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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