Refunds that almost didn't happen

By today all health insurance companies were to have notified individual policy holders and small businesses about premium refunds or credits they were due thanks to Obamacare.  In my July 18^th blog I talked about these refunds and how they could finally demonstrate to the public that healthcare reform was working to make health insurance more affordable.

Obamacare required insurance companies to spend at least 80% of premiums on medical services.  The other 20% could go toward all forms of administration including advertising, profits, taxes and CEO salaries.  If the companies didn’t reach the 80% threshold, they had to give back the difference to the policy holders thus giving consumers more bang for the health insurance premium buck.

Over 105 thousand South Carolinians will get refunds totaling $15.3 million and scores of small businesses will get a total of $4.3 million. 

Nationally 12.8 million Americans will receive over $1.1 billion in health insurance refunds.

But South Carolinians almost didn’t see any refunds. 

Back on July 15, 2010, the South Carolina Department of Insurance (DOI) asked the U.S. Department of Health & Human Services (HSS) for a waiver from the 80/20 rule.  Without any public input (but plenty from insurance companies such as Blue Cross Blue Shield of South Carolina) our Commissioner of Insurance argued that requiring carriers to spend 80% of individual policy holders’ premium dollars on medical care would be too difficult for insurance companies to comply with.  As a result, he said, some of our smaller carriers serving South Carolina might leave the state thus reducing consumer choices.  Our DOI suggested that for South Carolina the rule should be 65/35 for 2011. 

Seven states actually did get a waiver on the 80/20 rule out of the 15 that tried.  On behalf of the South Carolina Small Business Chamber I sent a letter to HHS opposing our Department of Insurance request. 

Fortunately our state’s request for the waiver was not granted.  The dire consequences that our DOI warned might happen didn’t happen.  And the biggest hunk of the $19.6 million refunds to South Carolinians will most likely come from the state’s biggest insurance company that was whispering “waiver” in our insurance commissioner’s ear, Blue Cross Blue Shield.

High-Risk health insurance pool better than ever

South Carolinians with pre-existing conditions now shut out of the individual health insurance market got some very good news this week. Health insurance through the high-risk pool operated for the state by the federal government (because South Carolina officials punted the responsibility to the feds) is now almost 15% less expensive than before and no longer requires a letter of rejection from an insurance company.

See the below HHS press release below.
FOR IMMEDIATE RELEASE

Tuesday, May 31, 2011
Contact: HHS Press Office
(202) 690-6343

HHS to Reduce Premiums, Make it Easier for Americans with

Pre-Existing Conditions to Get Health Insurance

The U.S. Department of Health and Human Services (HHS) today announced new steps to reduce premiums and make it easier for Americans to enroll in the Pre-Existing Condition Insurance Plan. Premiums for the Federally-administered Pre-Existing Condition Insurance Plan (PCIP) will drop as much as 40 percent in 18 States, and eligibility standards will be eased in 23 States and the District of Columbia to ensure more Americans with pre-existing conditions have access to affordable health insurance. The Pre-Existing Condition Insurance Plan was created under the Affordable Care Act and serves as a bridge to 2014 when insurers will no longer be allowed to deny coverage to people with any pre-existing condition, like cancer, diabetes, and asthma.

“The Pre-Existing Condition Insurance Plan changes lives, and in many cases, literally saves lives,” said HHS Secretary Kathleen Sebelius. “These changes will decrease costs and help insure more Americans.”

In 23 States and the District of Columbia, the PCIP program is Federally-administered. The remaining States operate their own PCIP programs using Federal funds provided by the Affordable Care Act.

Under the changes announced today, PCIP premiums will drop as much as 40 percent in 18 States where the Federally administered PCIP operates. These premium decreases help bring PCIP premiums closer to the rates in each State’s individual insurance market; in the six States where PCIP premiums were already well-aligned with State premiums, premiums will remain the same.

The changes announced today will make enrolling in the Federally-administered PCIP in 23 States and the District of Columbia easier. Starting July 1, 2011, people applying for coverage can simply provide a letter from a doctor, physician assistant, or nurse practitioner dated within the past 12 months stating that they have or, at any time in the past, had a medical condition, disability, or illness. Applicants will no longer have to wait on an insurance company to send them a denial letter. This option became available to children under age 19 in February, and this pathway is being extended to all applicants regardless of age. Applicants will still need to meet other eligibility criteria, including that they are U.S. citizens or residing in the U.S. legally and that they have been without health coverage for six months.
HHS also sent letters today to the 27 States running their own programs to inform them of the opportunity to modify their current PCIP premiums.
To further enhance the program, beginning this fall, HHS will begin paying agents and brokers for successfully connecting eligible people with the PCIP program. This step will help reach those who are eligible but un-enrolled. Several States have experimented with such payments with good success. This is a part of continuing HHS outreach efforts with States, insurers, providers, and agents and brokers to reach more eligible people and let them know that coverage is available. HHS is also working with insurers to notify people about the PCIP option in their State when their application for health insurance is denied.

Congress created the temporary PCIP program as part of the Affordable Care Act to help uninsured Americans with a variety of medical conditions get affordable coverage rather than be locked out of the system by insurance companies. In 2014 and beyond, insurers will be prohibited from denying coverage to anyone with a pre-existing condition and new competitive marketplaces called Health Insurance Exchanges will give people the opportunity to shop for the policy that best suits their needs. Millions of Americans also will receive tax credits to help make coverage affordable.
Enrollment in PCIP programs has begun to grow rapidly. In the period between November 2010 and March 2011, enrollment in all programs rose 129 percent to more than 18,000 Americans enrolled in PCIP.

“These changes will get more people covered,” said Steven Larsen, the Director of the Center for Consumer Information and Insurance Oversight. “We’re encouraged by recent increases in enrollment and we’re excited to build on these efforts and reach even more people.”
PCIP provides comprehensive health coverage, including primary and specialty care, hospital care, prescription drugs, home health and hospice care, skilled nursing care and preventive health and maternity care. It limits annual out-of-pocket spending and does not carve out benefits the people need. Eligibility is not based on income and people who enroll are not charged a higher premium because of their medical condition.
To find a chart showing changes to PCIP premiums in the States with Federally-administered PCIP programs, visit www.HealthCare.gov/news/factsheets/pcip05312011a.html..

For more information, including eligibility, plan benefits and rates, as well as information on how to apply, visit www.pcip.gov and click on “Find Your State.” Then select your State from a map of the United States or from the drop-down menu. The PCIP Call Center is open from 8 a.m. to 11 p.m. Eastern Time. Call toll-free 1-866-717-5826 (TTY 1-866-561-1604).

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Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news

Healthcare Reform’s first anniversary

All across the country this week small business groups will be celebrating the one year anniversary of national healthcare reform—The Affordable Care Act (ACA)—signed into law on March 23, 2010. Click here for the small business ACA facts and click here for a free webinar—Your Bottom Line: What healthcare Reform Means for Your Small Business.

Today The South Carolina Small Business Chamber and the Small Business Majority are sponsoring a Roundtable at noon in Columbia on the issue. Guest speaker for the event at the Clarion Town House is Chiquita Brooks-LaSure, Director of Coverage in the Office of Health Reform (OHR) at the U.S. Department of Health and Human Services (HHS).

The HHS OHR coordinates closely with the White House Office of Health Reform to provide leadership for and coordination of the development of the Administration’s policy agenda across executive departments and agencies concerning the provision of high quality, affordable and accessible health care and to slow the growth of health costs. Within OHR, Chiquita is responsible for policies regarding the new insurance options and Medicaid coverage created under the Affordable Care Act.

Ms. Brooks-LaSure will also be one of the speakers this evening’s BuySC Micro Conference at 6 p.m. This event will be at held at Coal Powered Filmworks, 1224 Huger Street, Columbia. For more information call Stephanie at 803-252-5733.