Archive for the ‘State Health Insurance’ Category.

Over the next two years, until full implementation of the provisions of the Patient Protection and Affordable Care Act in 2014, the greatest change in health insurance on a state-by-state basis will involve the establishment of insurance exchanges. A primary aspect of the Obama health care reform measure, the exchanges are intended to create a public marketplace where consumers who are not covered by job-related health benefits can purchase coverage at competitive rates.

The process of establishing these exchanges, however, is being hampered by uncertainties about the state-federal relationship that underpins the effort. The law allows for single states to design their own exchanges, to develop them in partnership with neighboring states, or to allow the federal government to take the lead in administering the exchange within the state’s borders.

The relationship between state and federal rights has long been fundamental to the American political debate. At the same time that many state budgets have been strained beyond the breaking point by the recession that began in 2009, the state governments are still loathe to relinquish their prerogatives to the national government, even in exchange for federal funds. This is a greater problem in the states of the south and west, where adherence to the concept of states rights is more dearly held.

For consumers in the coming two years, this likely presages a mishmash of confusing insurance regulations that will not only affect the quality of their health care, but the condition of their wallets. With the transition to the new health care legislation in full swing, it is now more important than ever to know what insurance laws apply in your state and never to make assumptions about insurance when moving from one state to another.

A further kink will be thrown into this already tangled mess if the Supreme Court rules against the provisions of the Affordable Care Act that would require all Americans to carry health coverage by 2014. The only given is that in coming months everything you thought you understood about insurance in your state is likely to change.

The 2010 Patient Protection and Affordable Care Act

The 2010 Patient Protection and Affordable Care Act is an extensive document that will, over the next two years, affect the manner in which individual health insurance is handled and priced in the U.S. and how key state programs are administered.

Health Care Exchanges

A key provision is the establishment of American Health Benefit Exchanges in each state, a process currently underway, but proceeding slowly. The Exchanges, which are to be fully implemented by 2014, will make premium and cost-sharing credits available to consumers who make 133-144% of the federal poverty level. Currently, for a family of three, that would be approximately $25,390.

Separate exchanges will be established to benefit small businesses who want to purchase insurance and make coverage available as a job benefit to employees.

Federal Poverty Level

The Federal Poverty Level was established as a measurement standard to aid government agencies in setting eligibility levels for assistance programs including Medicaid.

For a more complete breakdown of the federal poverty level, and specific levels for Alaska and Hawaii, see FamiliesUSA.org

Types of Insurance Exchanges to be Created

Under the provisions of the Affordable Care Act, each state has flexibility in contracting with health plans, but all plans must meet a set of minimum federal requirements for eligibility.

Exchanges that include all qualified health plans will be termed as “clearinghouse” exchanges, while those that include only selected plans or that give consumers an option to negotiate premium prices will be “active purchaser” exchanges.

Temporary High-Risk Pools

In 2010, as a temporary measure until health insurance exchanges are functioning in each state, the federal government, in conjunction with the states, created temporary high-risk insurance pools specifically for adults with pre-existing conditions who have been excluded from other forms of coverage either by direct denial of coverage or by virtue of coverage limits.

(It should be noted that under the provisions of the Affordable Care Act, no child, in any state, can be excluded from health care coverage due to a pre-existing condition, with the same protection to be extended to adults in 2014.)

Known as the “State Pre-Existing Condition Insurance Plan,” this temporary coverage is currently available in 34 states. Citizens and legal residents of the U.S. with a pre-existing condition who have not had health insurance for the previous six months may apply for coverage through these high-risk pools.

The Affordable Care Act allotted $5 billion for the administration of the temporary pools to be used for claims and administrative costs over and above premiums collected from participants. The temporary high risk pools will be in place until January 1, 2014 when the exchanges become fully operational.

National Health Insurance Requirement

A hotly debated aspect of the Affordable Care Act is the national requirement, set to take affect in 2014, for all citizens to carry health insurance. The U.S. Supreme Court will debate the constitutionality of that provision after hearing arguments in March 2012.

Federal Assistance Programs: Medicare and Medicaid

The primary social insurance program administered by the federal government in the U.S. is the Medicare program, which provides health insurance to citizens age 65 and over, those under 65 with permanent disabilities, or those who meet special criteria for specific conditions.

Medicare

Medicare is a complex system involving four parts:

• Part A – hospital insurance
• Part B – medical insurance
• Part C – Medicare Advantage
• Pard D – Prescription Drug Plans

The coverage is most often only a portion of an older person’s health insurance coverage, with supplemental or sanctioned Advantage plans addressing gaps in coverage.

Due to the aging of the American population, in particular the Baby Boomers, Medicare coverage is expected to encompass 79 million people over the next two decades.

Medicaid

Under 1965 amendments to the Social Security Act, medical assistance to qualifying low-income became available via the Medicaid program. (This is the same law that created Medicare.) Before the establishment of Medicaid, low-income health services were provided through a confusing welter of state and local initiatives, private charities, and public hospitals.

There are three basic types of health protection provided through Medicaid:

• Aid to families with children and to the disabled.
• Long-term care for the elderly and the disabled.
• Supplemental coverage for low-income Medicare beneficiaries for services not covered by that program.

Currently, Medicaid is the third largest provider of health insurance in the nation after employment-based medical coverage and Medicare. Medicaid is considered the largest of all the federal “safety net” programs, servicing some of the most vulnerable segments of our society.

Medicaid Eligibility

Eligibility for Medicaid assistance relies on a combination of factors, but is basically tied to income as a percentage of the current federal poverty level.

○      Beneficiaries must qualify as low income.

○      Income thresholds are determined by the states.

○      Beneficiaries are divided into categories, for instance pregnant women, or the disabled.

○      The availability of other assistance programs in the state is also considered.

Broad federal guidelines exist to guide states in determining which services will be covered by the program, as well as the amount of care (in terms of scope and duration), which can  be extended to specific categories of qualified recipients.

For more information, see the website Centers for Medicare & Medicaid Services at www.cms.gov.

Children’s Health Insurance Program (CHIP)

The State Children’s Health Insurance Program was implemented in 1997  to protect children who fall into the gap between private and public health insurance coverage. Federal funds were given to the states, who then devised their own means of implementing the assistance.

COBRA

Under the terms of the Consolidated Omnibus Budget Reconciliation Act of 1985 or COBRA, and similar laws at the state level (known as mini-COBRAs), when an employee loses his or her job, the employer must offer that employee and any qualified family members the chance to buy the insurance coverage that was a benefit of their job status. The law, in general, affects employer with group health plans who, in the past year paid 20 or more employees. Depending on the event leading to the COBRA qualification, the continuation may last for 18 to 36 months.

For more information see: http://www.dol.gov/dol/topic/health-plans/cobra.htm

Health Insurance Portability and Accountability Act of 1996

In 1996, Congress passed the Health Insurance Portability and Accountability ACT (HIPAA) establishing a national standard for the transfer of health-related data and it security. Privacy right are addressed in the same legislation.

For more information on HIPAA see: http://www.privacyrights.org/fs/fs8a-hipaa.htm

Directory of State Department of Insurance Sites