Holding Insurance Companies Accountable for High Premium Increases

— by Kathleen Sebelius, Secretary of Health and Human Services

The Affordable Care Act (ACA) prohibits some of the worst insurance industry practices that have kept affordable health coverage out of reach for millions of Americans.  It provides families and individuals with new protections against discriminatory rates due to pre-existing conditions, holds insurance companies accountable for how they spend your premium dollars, and prevents insurance companies from raising your insurance premium rates without accountability or transparency.

For more than a decade before the ACA health insurance premiums had risen rapidly, straining the pocketbooks of American families and businesses.  Oftentimes, insurance companies were able to raise rates without explanation to consumers or public justification of their actions.

One of the provisions of the ACA is that insurance companies must now reveal the percentage of premium dollars they actually spend on health care and how much they spend on administration (e.g., salaries and marketing. Prior to ACA, this type of information was a closely held secret and insurance companies pocketed a good percentage of your premium dollars. With ACA in place, that’s no longer the case. If an insurance company spends less than 80% of premiums on medical care and quality (or less than 85% in the large employer, large group market), it must rebate the portion of premium dollars that exceeded this limit. This 80/20 rule is commonly known as the Medical Loss Ratio (MLR) rule

Chart showing the percent of rate filings that requested increases of 10 percent or more. 2009: 72%, 2010: 75%, 2011: 51%, 2012: 34%, 2013: 14% Rate Review in Action
The ACA brought an unprecedented level of scrutiny and transparency to health insurance rate increases by requiring insurance companies in every state to publicly justify their actions if they want to raise rates by 10% or more.  Insurance companies are required to provide easy to understand information to their customers about their reasons for significant rate increases, and any unreasonable rate increases are posted online.

And it’s working.  A new report released today shows that the health care law is helping to moderate premium hikes.  Since this rule was implemented, the number of requests for insurance premium increases of 10% or more has dropped dramatically, from 75% to 14%.  The average premium increase for all rates in 2012 was 30% below what it was in 2010. And available data suggest that this slowdown in rate increases has continued into 2013.

Moreover, when an insurer does decide to increase rates, consumers are seeing lower rate increases than what the insurers initially requested.  In the review of rate requests for 10% or more, over 50% resulted in customers receiving either a lower rate increase than requested or no increase at all.

States have received $250 million in Health Insurance Rate Review Grants to help strengthen and improve their rate review processes thanks to the Affordable Care Act.  Of the 44 states that received rate review grants, 40 have reported enhancements to their rate review websites.  These website enhancements include searchable rate filings, new public comment options, live streaming of rate hearings, and plain language explanations of rate review and rate filings.

The Effective Rate Review program is one of many in the health care law aimed at protecting consumers.  The rate review program works in conjunction with the 80/20 rule, which requires insurance companies to generally spend 80% of premiums on health care or provide rebates to their customers. Insurance companies that did not meet the 80/20 rule have provided nearly 13 million Americans with more than $1.1 billion in rebates. Americans receiving the rebate will benefit from an average rebate of $151 per household.

Additionally, today we issued a final rule that implements five key consumer protections from the Affordable Care Act, including protection against denial of health coverage because of a pre-existing condition.  This rule makes the health insurance market work better for individuals, families and small businesses, and it also increases the transparency brought to rate increases by directing insurance companies in every state to file all of their rate increase requests.

For more information about the Affordable Care Act, visit http://www.healthcare.gov/index.html.

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Bills Before Congress: July 9 -13

in the House

The Repeal of Obamacare Act
Would repeal the 2010 healthcare law. It’s the GOP response to the Supreme Court ruling on the law. The House Rules Committee is expected to consider this bill on Monday evening in an “emergency meeting” because the bill will be officially introduced on Monday by Majority Leader Eric Cantor (R-Va.). The House is expected to vote on the bill on Wednesday, July 11.

Republicans in the house have gone overboard this session mandating that each and every bill must specify “pay-fors.”  A repeal of “Obamacare” would pose a $230B increase in the budget deficit.  Watch to see if hypocrisy prevails and whether Rep. Eric Cantor (R-VA) identifies ANY “pay-fors” as part of his repeal effort that is going absolutely NOWHERE.  

The National Strategic and Critical Minerals Production Act (HR 4402)
Aimed at streamlining the process for approving mining rights, and addressing what many see as an increasingly U.S. reliance on imported rare earth minerals that are key to manufacturing and national security.

Several non-controversial bills will also be considered in the House this week:

The Veterans’ Compensation Cost-of-Living Adjustment Act (HR 4114)
Increases, effective as of Dec. 1, 2012, the rates of compensation for veterans with service-connected disabilities and the rates of dependency and indemnity compensation for the survivors of certain disabled veterans.

The Veteran Skills to Jobs Act (HR 4155)
Directs the head of each Federal department and agency to treat relevant military training as sufficient to satisfy training or certification requirements for Federal licenses.

HR 4367 amends the Electronic Fund Transfer Act to limit the fee disclosure requirement for an automatic teller machine to the screen of that machine.

The Hydropower Regulatory Efficiency Act (HR 5892)
Improves hydropower.

The Juvenile Accountability Block Grant Reauthorization and the Bullying Prevention and Intervention Act (HR 6019)
Enhances the use of Juvenile Accountability Block Grants for programs to prevent and address occurrences of bullying and to reauthorize the Juvenile Accountability Block Grants program.

in the Senate

The Small Business Jobs and Tax Relief Act (S 2237) – The Senate will hold a procedural vote on this bill Tuesday afternoon.
This bill (#6 on POPVOX) would reduce corporate taxes on the first $5 million in wages paid in 2012 over 2011.

The Haqqani Network Terrorist Designation Act (S 1959)
Requires a report on the designation of the Haqqani Network as a foreign terrorist organization.

The Former Charleston Naval Base Land Exchange Act (S 2061)
Provides for an exchange of land between the Department of Homeland Security and the South Carolina State Ports Authority.

Other Bills of Interest

The Supreme Court ruling in favor of the healthcare bill prompted the introduction of several bills to repeal the law, none of which appear likely to advance because of the pending House vote on Cantor’s bill.

Three of these similar bills made the top of POPVOX’s most-commented list last week:

The NObamacare Act (HR 6053)
Repeals the provisions of the Patient Protection and Affordable Care Act and the health-related provisions of the Health Care and Education Reconciliation Act of 2010 not declared unconstitutional by the Supreme Court from Rep. Connie Mack (R-Fla.).

The Healthcare Tax Relief and Mandate Repeal Act (HR 6048)
Amends the tax code to repeal the individual and employer health insurance mandates, from Rep. Michael Turner (R-Ohio) and more than 100 other cosponsors.

The NObamacare Funds Act (HR 6054)
Prohibits funding to implement any provision of the Patient Protection and Affordable Care Act or of the health-related provisions of the Health Care and Education Reconciliation Act of 2010, from Rep. Connie Mack (R-Fla.).

Corporations Score another Supreme Court Victory

The Affordable Care Act ruling won’t heal our ailing health system.

By Margaret Flowers

Margaret Flowers

As a physician, I find it very odd that the debate over the Affordable Care Act has focused on the effect the law will have on the presidential election rather than the impact it will have on patients, health professionals, and health outcomes.

The Supreme Court case reinvigorated the debate over the Obama administration’s 2010 health care reform law. But we’re still getting partisan talking points instead of an honest review of the changes that are in store. This will likely worsen as we get closer to Election Day.

The new law is based on concepts developed by the Heritage Foundation, a conservative think tank. Republican presidential candidate Mitt Romney passed a very similar law for his state when he was the governor of Massachusetts. So while most Democrats are celebrating the Supreme Court decision to uphold the Affordable Care Act and Romney is saying he’d repeal it, consider this: Had a Republican passed this federal law, we would have the opposite situation.

imageLet’s put politics aside and look at the law from a policy standpoint. The big winners of the Supreme Court decision are the corporations who are profiting from the current health system — private health insurers, pharmaceutical companies, and corporate-owned hospitals and medical practices.

The Court has deemed it constitutional for the government to require people to spend up to 9 percent of their income to purchase private insurance despite it being a defective product. People with insurance continue to face financial barriers to care. They delay and avoid necessary care because of the cost of co-pays and deductibles.

When patients have a serious medical condition, they risk financial ruin. Illness and soaring medical costs are the greatest causes of bankruptcy in the United States, even though four out of five people experiencing medical bankruptcy have health insurance. Purchasing private insurance is going to be subsidized with taxpayer dollars. It will cost Uncle Sam an estimated half a trillion dollars between 2014 and 2019 to pay that tab, according to the Congressional Budget Office. The insurance mandate and these subsidies will create corporate welfare on steroids.

What will the insurance companies do with all that money? They’ll hold onto as much as they can by denying and restricting payment for care. And they’ll use those dollars to weaken regulations meant to protect patients.

When national health care reform is fully implemented in 2019, 26 million people will still lack coverage. And health costs will continue to rise because the law lacks proven cost controls.

While the law does include a few positive provisions, it won’t stop the deterioration of our health care system. We’ll continue to see unnecessary suffering and preventable death. This is unacceptable when we are already spending nearly twice as much per person on care each year as other industrialized nations with universal health systems and much better health outcomes.

The truth is that we can solve our health care crisis. The fastest way to accomplish this is to drop just two words from the Medicare Act — "over 65" — and immediately expand Medicare to every person. That would create a system that’s about health care, not corporate profits. A universal Medicare system would control costs and improve the quality of patient care.

Let’s demand Medicare for all now. The longer we wait, the more people will suffer and die needlessly.


Margaret Flowers, MD is a pediatrician from Baltimore and co-director of ItsOurEconomy.US.  Distributed via OtherWords (OtherWords.org)

What’s Covered in the Affordable Care Act?

— BY KAREN Y.

The Stew steps through the crap the Right-Wing spews about ObamaCare (The Affordable Care Act) and breaks down what this landmark legislation actually means for average Americans.

AFFORDABLE CARE ACT (ACA) OF 2010

  1. Patient Rights and Protections
  2. Insurance Choices and Costs
  3. 65 and Older
  4. Small Business Tax Credits

The Affordable Care Act puts consumers back in charge of their health care. Under the law, a new “Patient’s Bill of Rights” gives the American people the stability and flexibility they need to make informed choices about their health.

Patient’s Bill of Rights

  • Provides Coverage to Americans with Pre-existing Conditions: You may be eligible for health coverage under the Pre-Existing Condition Insurance Plan.
  • Protects Your Choice of Doctors: Choose the primary care doctor you want from your plan’s network.
  • Keeps Young Adults Covered: If you are under 26, you may be eligible to be covered under your parent’s health plan.
  • Ends Lifetime Limits on Coverage: Lifetime limits on most benefits are banned for all new health insurance plans. Before the health care law, many health plans set an annual limit — a dollar limit on their yearly spending for your covered benefits. Many plans also set a lifetime limit — a dollar limit on what they would spend for your covered benefits during the entire time you were enrolled in that plan. You were required to pay the cost of all care exceeding those limits.
  • Restricts Annual Dollar Limits on Coverage: Annual limits on your health benefits will be phased out by 2014.
  • Ends Pre-Existing Condition Exclusions for Children: Health plans can no longer limit or deny benefits to children under 19 due to a pre-existing condition.
  • Ends Arbitrary Withdrawals of Insurance Coverage: Insurers can no longer cancel your coverage just because you made an honest mistake.
  • Reviews Premium Increases: Insurance companies must now publicly justify any unreasonable rate hikes.
  • Helps You Get the Most from Your Premium Dollars: Your premium dollars must be spent primarily on health care – not administrative costs. Starting July 2012, The percentage of your premium dollars that an insurance company spends on providing you with health care and improving the quality of your care (as opposed to what it spends on administrative, overhead, and marketing costs) is known as “medical loss ratio.”

The new law limits how much of your premium dollar your insurer can spend on things other than providing health care and improving its quality. If your insurance company spends less than 80% of your premium on health care, it must provide a rebate of the difference.

  • Removes Insurance Company Barriers to Emergency Services: You can seek emergency care at a hospital outside of your health plan’s network.

Since the Patient’s Bill of Rights was enacted, the Affordable Care Act has provided additional rights and protections.  The health care law:

  • Covers Preventive Care at No Cost to You: You may be eligible for recommended preventive health services. No co-payment.
  • Guarantees Your Right to Appeal: You now have the right to ask that your plan reconsider its denial of payment.

Flexible Spending Account Changes

An arrangement you set up through your employer to pay for many of your out-of-pocket medical expenses with tax-free dollars. These expenses include insurance copayments and deductibles, and qualified prescription drugs, insulin and medical devices. You decide how much of your pre-tax wages you want taken out of your paycheck and put into an FSA. You don’t have to pay taxes on this money. Your employer’s plan sets a limit on the amount you can put into an FSA each year.

  • There is no carry-over of FSA funds. This means that FSA funds you don’t spend by the end of the plan year can’t be used for expenses in the next year. An exception is if your employer’s FSA plan permits you to use unused FSA funds for expenses incurred during a grace period of up to 2.5 months after the end of the FSA plan year.
  • As of January 1, 2011, the costs of over-the-counter medications will be reimbursed under a Flexible Spending Account (FSA), Health Savings Account (HSA), or Health Reimbursement Account (HRA) only if the medications are purchased with a doctor’s prescription. These restrictions do not apply to the purchase of insulin.

Note: Flexible Spending Accounts are sometimes called Flexible Spending Arrangements. Health Reimbursement Accounts are sometimes called Health Reimbursement Arrangements.

Summary of Benefits and Coverage (SBC)

Starting September 23, 2012 or soon after, health insurance issuers and group health plans will be required to provide you with an easy-to-understand summary about a health plan’s benefits and coverage. The new regulation is designed to help you better understand and evaluate your health insurance choices.

Consumer Assistance Programs

  • Many states offer help to consumers with health insurance problems. The Affordable Care Act improves these services with grants that help states start or strengthen Consumer Assistance Programs (CAPs). The states and territories that applied for these grants have received funds provide residents direct help with problems or questions about health coverage.
  • Whether or not your state has a Consumer Assistance Program, you have rights under the health care law, including the right to appeal decisions made by your health insurance provider.
  • If your state does not have a Consumer Assistance Program, some state and federal government offices may still be able to help you determine your rights and solve problems.

Appealing Health Plan Decisions

The Affordable Care Act ensures your right to appeal health insurance plan decisions – to ask that your plan reconsider its decision to deny payment for a service or treatment. New rules that apply to health plans created after March 23, 2010 spell out how your plan must handle your appeal (usually called an “internal appeal”). If your plan still denies payment after considering your appeal, the law permits you to have an independent review organization decide whether to uphold or overturn the plan’s decision. This final check is often referred to as an “external review.”

Covered Preventive Services

Note: Services marked with an asterisk ( * ) must be covered with no cost-sharing in plan years starting on or after August 1, 2012.

Under the Affordable Care Act, you and your family may be eligible for some important preventive services — which can help you avoid illness and improve your health — at no additional cost to you.

  • Screenings for adults: abdominal aortic aneurysm, alcohol misuse screening and counseling, Aspirin use for men and women of certain ages, Blood Pressure screening for all adults, cholesterol screening for adults of certain ages or at higher risk, colorectal cancer screening for adults over 50, depression screening for adults, Type 2 Diabetes screening for adults with high blood pressure, diet counseling for adults at higher risk for chronic disease, HIV screening for all adults at higher risk, immunization vaccines for adults (doses), Obesity screening and counseling for all adults, sexually transmitted infection (STI) prevention counseling for adults at higher risk, tobacco use screening for all adults and cessation interventions for tobacco users, syphilis screening for all adults at higher risk.
  • Covered Preventive Services for Women, Including Pregnant Women: Anemia screening on a routine basis for pregnant women, bacteriuria urinary tract or other infection screening for pregnant women, BRCA counseling about genetic testing for women at higher risk, breast cancer mammography screenings every 1 to 2 years for women over 40, breast cancer chemoprevention counseling for women at higher risk, breastfeeding comprehensive support and counseling from trained providers, as well as access to breastfeeding supplies, for pregnant and nursing women*, cervical cancer screening for sexually active women, chlamydia infection screening for younger women and other women at higher risk, Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling, not including abortifacient drugs*, domestic and interpersonal violence screening and counseling for all women*, folic acid supplements for women who may become pregnant, gestational diabetes screening for women 24 to 28 weeks pregnant and those at high risk of developing gestational diabetes*, gonorrhea screening for all women at higher risk, Hepatitis B screening for pregnant women at their first prenatal visit, Human Immunodeficiency Virus (HIV) screening and counseling for sexually active women*, Human Papillomavirus (HPV) DNA Test: high risk HPV DNA testing every three years for women with normal cytology results who are 30 or older*, osteoporosis screening for women over age 60 depending on risk factors, Rh Incompatibility screening for all pregnant women and follow-up testing for women at higher risk, tobacco use screening and interventions for all women, and expanded counseling for pregnant tobacco users, sexually transmitted infections (STI) counseling for sexually active women*, syphilis screening for all pregnant women or other women at increased risk, well-woman visits to obtain recommended preventive services for women under 65*.
  • Covered Preventive Services for Children: Alcohol and Drug Use assessments for adolescents, autism screening for children at 18 and 24 months, behavioral assessments for children of all ages, blood Pressure screening for children, Cervical Dysplasia screening for sexually active females, Congenital Hypothyroidism screening for newborns, Depression screening for adolescents, developmental screening for children under age 3, and surveillance throughout childhood, dyslipidemia screening for children at higher risk of lipid disorders, Fluoride Chemoprevention supplements for children without fluoride in their water source, gonorrhea preventive medication for the eyes of all newborns, hearing screening for all newborns, Height, Weight and Body Mass Index measurements for children, hematocrit or hemoglobin screening for children, hemoglobinopathies or sickle cell screening for newborns, HIV screening for adolescents at higher risk, immunization vaccines for children from birth to age 18 (doses, recommended ages, and recommended populations vary), iron supplements for children ages 6 to 12 months at risk for anemia, lead screening for children at risk of exposure, medical history for all children throughout development, obesity screening and counseling, oral health risk assessment for young children, Phenylketonuria (PKU) screening for this genetic disorder in newborns, sexually transmitted infection (STI) prevention counseling and screening for adolescents at higher risk, tuberculin testing for children at higher risk of tuberculosis, vision screening for all children.

65 or Older
The Affordable Care Act strengthens Medicare, offers eligible seniors a range of preventive services with no cost-sharing, and provides discounts on drugs when in the coverage gap known as the “donut hole.”

  • Medicare Preventive Services: Under the Affordable Care Act, if you have Original Medicare, you may qualify for a yearly wellness visit and many preventive services for free. Medicare provides preventive benefits to keep you healthy including a yearly wellness visit, tobacco use cessation counseling, and a range of no-cost screenings for cancer, diabetes, and other chronic diseases.
  • Medicare Drug Discounts: The Affordable Care Act includes benefits to make your Medicare prescription drug coverage (Part D) more affordable. It does this by gradually closing the gap in drug coverage known as the “Donut Hole.”
  • Strengthening Medicare: Over $4 billion in Medicare fraud recovered in 2010. Under the Affordable Care Act, the life of the Medicare Trust Fund will be extended to at least 2024 as a result of reducing waste, fraud, and abuse, and slowing cost growth in Medicare. This will provide you with future cost savings on your premiums and co-insurance.

Small Business Employers
Tax credits and new programs are now available to small businesses. Learn how the law helps make care more affordable for employers, employees, and early retirees:

  • Small Employer Tax Credits: Tax credits for small businesses and non-profits help you bring down the cost of providing insurance. If you have fewer than 25 employees and provide health insurance, you may qualify for a tax credit of up to 35% (up to 25% for non-profits) to offset the cost of your insurance. This credit will increase in 2014 to 50% (35% for non-profits). This will make the cost of providing insurance much lower.
  • Early Retiree Reinsurance Program (ERRP): If your company provides health insurance to retirees ages 55 to 64, it may be eligible for financial help through the Early Retiree Reinsurance Program. The Early Retiree Reinsurance Program provides much-needed financial relief for employers so retirees can get quality, affordable insurance.

Compiled by VeracityStew.com

Also by this author:  What’s in Dodd-Frank?

Published with permission.  Originally published on VeracityStew.com [http://veracitystew.com/2012/06/17/whats-covered-in-the-affordable-care-act/]