Advocacy for Patients Comments on Regulations
Implementing New Rules Regarding Health Insurance Appeals
As you know, Advocacy for Patients files hundreds of insurance appeals all over the country each year. This makes us one of the few organizations that has had the real world experience of filing insurance appeals in many different States and self-funded plans. Drawing on this experience, Advocacy for Patients has responded to a request for comments from the federal agencies charged with enforcing the new law. You can read the comments here. And if you wish to submit your own comments, you have until September 21, 2010 to do so.
Six Month Anniversary of Reform:
Changes Take Effect
September 23, 2010 marks the six-month anniversary of the signing of the reform law. Several of the law's provisions will kick in on that date or shortly thereafter.
First, two caveats. The effective date of these changes varies with your plan. For example, if you are in a group plan that works on a calendar year basis beginning on January 1, then these changes take effect for you on January 1, 2011 -- the beginning of the next plan year after September 23, 2010. If you are in an individual plan that renews on March 1, then the changes take effect for you on March 1, 2011 -- the beginning of the next plan year after September 23, 2010.
Second, some provisions do NOT apply to "grandfathered' plans. As you will recall, President Obama promised that if you are happy with the plan you have, you can keep it. Well, this is how he kept that promise. If you have a plan that existed on March 23, 2010 and does not change in any substantial way (keep reading), it is a grandfathered plan. A plan loses its grandfathered status if it changes in one of the following ways:
increased copayment of more than $5 or above medical inflation plus 15 percentage points;
increased deductible above medical inflation plus 15 percentage points; increased out-of-pocket limit above medical inflation plus 15 percentage points;
an increase in coinsurance rates;
a decrease in the annual limit or adoption of a new annual limit after March 23, 2010;
a decrease of more than 5 percentage point below the existing employer contribution rate as of March 23, 2010; or
the elimination of all or substantially all covered benefits to diagnose or treat a particular condition after March 23, 2010.
Any new plan is NOT a grandfathered plan, so if your employer switches to a different insurance company, or if you buy a new individual policy after March 23, 2010, that plan is NOT grandfathered.
As I go through each of the changes that takes effect on September 23, 2010 or the beginning of the next plan year after that date, I will indicate which ones apply to grandfathered plans and which do not.
Young adults can stay on their parents' health plans to age 26. This DOES apply to grandfathered plans, but if the young adult become eligible for group insurance through a job, he or she becomes ineligible to stay on his or her parents' plan.
There are no more pre-existing condition exclusions for children under 19 years of age. This DOES apply to grandfathered group plans, but it does NOT apply to grandfathered individual plans.
Preventive services are covered for free. There are no copays or coinsurance for preventive services. I talked about this provision in last month's newsletter. This only works if your doctor bills the preventive care under a separate code or if you go to the doctor visit only for preventive care. This does NOT apply to grandfathered plans.
Annual limits are only allowed if they are reasonable. Reasonable annual limits are: $750,000 for the plan year beginning on or after September 23, 2010 but before September 23, 2011; $1.25 million for the plan year beginning on or after September 23, 2011 but before September 23, 2012; and $2 million for the plan year beginning on or after September 23, 2012 but before January 1, 2014, at which point annual limits will not be allowed at all. This DOES apply to grandfathered group plans but does NOT apply to grandfathered individual plans.
Lifetime limits are not allowed -- period. This DOES apply to all grandfathered plans.
Health plans are not allowed to rescind (essentially, cancel) your insurance retroactively because you got sick, unless you committed fraud on your application. This DOES apply to all grandfathered plans.
Women have direct access to ob/gyns without a referral; pediatricians can be classified as primary care providers; enrollees have a choice of primary care provider. This does NOT apply to grandfathered plans.
No prior authorization requirement for emergency care, and no higher cost-sharing for out-of-network emergency care. This does NOT apply to grandfathered plans. It's also somewhat illusory; you can be balance billed by an out-of-network emergency room/doctor, so if your insurance pays less than the billed amount, you may be responsible for the rest of the bill.
The new appeal rules that I talked about in my last newsletter will kick in. This does NOT apply to grandfathered plans. It means, though, that you will have a right to both internal and external appeals (in other words, independent reviews) of denials of coverage.
All of these provisions took effect on September 23, 2010 or the start of the next plan year after that date. This applies to every state, regardless of your insurance company, unless you are in a high risk pool. These rules apply only to plans sponsored by an employer or issued by an insurance company, not to high risk pools.
Another really important feature of the new reform law that took effect in September 2010 is the expansion and clarification of consumers' right to appeal adverse insurance company decisions. Now, we will have uniform standards that will govern appeals -- states, insurers, and health plans will be able to provide more process, but not less. In addition, the notice of adverse decision that gets set to consumers will be clearer so you will know your rights whenever you get a denial of coverage.
But the biggest boon to consumers is the expansion of external appeals, the right to have an independent review organization review your denial of coverage and consider whether to overturn your insurer's or plan's decision. For those of you living in states that don't have external appeals for small group and individual policies -- Mississippi, North Dakota, South Dakota, Alabama, Idaho -- you will now. And most of all, for those of you in self-funded plans -- large group plans, mostly -- you now will have a right to independent review. This is HUGE. Now, your plan will not have the final word. About time.
There still will be plans that don't have to provide the expanded appeal rights -- so-called "grandfathered plans," which don't have to follow most of the health reform changes. As President Obama promised, people are allowed to keep their current plan if they are happy with it. That means that plans that existed on the day when health reform was signed into law that do not substantially change their character (benefits package, copays, deductibles, etc.) are allowed to stay exactly as they were. But if they change, they no longer will be grandfathered and will, instead, have to comply with all of the provisions of the new law, including the expanded right to appeal.
Since most plans do change over time, it's highly likely that plans will lose their grandfathered status along the way. What changes "count" for grandfathering is a very technical subject for another day. We currently are working on comments to the draft grandfathering regulations to make sure that changes that affect you will result in the loss of grandfathered status.
But starting September 23, 2010 or the beginning of the next plan year after that date, all plans other than grandfathered plans will have to provide you with a right of independent review of plan decisions. That is a huge benefit to consumers, and a part of health reform that we believe is truly critical to the lives and health of the patients we serve.
PLEASE NOTE: Nothing on this website should be construed as medical or legal advice. It is informational only.