ACA Title 1, Sec. 1253. Effective dates: “Good” – with enough time for advance planning. This provision makes the proposed changes in this subtitle effective for all health plans with anniversary dates beginning on or after January 1, 2014. This provides a reasonable amount of time for employers and health plans to adjust to the required changes in this subtitle. However, it is still a monumental undertaking when viewing the totality of the changes required by the Law.

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ACA Title 1, Sec. 1252. Rating reforms must apply uniformly to all health insurance issuers and group health plans: “Good” leveling the playing field. This provision establishes a “level playing field” for all plans in a given marketplace. This is likely to prevent “cherry picking” through manipulation of premium rates. Combined with the other standardization of plan design requirements and standardized communications requirements it should help enable healthy price competition to take place.

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ACA Title 1, Sec. 1251. Preservation of right to maintain existing coverage: “Good” – but somewhat moot. This provision provides a semblance of protection for health plan coverage that existed at the time of the enactment of the Law (March 23, 2010). These health plans are considered “grandfathered health plans”. As long as employers and plan sponsors don’t change any provisions of the plans they are considered as “grandfathered health plans.” However, health plans have ended coverage for a large number of individual health plan holders due to their inconsistency with other requirements of the ACA. Also the eventual implementation of the tax advantage status of health plans offering “Essential Health Benefit Coverage” and the use of uniform rating procedures will likely act to bring about changes to virtually all the “grandfathered health plans.” Therefore the protection implied by this provision is largely moot.

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ACA Title 1, Sec. 1201 Amendment to the Public Health Service Act: 2 “Uglies”, 3 “Bads” and 3 “Goods” This section includes several important policies that will have far-reaching implications and effects on the health insurance industry. Each of these are reviewed in turn.

Sec. 2704. (SIC) Prohibition of preexisting condition exclusions or other discrimination based on health status. “Ugly” – only if everyone is required to have health insurance coverage (and they aren’t) and they have it, otherwise I believe that this provision will ultimately drive most health insurers out of the marketplace and/or out of business. I think that this is the health insurance equivalent of “sub-prime mortgages”. This provision becomes really financially and economically toxic when “guaranteed issuance” or “guaranteed availability of coverage” is also implemented, which is called for in the Law under Section 2702. In a very practical sense I believe these two provisions (Sec. 2704 and Sec. 2702) have the potential to force the entire country into a single payer system like Medicare within 5-10 years. Perhaps this is what the legislation’s authors want to see happen. I don’t.

Sec. 2701. Fair health insurance premiums. “Bad” – Restricts rating options to an overly narrow range of options and does not include previous claims experience or wellness actions and activities.

Sec. 2702. Guaranteed availability of coverage. “Ugly” because this provision prohibits health insurers from turning anyone down, in others words they must accept all comers, regardless of their immediate likely health care liability. If the healthy individual doesn’t have to have health insurance coverage they won’t secure it except when they know they have a serious health problem. Therefore “adverse selection” becomes the mechanism by which health insurance becomes the new “subprime mortgages.”

Sec. 2703. Guaranteed renewability of coverage. “Good” – This provision is intended to prevent health insurance issuers from cancelling coverage of those that have significant claims expense. This seems to me to be a fair requirement that protects the individual consumer from the arbitrary and capricious actions of a health insurance issuer. As long as premiums are paid and have not been raised exorbitantly then the insurer should continue to manage their financial commitment to the patient/consumer.

Sec. 2705. Prohibiting discrimination against individual participants and beneficiaries based on health status. “Good” – Here we have legislative staff authors of the legislation inserting the actual regulations regarding the use of wellness programs and wellness incentives that have been promulgated through the federal rule making process. A new addition authorizes up to a 10 state demonstration program using the wellness incentive features contained in the Law and requires the administration to report back to Congress on the effectiveness of wellness programs.

Sec. 2706. Non-discrimination in health care. “Bad” – This section prevents insurers from “discriminating” against providers. Exactly what that means will have to be spelled out in regulations. How exactly are insurers going to negotiate discounts with providers if they can’t exclude any from their plans? This section falls short of “any willing provider” verbiage but it doesn’t appear to give health insurers much leverage in the reimbursement process.

Sec. 2707. Comprehensive health insurance coverage. “Bad” – This provisions requires that individual and small group health plans be comprehensive in benefit coverage, not exceed the annual cost sharing limits of the Law and if plans are offered to children only that they contain all the coverage provisions.

Sec. 2708. Prohibition on excessive waiting periods. “Good” – This provision prevents any waiting period over 90 days which seems like an appropriate limitation.

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ACA Title 1, Sec. 1005 Effective date: “Bad” – Should have used regulation process: This section does what most of the sections in ObamaCare do: they hurry this historical undertaking into action prematurely and with great haste. The problems with the Healthcare.gov website are indicative of the general haste embedded in the Law by democrats making so much of the Law effective on the date of enactment. After personally spending 10 years of my career as a federal bureaucrat and regulator, the over optimistic timelines embedded in the ACA invite problems like the website. I would change this to reflect effective dates that connect more carefully and thoughtfully with the federal regulatory process.

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ACA Title 1, Sec. 1104 Administrative simplification. “Bad” – Extends HIPAA standardization too far: This section extends the standardization of all claims, patient care, electronic claims payment procedures and health plan reporting provisions originally contained in HIPAA. This looks like more extensive standardization of “operating rules” with sizable financial penalties for non-compliance. This feels like the “dead hand of government” requiring everyone to do everything regarding reporting and payment the same way. What happens to innovation and improvements when government dictates standardization? I think this is a provision which will lead to a higher degree of standardization and the loss of responsiveness and creativity among providers and health plans. Also the National Committee on Vital and Health Statistics is the advisory group expected to provide leadership. How close is the group to current delivery system realities? I believe this section needs to be scaled back and its purposes prioritized based on consensus practices.

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ACA Title 1, Sec. 1103 Immediate information that allows consumers to identify affordable coverage options. – “Good” – Excellent feature: This section provides for the establishment of information channels including the Internet that can inform consumers in a consistent way about available health plan coverage. This provision helps minimize the lack of consistent information which has contributed to consumer confusion. Long overdue. Also if you want to check on the status of federal regulations implementing this provision and all the other parts of the ACA go to….https://www.federalregister.gov/health-care-reform.

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ACA Title I, Sec. 1102. Reinsurance for early retirees. “Ugly” – Unnecessary and unwise. This section provides federal authority to establish a national temporary re-insurance fund to handle excess individual loss claims between $15,000 and $90,000 for those over 55 and prior to Medicare coverage. Up to $5 Billion annually is authorized. This amounts to a slush fund that can be tapped by any health insurer that meets the requirements of the regulations. This seems to be a questionable use of federal tax dollars to cover a risk that is neither well documented, well understood or really needed. In addition I don’t think we want to be encouraging early retirement for anyone. Particularly for those under 65. Therefore, it’s my opinion that this provision is of limited practical value, contributes to the federal deficit ($16.4+ trillion) and thus fits clearly in the “Ugly” category and is likely to be justified by …”why not …it looks and sounds good on the surface.” This is another provision that needs to be repealed in my opinion.

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ACA Title I, Section 1004 – Effective dates: “Ugly” – Way too ambitious! The effective dates for Section 1001 – 1003 are by law …”on or after the date that is 6 months after the date of enactment of this Act, except that the amendments made by sections 1002 and 1003 shall become effective for fiscal years beginning with fiscal year 2010.” This is a good example of legislative and administrative over-reach. These effective date provisions deal with some incredibly important facets of health insurance design and operations and they should have been linked to the federal rule making process. Instead they have opened up situations where implementation is uncertain or unclear. I know Congress is impatient to fix the problem of health care and health insurance accessibility and financing, but this type of legislative haste usually turns out to be counter productive. It also further reinforces the mistaken assumption that ….”your health insurance is your health!” Bad thinking and bad health policy.

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ACA Title I, Section 1003 – Ensuring that consumers get value for their dollars: “Ugly” $250 million a year grants to determine “unreasonable” premium increases. This section requires the federal government with $250 million of annual grants to states to determine which health plan premiums are “unreasonable” and to remove the offending health plans from exchanges. How will government staff determine what is “unreasonable”? State insurance commissioners have historically had a very difficult time assessing appropriateness of health plan premium levels and when the process of rate review has then become highly politicized it usually has led to a significant decrease in the number of insurers and the movement of health insurance markets to monopoly and oligopoly pricing patterns. Spending up to $250 million a year on grants to the states is like throwing more money at the problem without having any semblance of a long term solution. What market sector has this approach worked in? None, that I know of. This section is “ugly” and should be eliminated and a provision for reporting of premium patterns to the federal government imbedded in another section of the Law concerning the new role of state insurance commissioners.

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