowledge that fact,” Helmsley said in a conference call following the meeting.

Officials from Aetna Inc., Hartford, and CIGNA Corp, Philadelphia, were also at the meeting.

In a letter sent to Sebelius Wednesday, Karen Ignagni, president and CEO of America’s Health Insurance Plans, cited a recent Yahoo! Finance analysis of quarterly financial data, which found the average profit margin in the health insurance industry is 3.4%, in contrast to 11% for the entire health care sector.

At the meeting, Sebelius told the executives “that kind of rate increase is just unacceptable and unsustainable.”

She said the industry is earning “healthy profits,” a point the industry executives disputed.

During a short stay at the meeting, Obama underscored that such rate hikes can’t go on. The president has painted a bleak picture of spiraling costs and eroding coverage if Congress fails to pass his plan.

In their comments during the conference call, Bray and Helmsley took note of the proposed Federal Rate Review Board that the administration wants to set up, which would have the authority to roll back high rate increases.

“Healthcare is very local,” Helmsley said. State regulators are in the best position to “strike the appropriate balance between solvency and actuarially sound rates,” he said.

He added that state regulators are in a better position than government to focus on consumer protection.

But state regulators attending the meeting supported the idea of a Federal Rate Review Board, which they said would aim only at providing authority to state regulators who don’t have a legal mandate to reduce high rate increases.

“State regulators are best positioned to perform rate review and many of us do so with great success,” said Jane L. Cline, NAIC president and West Virginia Insurance Commissioner. “Some, however, have not been given the authority by their state legislatures to review and deny unjustified increases. We believe that a federal backstop could help encourage these legislatures to provide that authority.”

WASHINGTON—Health insurance premiums are produced by healthcare costs, and those costs must be tackled before rates can be brought under control, health care industry CEOs said today.

They made their point at a White House meeting attended by President Obama, other administration officials and state insurance regulators at the White House.

The executives were responding to a request at the meeting by Kathleen Sebelius, secretary of the Department of Health and Human Services, to post on the Internet the justification for their requests for large rate hikes.

WellPoint Inc., Indianapolis, has been under particular scrutiny after its Anthem Blue Cross subsidiary in California recently announced plans to boost individual insurance premiums in California by as much as 39%.

These requests for high increases are aimed primarily at the small group and individual markets.

In comments made at the meetings and afterwards, the CEOs also cautioned that restraining the cost of health insurance premiums without working to control costs would affect the solvency of the companies.

Angela Braly, chairman, president and CEO of WellPoint, said during the conference call that she had told Obama “that the administration must understand that rates can’t be looked at independently from what the drivers of increases in healthcare costs are.”

“You can’t limit rate increase and not look at underlying costs,” she said. “If you don’t have the right rates, they you will also have problem with the solvency of health insurers” not only now, “but in the future.”

Braly and Stephen Hemsley, president and CEO of UnitedHealth Group Inc., Minnetonka, Minn., argued that these costs are largely created by hospitals, the pharmaceutical industry and the medical device industry, all of which have higher profit margins than the 2.2% profit earned by health insurers last year.

“We think we got those attending the meeting to acknowledge that fact,” Helmsley said in a conference call following the meeting.

Officials from Aetna Inc., Hartford, and CIGNA Corp, Philadelphia, were also at the meeting.

In a letter sent to Sebelius Wednesday, Karen Ignagni, president and CEO of America’s Health Insurance Plans, cited a recent Yahoo! Finance analysis of quarterly financial data, which found the average profit margin in the health insurance industry is 3.4%, in contrast to 11% for the entire health care sector.

At the meeting, Sebelius told the executives “that kind of rate increase is just unacceptable and unsustainable.”

She said the industry is earning “healthy profits,” a point the industry executives disputed.

During a short stay at the meeting, Obama underscored that such rate hikes can’t go on. The president has painted a bleak picture of spiraling costs and eroding coverage if Congress fails to pass his plan.

In their comments during the conference call, Bray and Helmsley took note of the proposed Federal Rate Review Board that the administration wants to set up, which would have the authority to roll back high rate increases.

“Healthcare is very local,” Helmsley said. State regulators are in the best position to “strike the appropriate balance between solvency and actuarially sound rates,” he said.

He added that state regulators are in a better position than government to focus on consumer protection.

But state regulators attending the meeting supported the idea of a Federal Rate Review Board, which they said would aim only at providing authority to state regulators who don’t have a legal mandate to reduce high rate increases.

“State regulators are best positioned to perform rate review and many of us do so with great success,” said Jane L. Cline, NAIC president and West Virginia Insurance Commissioner. “Some, however, have not been given the authority by their state legislatures to review and deny unjustified increases. We believe that a federal backstop could help encourage these legislatures to provide that authority.”

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COBRA Extension in the Works

Virtual Water Cooler, February 10, 2010

Bill Kenealy

Another extension to subsidies to the Consolidated Omnibus Budget Reconciliation Act (COBRA) is contained a pending jobs bill.

According to the version of the bill currently circulating around Capitol Hill, the 65% premium subsidy available to employees involuntarily terminated from Sept. 1, 2008 through Feb. 28, 2010, would be extended until May 31, 2010. However, the duration laid off workers are eligible to receive benefits remains at 15 months.

Given the nation’s continuing high unemployment rate another COBRA subsidy extension is likely to receive broad support in Congress, and key lawmakers such as Senate Majority Leader Harry Reid, (D-Nev.) and Finance Committee Chairman Max Baucus (D-Mont.) are said to be backing an extension.

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If Healthcare Dies, Obama’s Modest Budget Plan B

Associated Press –

Feb. 2: Washington – President Barack Obama’s modest health care budget may be a harbinger of what’s ahead if his overhaul plan dies in Congress. The budget released Monday contains lots of respectable ideas to squeeze savings, expand coverage and improve quality, but no ambitious change that launches the nation on a path to health care for all.

“It doesn’t change dramatically the cost trajectory or fill the coverage gap,” said Health and Human Services Secretary Kathleen Sebelius. With costs widely acknowledged to be growing at budget-busting rates, the $915 billion health spending plan for 2011 would hire more fraud detectives to root out waste and outright thievery in Medicare and Medicaid, the two giant insurance programs for seniors and the poor. The budget would increase spending in one major anti-fraud area by 80 percent, part of a strategy the administration estimates could save taxpayers about $10 billion over 10 years.

As unemployment remains high and people continue to lose jobs with health insurance, the budget provides an emergency infusion of $25.5 billion to help state Medicaid programs cope with swelling enrollment in a period of slack revenues. It would also pump another $290 million to community health centers, frontline medical providers for many of the nearly 50 million uninsured.

As for quality improvements, the budget would start a host of experiments on how to improve care for seniors with multiple chronic health problems, who account for a disproportionate share of what Medicare spends annually. It also would provide a funding boost for a new field of research that aims to determine which medical treatments are most effective for the costliest conditions. Speeding the adoption of computerized medical records is another priority. All in all, Sebelius called the budget “a platform” a beginning, not an end.

She said she hopes lawmakers will revive the health care bills sidelined after Democrats lost their 60-seat majority in the Senate, and undisputed control of the congressional agenda. “I think we need both,” she said.

The health care overhaul legislation would provide coverage to more than 30 million now uninsured. It wouldn’t add to the federal deficit, but it would increase health care spending as people used their new coverage. However, in the long run, some of the cost control measures would slow the pace of annual increases, offering the promise of savings.

As a technical matter an asterisk Obama’s budget assumes the health care remake will pass Congress, generating $150 billion in savings over 10 years.

Most of the government’s health care spending in any given year nearly $832 billion of the total for 2011 is on autopilot, allocated to Medicare and Medicaid. Congressional Democrats tapped Medicare to finance much of their proposed overhaul legislation, and the deficit-reduction commission Obama is promising in his budget is sure to see it as a source for revenue.

Beyond the big areas of costs and coverage, Obama’s budget provides targeted increases for research, public health and prevention. The National Institutes of Health would get an additional $1 billion for research into such fields as genetic medicine that could produce breakthrough drugs and treatments.

Administration priorities include cancer and autism research. The Food and Drug Administration’s budget for food safety cut under President George W. Bush gets a 30 percent, $327 million boost.

And revenues from a tobacco tax hike that Obama signed into law last year will be pumped into a campaign to prevent teens from taking up the habit.

Finally, there’s also a $383-million health care hit in the budget. Obama is proposing to eliminate congressional earmarks for building hospitals and other facilities, including $10 million for Alaska and $35 million for Mississippi.

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Poll Shows Growing Fears on Healthcare Overhaul

Associated Press –

Jan. 25: Washington – Fears about President Barack Obama’s health care overhaul increased significantly in December, according to a new poll released as the legislation’s future hangs in doubt. The monthly poll out Monday from the nonpartisan Robert Wood Johnson Foundation measured consumers’ views of how a remake would affect their own finances and access to care, among other things.

It was conducted between Nov. 28 and Dec. 20, in the run-up to the Senate’s Christmas Eve passage of sweeping health care legislation that brought Congress closer than ever before to enacting a comprehensive revamp of the nation’s medical system. That effort was cast into turmoil last week when a GOP victory in Massachusetts’ special Senate election robbed Democrats of their filibuster-proof supermajority.

The survey shows a majority are following the health care debate in Congress and their trepidation is evidently growing as they do.

Nonetheless, people still think that Obama should address the issue as part of dealing with the nation’s economic slump, although the percentage of people who say that it’s very important for Obama to do so has slipped from 56 percent in the survey conducted in September, to 49.5 percent in this month’s report.

Among the poll’s other findings:
– 33 percent of respondents said they believed their access to care would be worse if a health care overhaul occurred, a jump from 25 percent in the poll released last month. Thirteen percent said they thought they would have better access to care in a remade system, about the same as last month.
– 30.5 percent said their personal finances would be worse under a health care overhaul, compared to 24.5 percent last month. Eleven and a half percent said their personal finances would improve, compared to 14 percent last month.
– 35 percent said the country’s access to health care would be worse under a health care overhaul, compared to 30 percent last month. Around 38 percent said it would be better, around the same as last month.
– 42 percent said the country’s finances would suffer under a health care overhaul, compared with 34.6 percent last month. Thirty percent said matters would improve financially, compared to 32 percent last month.

“I don’t know that it’s all that surprising that people are nervous about health care reform,” said Brian Quinn, a researcher at the Robert Wood Johnson Foundation, a philanthropic organization that supports health care reform. “Health care is an incredibly personal issue and clearly there’s a lack of understanding about what health care reform would do.”

The Democratic bills would require all Americans to carry health insurance, with government help to make premiums more affordable. They would ban insurance companies from denying coverage or charging more to people with health problems.
They would set up new insurance markets for those who now have the hardest time finding and keeping coverage — self-employed people and small businesses.

The poll, a monthly status check on views about health care, also found that consumers’ confidence in their health insurance coverage and ability to access care rose slightly in December.

Robert Wood Johnson’s index of consumer health care confidence stood at 99.1 points in December, up from a reading of 96.9 in November. The index uses people’s responses to a series of questions, such as whether they’re worried about affording prescription drugs or going bankrupt from medical bills, to determine an overall confidence score.

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How Would a New Health Insurance Pool Work?

Los Angeles Times –

Jan. 11: I hear the healthcare bill will create an immediate insurance pool for people who can’t get insurance. How will this work and who will be eligible?

Both the House and Senate bills would provide $5 billion to create a temporary insurance pool until an insurance exchange is up and running. Under the House bill, this program would be available to people who have a preexisting condition or have been uninsured for at least six months. Under the Senate bill, individuals would have to meet both requirements to be eligible. The House pool would open immediately and the Senate pool would open within 90 days of the bill’s enactment. Both pools would set limits on the premiums and cost-sharing that individuals would have to pay.

How will an insurance exchange work?

An insurance exchange is a marketplace a website, for example where consumers can choose from a range of plans that meet minimum standards set by the government. The Senate bill proposes to create state-based exchanges, while the House bill would create one national exchange. Consumers who don’t get health insurance through their employer or a government insurance program would be eligible to shop on the exchange for plans. Low- and middle-income people who shop on the exchange would be eligible for government subsidies to help them buy their insurance plan.

What is the difference between a bronze plan and a platinum plan?

Both the House and Senate bills would create categories of benefit packages that could be offered on the exchange. Under the Senate bill, there are four categories: bronze, silver, gold and platinum. Under the House version, there are three categories: basic, enhanced and premium. The bronze and basic plans would offer the lowest premiums and restricted benefits, while the platinum and premium plans would be more expensive but would cover more, as well as offer such extras as dental and vision coverage.

I’m young and rarely go to the doctor. What are my options if I don’t think I need a bronze or basic plan?

The Senate bill creates an additional category called a catastrophic plan, which would be available to people age 30 and younger. The plan would likely have lower monthly costs and would cover up to three visits to a primary-care doctor.

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An Overview of the COBRA Extension

Secova Inc. released the following summary of the new law extending eligibility for the COBRA Premium Subsidy:

1. People who were laid off before December 31, 2009 are eligible for ARRA premium reduction for an additional two months (through February 28, 2010) if they elect COBRA.
2. The COBRA premium subsidy is available for an additional six months for a total of 15 months. Employees and employers should not confuse the COBRA premium subsidy with the length of COBRA coverage itself.
3. Retroactive payments are allowed for reinstatement in some cases. Those who failed to pay their COBRA premiums once their initial subsidy period expired can pay the premiums retroactively to maintain COBRA at subsidized rates for an additional six months (not to exceed 15 months).
4. The new law requires notices to the following people:
(a) People who are eligible for the subsidy extension or have experienced a qualifying event on or after October 31, 2009.
(b) People who are eligible to make premium payments retroactive because they let their COBRA coverage expire once their subsidy period ended.
(c) People who are entitled to a reimbursement or credit because they were eligible for additional assistance, but paid the full amount of the premium coverage.

The extension of the COBRA premium subsidy gives very little time to implement new administrative procedures and meet the new notice requirements. The Departments of Labor, Treasury, and Health and Human Services are continually releasing clarifications

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MetLife Study Reveals Employers of All Sizes Closely Following Health Care Reform While Consumers’ Attention is Split along Generational Lines

NEW YORK–(BUSINESS WIRE)–Health care legislation continues to be a very hot topic among Americans today. According to new research from MetLife, 75% of individuals and 83% of employers report paying close attention to health care legislation developments. Regardless of company size or whether or not they currently offer medical benefits, eight-in-ten employers say they are on top of the legislation. However, interest is very different among generations as 83% of Baby Boomers and 74% of Generation Y individuals say they are closely following reform developments, compared to 63% of Generation X.

“We have seen a great appetite for information on health care reform”

.As for where they obtain information about health care reform legislation, consumers and businesses alike turn to traditional media outlets. More than eight-in-ten (85%) individuals and 56% of employers cite traditional media outlets (TV, radio, newspapers and magazines) as preferred sources. However, more than half (57%) of larger employers (500 or more employees) are also turning to their benefits brokers or consultants for information, more so than to business media (42%), general audience media (37%) or industry publications (32%).

“We have seen a great appetite for information on health care reform,” said Ronald Leopold, MD and vice president, U.S. Business, MetLife. “Our study also reveals a tremendous opportunity for insurance brokers and benefits consultants to help better educate their clients. In turn, well-informed employers will be better positioned to share with their employees the implications of health care reform on their personal situations.”

Current Satisfaction Impacts Attitudes Toward Health Care Reform

Not surprisingly, levels of satisfaction with current medical benefits impact Americans’ attitudes toward health care reform. More than six-in-ten (62%) Americans without any medical insurance feel that health care reform will be “good for America,” contrasted with 42% of those with medical insurance. 65% of Generation Y individuals believe that health care reform will impact them favorably, but only 44% are satisfied with their current medical insurance. On the other hand, while only 34% of Boomers believe that health care reform will have a positive impact on them personally, 63% also say they are satisfied with their current medical coverage.

Attitudes toward health care reform also correspond to health status. According to the MetLife study, 65% of consumers who assess their health as fair or poor say that health care reform will have a positive impact on them and their families, contrasted to 28% for those who say their health is very good or excellent.

Employers’ Next Steps

Three-quarters of employers strongly agree that employees consider health insurance a critical component of a compensation package. Virtually all (96%) also say promoting a culture of health and wellness for employees is important. However, many of today’s employers (41%) aren’t sure what they will do regarding medical benefits should legislation pass. Thirty percent of those that do offer medical coverage expect their health benefits to remain unchanged, while 39% of those employers who do not currently offer medical coverage are not anticipating offering that benefit.

While 36% of employers are unsure about what they will do regarding non-medical benefits like life insurance, disability income protection, and dental benefits should legislation pass, 44% of those that offer these benefits anticipate that they will make no changes to them. Only 5% of employers who offer these benefits say they would consider reducing them.

“Effective communications for diverse audiences is a critical component for the success of health care reform. While there is understandably a reason for a ‘wait and see’ approach by employers as the legislation is debated, communicating to employees that their current benefits are not changing in the short-term can be surprisingly reassuring,” continued Dr. Leopold.

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Individual Premiums to Increase; No Rate Relief for Small Group Under Senate Bill

BestWire Services –

Dec. 1: A new analysis from the Congressional Budget Office demonstrates that most nonelderly people who would be insured under the current U.S. Senate health reform bill would pay about the same or less in premiums by 2016, if government subsidies for lower-income people are factored in.

The vast majority of the insured 70% would still be in large group plans, the report said. Premium changes among that group would range anywhere from zero change to 3% less, according to the findings of the nonpartisan congressional spending experts.

The insurance industry pointed out that the report demonstrates “the current health care reform proposal fails to bend the health care cost curve,” according to a response from America’s Health Insurance Plans. The industry association focused on those with nongroup policies, who would end up paying more in 2016 — “double-digit premium increases for millions of Americans.”

AHIP argued that the bill encourages people to delay purchasing coverage until they are sick, and the organization also said the CBO report ignored regional variations in premiums.

The next largest segment 17% would be the nongroup insured, where more than half would have their insurance costs subsidized by federal government help.

Those receiving subsidies would pay 56% to 59% less than they would if the system continues as it is now. But the remainder amounting to about 7% of the total nonelderly insured, or 13.8 million would pay from 10% to 13% more than they would without the bill.

The last segment is the small group, representing about 13% of the market.

Their premium difference would be close to zero — except for the 12% who would receive subsidies, bringing their costs down by as much as a tenth.

Besides the 7% potentially seeing significant premium increases, the other negatively affected group are those who currently receive higher-cost plans, also known as “Cadillac plans” in the ongoing health care debate in Congress.

Those premium plans held by about one in five people would be subject to a new excise tax to help pay for the overall health reforms. The report surmises that “most people would avoid the cost of the excise tax by enrolling in plans that had lower premiums.” But those plans would come with reduced coverage.

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