ACA Title 1, Sec. 1312. Consumer choice. “Ugly” – In appropriately limits risk pool for individual and small group market. This section of the ACA inappropriately limits the use of one risk pool for all individual plan members and small employer group members. The way I read this it prohibits offering a “Wellness- oriented” risk pool for individual and small employer groups. That is very bad from my vantage point. We know that working populations that do wellness programming have lower health care costs than those that don’t do wellness. This provisions requires only one risk pool for the two groups or the formation of one risk pool for both populations. Either way this seems to prohibit the formation of a risk pool that requires the individual and or small employer to engage in wellness activity. This section needs to be repealed or eliminated. I believe we want to encourage market forces to support people taking better care of their own health. This provision works in the opposite direction – Bad! The other parts of this section define “qualified individuals”, “qualified health plans” and “qualified employers” and set some basic ground rules for how coverage will be structured in and outside of exchanges. Most of these provisions help extend the “level playing field” but also lock everyone into fixed positions which usually acts to prevent innovation.

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ACA Title 1, Sec. 1311. Affordable choices of health benefit plans. “Good” – Established the ground rules for the development and operation of “exchanges.”This section of the Law covers the provision of grants to states for the development of “American Health Benefit Exchanges” including assistance to states to establish exchanges using grant funds, including the establishment of Small Business Health Options Program exchanges (SHOP exchanges), functional activities, basic requirements, rating processes and rules for operation. This section also provides the basic requirement for “qualified individuals”, “qualified health plans”, “qualified employers”, and funding conditions. This section enables the refinements that the promulgation of federal regulations achieves. In general the establishment of basic ground rules for the operation of exchanges will ultimately improve price competition among health plans helping to stabilize future medical trend. However in the meantime, if economic “free riders” are still allowed to purchase health insurance only when they need it, health plans on the exchanges will likely experience periodic “death spirals” from adverse selection. The exchanges themselves will likely have to step in to prevent financial insolvency among the more popular health plans.

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ACA Title 1, Sec. 1304. Related definitions. ‘Good” – Defines individual and group markets and large and small employers.This section simply defines the basic terms including “Individual Market” and “Group Market” and the terms “Large Employer” (101+ employees) and “Small Employer (≤100 employees) and transitional rules for their treatment as they grow or change. States can adopt “50” employees as their benchmark if they choose to do so. This provision is definitional detail that contributes to a “level playing field” on a national basis across states and market sectors. Sound development as long as it is enforced through use.

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ACA Title 1, Sec. 1303. Special rules: “Bad”- Identifies special ground rules for handling abortion services. This provision provides general protections for consumers to have access to health plans through exchanges that cover abortion services. It also protects state laws from preemption by federal laws and established ground rules for public funding of abortion services. It also includes protections for providers to refuse on moral grounds from providing abortion services. I don’t know where you as the reader come down on the issue of abortion, but I believe that the life of every fetus, baby, child or infant is of great value and needs to be protected. I believe that all the features contained in this section are intended to handle abortion services in a distinctly different and special way which may be necessary given the controversial nature of abortion, but I wish that as a society we could somehow come to agreement that babies (or whatever you call them), once they have been conceived deserve to live. My opinion has clearly been shaped by my wife and I having two wonderful children and six wonderful grandchildren.

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ACA Title 1, Sec. 1302. Essential health benefits requirements: “Bad”- Too comprehensive and wasteful. This provision establishes the set of benefits and maximum out-of-pocket (MOOP) cost sharing limits that will now apply across all qualifying insured plans. It includes a broad range of benefits by category and on the good side includes a new provision for all health plans providing “Essential Health Benefit Package” to provide a “Preventive and wellness services and chronic disease management” component. (Yea!) However, the bad thing is that the combination of the fairly comprehensive set of benefit coverage requirements and the MOOP limits (Bronze, Silver, Gold, Platinum) work to make all qualifying health plans very expensive thus putting a significant financial pressure on insurers and payers. Specially, when we are attempting to provide new insurance coverage to some 35 million people it adds costs that are excessive and strain the whole system. I believe that this represents a real case of over-reach and jeopardizes the whole effort. I would opt for a three tiered set of benefits with a truly “basic” benefit level, a “medium” level and a “high” level with the individual and business mandates applying only to the “basic” level. On the good side this section includes a limitation on the size of deductibles at $2,000 for individual plan coverage and $4,000 for family coverage. This makes sense but needs to be linked to the personal health savings account provision funded with tax advantaged dollars to the consumer. Another provision of this section is that it prohibits cost sharing on preventive services which is a good feature. Finally, the “wasteful” nature of this provision comes from the fact that our most rigorous research shows that comprehensive health insurance coverage is generally not associated with significant improvement in health status, we may feel better with a richer health insurance plan, but we will not be appreciably healthier. Thus the “wasteful” label on these more comprehensive than needed benefit requirements.

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ACA Title 1, Sec. 1301. Qualified health plan defined: “Good” – a “good housekeeping-like seal of approval”. This section establishes a class of health plans offered by exchanges that are called “qualified health plans” which are really like the old “good housekeeping seal of approval” to provide an easy third party qualification for health plans. To be a “qualified health plan” the plan must be labeled as a qualified plan or certified as one, provide “essential health benefits” coverage, be offered by an insurer that is licensed in the state and in “good standing” implying they are financially stable and considered…”going business concerns,” offers at least two generous health plans (silver and gold levels), and agrees to charge the same premiums to all populations for the plan. (Can’t get the plan for a cheaper price anywhere else) Does not apply to self-insured health plans or MEWAs.

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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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