Tuesday, June 29, 2010

Health Care in America: A Layman Reads the Health Care Bill - Part 6

Well it's been a little while since I last posted, but I wanted to make sure that everyone had plenty of time to read, reread, and then reread again the last post, since it was so stinking long...and interesting. I know you appreciated it, and now I think you've had enough time. You're welcome. Really, it was no problem.

But now I'm back with Subtitle E - Affordable Coverage Choices for All Americans. This is exciting stuff. Also, it sounds a lot like the general title of the bill, but whatever. Anyway, let's get started. There are 2 main parts to Subtitle E. The first deals with individuals, and the second with small businesses. Part 1, for individuals, in short, sets up a refundable tax credit for eligible folks under a qualified health plan, and sets up cost sharing reductions for eligible people under a qualified health plan. Then there is the obligatory stuff at the end of Part 1 that deal with details of those plans. Part 2, for small businesses, sets up a tax credit designed to help defray the costs of meeting the requirements of employer sponsored health insurance plans. Let's break them down.

Part 1 - Individuals, Tax Credits, and Cost Reducing

People are eligible for the tax credit if they earn between 1 and 4 times the poverty line (for a family their size) in the relevant year. The credit is equal to the lesser of the following 2 options:
  1. The cost of the monthly premiums purchased through an Exchange
  2. A really complicated equation to figure out the amount of your monthly income spent on insurance. I'm not going to get into it here, but if you ask really nicely, I'll go so far as to show you where exactly in the legislation it can be found, so you can muddle through it like I had to.
There are a lot of restrictions on the credit, like whether or not you get a refund for dependents in certain cases, or if your household income levels change, and tax issues and ratings that I don't think I really understand. But that's the basic idea.

The cost reductions work a little differently. You have to be enrolled in a Silver level plan or higher, and have an income between 1 and 4 times the poverty line again. The primary goal of cost reductions is to lower the actual out-of-pocket spending on health care. There are levels of reduction based on income level. If your income level is at:
  • 1-2x poverty line - cost is reduced by 2/3
  • 2-3x poverty line - cost is reduced by 1/2
  • 3-4x poverty line - cost is reduced by 1/3
The caveat - these reductions shouldn't raise the actuarial value higher than .7, .8, or .9 respectively for sliver, gold, platinum plans.

It appears the federal government picks up the tab on this one, except for the parts of plans in states that require more than the essential health benefits outlined in this legislation. The federal government does not pick up the bill for those parts of those plans, because it doesn't require that they be there.

Once again, none of this is available for illegal aliens (or any other name for anyone here illegally).

In order for the proper info to be gathered to establish the amount of tax credit or cost reductions, people will have to submit info like citizenship/immigration status, family size/household income level, name, address, etc. I think you only have to submit this info if you are specifically applying for this stuff, and I think it is submitted with your taxes. Also included with this info is data on your employer-sponsored health plan so it can be determined what part of your income actually goes to health care premiums. And employers have to meet certain requirements of providing options for health plans that are affordable for their employees and will cover essential health benefits. If they don't, they'll have to pay a tax on the difference between what they offer and what their employees can afford.

There is a steep penalty for providing fraudulent information here - up to $25,000 fine, and if it can be proved that you did it willfully and intentionally, you owe up to $250,000. This is in addition to any civil penalties already standing for fraud like this.

We finish Part 1 with some housekeeping sections on streamlining enrollment procedures, dealing with advanced payment of tax credit/cost-reduction, and other fine print that doesn't really make a lot of difference to normal people.

Part 2 is the shorter of the two. It's pretty simple. Essentially, beginning in 2014 a tax credit will be available to small businesses to help subsidize the cost of providing health plans that meet the federal standards for their employees. The way I read it, employers are required to pay at least 50% of the cost of sponsored health plans, and then get a credit of 1/2 of the amount they pay on behalf of employees. So if I'm doing my math right (seriously a possibility that I'm not) then potentially they could only be paying 25% of that health plan. Not bad.

The rest of this subtitle is, once again, tidying up details about the interceding years (before 2014) and how to work out the equations to figure out who will pay what. It's boring, and really isn't worth getting into. Suffice it to say, there will be a gradual increase of these numbers so small businesses won't jump straight to the 50% number.

So that's it! After that last post, this one is really like a walk in the park. In fact, I bet you'll want to go read a part of the dictionary or an encyclopedia now just to really get a challenge in. Well let me tell you, I support you in that decision (kinda), though even I have never done something like that. And I'm reading legislation, so if you really feel that way there might be something wrong with you. Just something to think about until the next post.

Tuesday, May 25, 2010

Health Care in America: A Layman Reads the Health Care Bill - Part 5

Subtitle D covers a vast stretch of legislative land, and took me quite some time to get a full enough understanding of to actually be able to post something here. Finally, I've traversed its expanse a number of times and I'm here to give you all a step-by-step, detailed tour through the wilderness. In other words, I'm going to try to summarize it like the rest of the posts. Here goes.

You should know that this is the longest post yet...so you might want to grab a glass of water...or vodka.

To start with, it's probably helpful to mention that this subtitle is split into 5 parts. They are, Part 1: Establishment of Qualified Health Plans; Part 2 - Consumer Choices and Insurance Competition Through Health Benefit Exchanges; Part 3 - State Flexibility Relating to Exchanges; Part 4 - State Flexibility to Establish Alternative Programs; and Part 5 - Reinsurance and Risk Adjustment.

Part 1, dealing with the establishment of qualified health plans is, obviously, a big deal. Here, we finally learn that there is in fact a definition of a qualified health plan (i.e. a health plan that is qualified to operate within an exchange...but that's not the definition). It is long and rambling, but the exciting parts are: such plans are certified through exchanges, provide the Essential Health Benefits (to be covered momentarily), are offered through an Issuer which is in good standing with the state, and offer a mix of plans - including at least one Gold level and one Silver level. It also stipulates that rates for the plans must be the same whether offered within an exchange or privately, outside of the exchange.

Next, we have the definition of the Essential Health Benefits. Notably, for those of you following along, these are in Section 1302 - I mention this because this section is frequently referred to throughout the legislation, but you already knew that. These are simply a list of benefits which must be covered by any health plans in exchanges. They are:

  • Ambulatory Patient Services
  • Emergency Services
  • Hospitalization
  • Maternity/Newborn Care
  • Mental Health/Substance Use Disorder Services (including behavioral health treatment)
  • Prescription Drugs
  • Rehabilitation and Habilitation [sic] Services and Devices
  • Laboratory Services
  • Prevention & Wellness Services and Chronic Disease Management
  • Pediatric Services, including oral and vision
It is noted here that coverage of these benefits must be equal to that provided under "typical" employer sponsored plans. In this case, there is included a set of instructions for determining what is "typical." It is also specified that coverage of these benefits must be balanced, not weighted entirely toward specific benefits and limited severely on other benefits.

Next up, we discover Levels of Coverage within Exchanges. There are four (4) levels of coverage. They are: Bronze, Silver, Gold and Platinum. The levels of coverage a differentiated based on Actuarial Value of the plans. AV is a fairly complex issue, which is actually handled quite nicely by the group responsible for Consumer Reports. You can find their article here. It has charts and graphs...so...yeah. I'll try to explain it below without charts or graphs. Feel free to scroll down.

Essentially, the AV of a health plan is the amount that, over the whole average population of people, the plan is expected to cover in health expenses. So, if your health plan's AV is .60, then the plan will, on average, cover 60% of the medical costs of those involved in the plan, and the average amount covered by enrollees will be 40% of the costs. This means that chances are, if you're fairly healthy and not racking up a lot of medical costs, you'll pay more than your 40%, because it's based on the average, and you might not reach your out of pocket expense limit. If you're still confused, go check out that link. The graphs are helpful.

That said, the 4 levels of coverage are differentiated by their actuarial values - .60, .70, .80, and .90 respectively. Because the Platinum plan will cover an average of 90% of the enrollees' medical costs, it will be considerably more expensive than the Bronze level plan. That is the long and short of the coverage levels. The caveat here is that they also provide for a Catastrophic Plan, which is available only to people under 30, who meet certain criteria for tax exemption. These plans will cover essential benefits, but, among other things, don't kick in until the enrollee has spent the total out-of-pocket cost-sharing limit for the year.

The next major issue covered here deals with the never-divisive subject of abortion. It comes down to this: abortion is not required to be covered by a plan in order for the plan to qualify for the exchange. However, at least one plan must be offered within each exchange that does cover legal methods of abortion. Laws regarding federal funding of abortion stay the same. Also unchanged are any state laws regarding abortion - including parental notification laws, where applicable. Providers retain the right to refuse to perform abortions.

The final tidbit of information in Part 1 deals with market definitions. I know, I was excited, too. Here's the quick version - Individual Market and Group Market definitions are self-explanatory. If you need more help with that, you're out of luck. The only thing that needs explaining really is the difference between large and small group markets. It's simple - large group markets are for employers who employ at least 101 employees at the start of the plan year.

Now it's time to move on to Part 2! Hooray! Part 2 deals with Consumer Choice and Insurance Competition within Exchanges. To start with, we get a little statement about the reason for exchanges. They exist to "facilitate the purchase of qualified health plans" and to help small businesses in the state enroll their employees in health plans. They must be established, in each state, by January 1, 2014. Also, they'll get federal funding to be used only for the establishment of the exchange - not it's operation once it's established.

The criteria for certification within an exchange is as follows:

  • Must meet marketing requirements, including not being marketed specifically to discourage people with "significant health needs"
  • Must ensure plenty of choice to consumers
  • Must include, in-network, providers serving predominantly low-income, under served neighborhoods
  • Must be accredited by consumer review programs - these will be established by the exchanges and will have review/satisfaction systems which will be incorporated into the web portal discussed earlier
  • Must use uniform enrollment form and the standard format established earlier
Plans must also have a rating system in the exchange based on quality and price, and must include standard annual enrollment periods as well as special enrollment periods (such as for marriage, divorce, etc.).

Here we learn that the exchanges are specifically run by the state governments or approved non-profit organizations, and that states can require the additional coverage of benefits not specified in the Essential Health Benefits. However, any cost associated with coverage of those additional benefits must be covered by the state, not passed on to the federal government.

The functions of state exchanges are as follows:

  • Certification, re-certification, de-certification of any plan applying to the exchange
  • Operation of a toll-free assistance hot-line
  • Maintenance of a website with standardized comparative information on all plans
  • Assignment of ratings to plans as discussed above
  • Informing public about state programs like CHIP programs, Medicaid, etc. - to include eligibility, requirements, plan information - and enrollment of all qualified individuals
  • Provide a calculator to show actual cost of plans after "premium tax credit under Section 36B" of the 1986 tax Code and "cost-sharing reduction under Section 1402"
Other miscellany: all exchanges are to be self-sustaining by January 1, 2015; regional and interstate exchanges are allowed, must be approved; there are no requirements on choosing specific plans; no one will be compelled to buy through an exchange, except members of congress and their staff; all exchanges will undergo annual audits to ensure transparent use of funds.

And that's all for Part 2. They go by so quickly, don't they? On to Part 3!

Part 3 covers state flexibility in exchanges. These include non-profit, member-run insurance issuers and a non-profit, community insurance option.

To begin with, let's examine the non-profit, member-run issuers. The Secretary of Health will have $6 billion to distribute to the states for the establishment of these plans in the form of grants and loans. Once again, these funds are to be used only for establishment, not further operations of these programs. They are calling them "Consumer-Operated & Oriented Plans" or CO-OPs. Pretty witty, eh? Well, in any case, they want CO-OPs to be established in every state, with priority for the funds to go to CO-OPs that will be state-wide, have significant private support and meet other specifications. If no one steps up to start one, the Secretary can use the appropriated funds (that state's portion of the $6 billion) to "encourage" creation of one in that state.

CO-OPs must sign an agreement to meet certain requirements to get the federal funds - including not using any of the money for marketing, propaganda, or lobbying purposes. Failure to meet the requirements, or fix problems once they've been pointed out, will result in a fine of 110% of the total loan and grant amount, plus interest. Yikes.

To qualify for funds, a CO-OP must use all profit money (once they've paid back the loans) to lower premiums, improve member benefits, and otherwise serve the members. They must still comply with all state insurance laws, including those regarding certification and licensing. Also, these organizations will fall into a new 501(c) tax category, the 501(c)29...in case you were wondering. I know you were.

Next we move on to what sounds very similar to what we just talked about - Community Health Insurance options. These are also to be started with federal funds - though I don't believe the amount was specified. I don't recall seeing anything about them being in every state, and the federal funds will, again, be used only for the establishment of the program, not its continued operation. They must meet state solvency requirements, though those aren't specified anywhere in this legislation as far as I can tell.

These options will cover only the essential benefits, and enrollees can pay out of pocket for any additional coverage - though again the state can add benefits, but must cover any additional cost - they can't pass it along to the federal government. The stated goal of these programs is to provide high value for premiums, reduce administrative costs, promote administrative simplification, provide high quality clinical care, provide high quality customer service, and provide a sufficient choice of providers. I may be wrong, but most of this sounds like the stated goal of the exchange itself...so by the end here we should have the most efficiently run, administratively simplified, high quality, customer oriented health plans in the world!

Enough with this repetition in Part 3 - let's move on to Part 4, regarding state flexibility to establish alternative programs. The stated alternative programs amount to basically 2 things - programs for low-income individuals who aren't eligible for Medicaid, and the allowance of multi-state and national plans.

Let's start with the second part first. The multi-state and national plans are just that - plans that cover multiple states or the entire nation. Basically this section is in here just to state that those are allowed. It seems somewhat unnecessary to me, but hey, this is federal legislation we're talking about. Why skip saying something when you could just go ahead and write 4 or 5 pages about it?

The first part is more interesting - programs for low-income folks who are ineligible for Medicaid. These programs are essentially subsidized health plans for people whose household income is between 133% and 200% of the poverty line and who are under 65 and, again, ineligible for Medicaid. They provide the essential health benefits at a discounted rate. As I read it, if your household income is less than 150% of the poverty line, you pay the cost of the second-lowest Silver level plan, but get the cost-sharing benefits of the platinum plan. If your household income is between 150% and 200% of the poverty line, you pay the same, but get cost-sharing equivalent to the Gold plan. Not a bad deal, if you ask me. And states are supposed to contract with providers to negotiate supplying these plans at a discount to the state.

Finally, we arrive at Part 5, which discusses reinsurance and risk-adjustment. To be honest, I'm not sure I follow the reinsurance thing here. I've looked it over a number of times, and I while I'm not sure who is being actually re-insured here, I guess this establishes a program that will provide some cash to help stabilize the premium rates for the first 3 years of the exchange programs, when, we're told, price spikes are a high risk. I suppose this is due to all the transition and chaos, but it's not really explained. In any case, it's supposed to help keep everything level as far as premiums go. I'm not really buying it, but I'm not sure what the downside is, here.

The risk-adjustment part I do understand. It's pretty simple. Low-risk plans, those with an actuarial risk for their enrollees which is less that the average actuarial risk of all enrolless in all plans in the state must pay a fee that will go to helping cover costs of high-risk plans. High-risk plans here are plans whose actuarial risk is higher than the average actuarial risk of all enrolless in all plans in the states. In simpler terms, if the enrollees in a plan are, on average, really healthy, and the actuarial risk for them is, on average, less than what it is for an average of everyone in the whole state, then your plan is a low-risk plan. The opposite is true for high-risk plans.

Congratulations! You've finished the longest, driest post yet in our epic journey through the health care legislation. I'm proud of you. Now take a breath...and re-read it, because let's be honest, you probably fell asleep about half way through. When you've finished that, you can move on to more exciting blogs, like ones about famous people tweeting obnoxious things or non-famous people tweeting obnoxious things on reality shows. Until next time!

Thursday, May 13, 2010

Health Care in America: A Layman Reads the Health Care Bill - Part 4

In this installment of the health care act reading, we'll be looking at Subtitle C: Quality Health Insurance Coverage for All Americans. This subtitle is broken up into 2 parts, so that's how I'll break up the post as well. The first part is yet another set of amendments to the Public Health Service Act. That is followed up with a foray into the rights concerning existing coverage. Let's get started!

Subtitle C is a pretty exciting subtitle, and I don't mind saying so, and the bulk of it is found here in Part 1. Here, Sections 2701 - 2708 are amended. Rather than breaking them down one by one bullet-point style, I'll just give you the gist of it all at once.

First, we eliminate exclusions and discrimination based on preexisting and other health conditions. Apparently, the Public Health Service Act specifically allowed for such discrimination, but it's off the table now. Also changed are the rate and reasons for which premium rates can vary. Now, the only variance allowed is based on: individual vs. family coverage; age (not more than 3 : 1); tobacco use (not more than 1.5 : 1); and rating areas, which will be established by each state. Also of note, here, is that age and tobacco variations have to be proportionate. So if 1 person in your family of 5 would be affected by those variances, your premium can only be affected by that same proportion.

Another major change in these amendments is that health plans cannot discriminate against people based on what they're calling "health status." First, eligibility rules are stated, listing several examples of health status factors such as "health status" (wow, thanks!), medical condition, claims experience, medical history, genetic information and disability. Second, to put those factors into practice, the amendment prohibits "wellness programs" and disease prevention programs with rewards (like premium discounts and rebates) if they require the fulfillment of a health status requirement to achieve. So, a program cannot require that, for example, an individual meet a certain weight requirement, or run a given distance or lift a required amount of weight in order to receive a premium reduction or rebate. Those goals may not be medically feasible (or advisable) for certain people, so they are not valid goals in these programs. There are, of course, exceptions to this rule. In order to be legal, such a program must meet the following requirements:

  1. The discount must be equal to less than 30% of the total cost of coverage
  2. The program must be "reasonably designed to promote health or prevent disease" and can't be "subterfuge for discriminating based on a health factor" and, my favorite, can't be "highly suspect" in the method of health promotion or disease prevention. You gotta love legislative language, eh?
  3. It must have open eligibility at least once a year
  4. It must be available to all "similarly situated" individuals, and offer alternative standards for cases in which achieving the standard is medically dangerous or inadvisable. And whenever one standard is listed in the program literature, they must both be listed.
These programs will have a 10-state, 3 year demonstration period (from 2014 - 2017), and if they work they can then be expanded. Part of that demonstration will include, of course, a report , which will note what programs and rewards were most effective at promoting health and preventing disease, which were cost-effective, and how much they might cost the federal government if they were implemented on a more broad (i.e. nation-wide) scale.

Other notable changes in the amendments:
  • Insurance issuers have to grant coverage to all who apply
  • Renewability of coverage is guaranteed
  • Insurance issuers cannot discriminate against health providers (i.e. hospitals/doctors) if they meet plan requirements and, of course, are practicing legally
  • All health insurance plans must meet certain "comprehensive" coverage requirements, which will be enumerated later in the legislation, and will be called "essential benefits"
  • Excessive waiting periods are prohibited - apparently we'll hear more about this in Section 2704(b)(4)
Part 2 of Subtitle C deals, as we said, with existing coverage. This part is pretty simple. Basically, if you have health insurance, either from the individual market or as part of a group plan (like through an employer), the amendments in this subtitle (C) and in subtitle A will not apply to your insurance. Even if you renew your insurance, the changes won't take effect, as long as there are no changes to your coverage. Also, if it was possible for your family to join your plan before, they can still do so without the changes. And if your employer has a plan (i.e. a group plan) they can continue to enroll new employees (and families, as applicable) without the changes. If your health plan is part of a collective bargaining agreement, none of these changes will take effect until the last part of the agreement expires.

Two other little tidbits from this subtitle - all standards have to be applied uniformly to all health insurance issuers; and all amendments in Subtitle C are effective for plan years on or after January 1, 2014.

So that's it! That's Subtitle C, in all its glory. Stay tuned for the next installment - Subtitle D, the longest subtitle yet! And let me tell you, it's a real page turner. All 30 or so pages of it!

Saturday, May 01, 2010

Health Care in America: A Layman Reads the Health Care Bill - Part 3

Before we begin the almost uncomfortably exciting Subtitle B of Title I of the health care act, I believe some administrative activity is in order. It has come to my attention that the version of the legislation I linked to in the first post is technically the Senate version of the bill. While I believe that there is no difference between that and what is officially listed as law, I think in the name of authenticity that my source should be updated. As such, I found, through the government printing office website, the full text of the bill as enacted. I'll also update the original link to reflect this change. An unexpected upside to this adjustment - the bill is now a measly 906 pages! Not that anything is missing, the text is just mashed closer together with smaller spacing and, I believe, a smaller font. Good times!

And now, on to the the actual reading.

Subtitle B - Immediate Actions to Preserve and Expand Coverage is, as mentioned above, riveting stuff. So let's get to it.

Section 1101 starts out the subtitle dealing with granting those with preexisting conditions immediate access to health care. By sometime around June or July, a temporary "High Risk Pool" will be established to provide insurance to said folks. This pool will expire on January 1, 2014. The pool cannot restrict because of preexisting conditions - surprise! - and must meet specific requirements, such as covering at least 65% of costs and meeting a specific out-of-pocket limit which can be found in section 223(c)(2) of the Internal Revenue Code of 1986 (hereafter referred to as the "1986 Code"). Apparently one is supposed to be able to read section 223(c)(2) and understand just what that out-of-pocket limit is. Also apparently, one should be smarter than me to do so. I think it's $5,000 max, but I'm not guaranteeing that. Feel free to check my work on that one.

Other restrictions stipulated apply to how drastically rates can vary, specifically that there cannot be a 4 to 1 variance based on age. I'm assuming this means that at most, an older person who is more of a liability to the insurer can't pay more than 4x the amount a younger person would pay.

Eligibility for the pool is pretty simple - one must be a U.S. citizen or national, have a preexisting condition, and cannot have been insured for the prior 6 months. This last part inspires the next part - a stipulation against other insurers "dumping" risk, which is to say encouraging (or paying) folks enrolled on their plans to leave so they can be eligible for this new pool. That kind of activity will be illegal, so don't even think about it.

There will be a provision of $5 billion to cover the costs of the pool that exceed the income from premiums. It is also required that, in the next 4 years, procedures be devised to transition enrollees to a qualified health plan in one of those mysterious exchanges we've mentioned earlier. Those qualified health plans will be required to leave out coverage caps on this. It is also noted that the Secretary (presumably the Secretary of Health) can stop taking applications to the pool in order to stay within the $5 billion budget, and that this pool provision supersedes any state laws for high risk pools. So far, this is the closest thing I've found to infringement of the Constitution, and I'm not even sure it is. I believe that the Constitution explicitly states that the federal government can enact laws that will supersede state laws. I'm just saying this is the closest thing I've found so far. I'd be interested to know if anyone reads this differently.

Section 1102 provides for reinsurance for early retirees. This is a temporary gig, and expires January 1, 2014. After being confused about this one for a while and seeking input from none other than my brother, I believe this implies an expansion of Medicare. I also believe this because I'm pretty sure I saw in the table of contents that later on we'll see an expansion of Medicare. I'm good like that.

In any case, it's essentially reinsurance for folks who are retired, over 55, and not yet eligible for Social Security benefits if they're enrolled in an early-retirement insurance plan sponsored by a previous employer or employers. The plan appropriates $5 billion to reimburse those plans for claims of expenses between $15,000 and $90,000 in a plan year. It will reimburse up to 80% of the total expenses, but those reimbursements have to be used by the plan to lower the cost to the individual enrollees by lowering premiums, deductibles, co-payments, or out-of-pocket costs. This will be enforced by annual audits of the insurers.

Section 1103 tackles information that is supposed to allow consumers to identify affordable insurance. This one's pretty cool, actually. It has two parts. First, in May of 2010, a standardized format will be created for the presentation of information on coverage options. Think of it as the "Nutrition Facts" of health insurance, except, despite what you may see on certain auto insurance commercials, no insurance comes in a cardboard box. Sorry. Anyway, the format has to at least include info on:

  • the percentage of premium revenue spent on non-clinical costs
  • eligibility
  • affordability
  • premium rates
  • cost-sharing provisions
Second, by July 1, a web portal will be created through which anyone, in any state, can find "affordable health insurance options in their state." The aforementioned standard format will be used for the website.

The final section in Subtitle B, section 1104, covers "Administrative Simplification." I know, I'm excited, too, that the same folks who brought us the DMV and eleventy-billion different variations of the 1040 tax form are now putting on clinics for administrative simplification. But this section is surprisingly valid.

First off, we have the creation of what they're calling Uniform Standard Rules of Operation for, basically, paperwork. This Standard requires simplification of terminology and forms within the health care/health insurance industry. It "seeks to reduce the number and complexity of forms...for patients and providers." It clearly states that the goal of these uniform operating rules is ease of use and simple "uniformity."

These Standards must be adopted by July 1, 2011 for implementation on or before January 1, 2013, and must include special rules for dealing with electronic payments. Similar rules for health claims, enrollment, premium payments, etc. are required to be effective at least by January 1, 2016. It is disturbing that there exists an industry for which it seems understandable that the government should step in and effectively say, "Ok, folks, this is ridiculous - how can anyone understand all these forms?! Let's clean it up, for Pete's sake!" But, here we are.

My favorite part of this section is the "penalties" part at the end. Noncompliance, basically not implementing the standardized rules, will be incur a penalty payment of $1. Yep, just $1...per covered life in the noncomplying plan...per day that the plan doesn't comply! That could seriously add up, and that makes me happy. Oh, and the penalty for "misrepresentation" (i.e. being a dirty stinking liar) is double the standard penalty. There is, though, a limit on the penalties. They can't amount to more than $20 per person per plan annually. Or $40, if you're a liar.

So there you have it! Subtitle B, done and done. Next time, uncontrollable excitement with Subtitle C - Quality Health Insurance Coverage for All Americans. I know - all of us? But then how will we know who is important and who is worthless around here? Don't worry, I'm sure we'll still find a way. We're innovators, after all.

Sunday, April 25, 2010

Health Care in America: A Layman Reads the Health Care Bill - Part 2

Hello loyal reader(s). We're back with another installment of the Health Care Act reading. In this episode, we will actually begin reading the act. As I mentioned last time, the first part of the legislation ("Subtitle A") is a series of amendments to the Public Health Service Act. Now, I'm no expert, but as far as legislative amendments go, these are pretty exciting. No, seriously.

Considering that I haven't actually read the original text of the Public Health Service Act, I'm not sure what these amended sections originally said (or if they even existed, as opposed to being amendments adding sections to the act). But a quick rundown of the 26 pages of amendments follows:

Amended section 2711 - This section states that there can now be no limits on dollar amounts per beneficiary, and no "unreasonable" annual limits on the dollar value of benefits for an enrollee in a program. There is a caveat - if a plan is not providing "essential benefits" it can have limits on "specific" (though unspecified) covered benefits as permitted by law. Apparently we can see section 1302(b) of the Patient Protection and Affordable Care Act (i.e. the new health care bill) for explanation. Presumably we'll get there at some point in this process.

Amended section 2713 - This section discusses coverage requirements on preventive health services. Insurance companies must cover, without cost-sharing, the following:

  • 'A' or 'B' rated services according to the U.S. Preventive Services Task Force...I don't know what that means;
  • immunizations recommended by the CDC Advisory Committee on Immunizations, which seems reasonable to me;
  • preventive services for infants, children, and adolescents supported by the Health Resources and Services Administration, which again seems like a reasonable source;
  • U.S. Preventive Service Task Force recommendations regarding breast cancer screenings, mammography and prevention, etc.
It is pointed out that this list does not prohibit services other than those recommended by the U.S. Preventive Service Tast Force. So they're just not limiting options, here.

Amended section 2714 - This section is the one I was most familiar with so far. It states that a covered person's dependent will continue to receive coverage until they are 26. This takes place immediately. It's a short section.

Amended section 2715 - This section is about explaining coverage. It's a long section. But I actually really enjoyed reading it because it is so obviously needed for protecting consumers. I'm glad that out of 2000-odd pages, it seems like there's actually some substance to this bill!

The short version is that all insurers will have to issue summaries of their coverage to any enrollees - before they enroll, or any enrollee already in a coverage plan.

The requirements are almost entertainingly specific. For example, all summaries must be 4 pages or less, and cannot contain print smaller than 12 point font. You can almost see those fine-print writing guys throwing their hands up in exasperation on reading that rule. Other highlights - the summaries must be "linguistically and culturally appropriate" to the enrollees, and understandable by the average enrollee; must include definitions - of insurance and medical terms, coverage descriptions that must include cost-sharing descriptions, exceptions, reductions and limitations, deductible/co-pay/co-insurance explanations, renewability, even common examples of coverage scenarios such as pregnancy, chronic conditions, etc. They must also include a clear statement that they are only summaries along with contact info for questions and website listings where the full contract can be found.

The summary has to be delivered within 2 years of passage of the bill (so March 2012) to applicants, enrollees prior to enrollment or reenrollment, and policy holders. They must be available in both electronic and paper format.

Also, insurers are required to communicate plan changes to policy holders at least 60 days prior to effectiveness.

Failure to fulfill any of these requirements will incur a maximum penalty of $1000 per offense. I'm unclear if that means, for example, $1000 per each change that's not communicated, or $1000 per change for each policy holder they fail to contact. I hope it's the latter, but that's just me.

Amended section 2716 - This is another short section. It simply notes that, in group plans, elegibility rules cannot be established that discriminate based on salary. My understanding here is that if your company has a group plan, it can't make elegibility for the really good coverage cost a high dollar amount that will preclude lower level employees from being able to afford it. Elegibility can, however, be based on a percentage of income, so everyone pays, for example, 10% of their income for the better coverage. The goal seems to be that everyone could afford to pay for that coverage, regardless of their wage level. Whether or not they will all decide to do that, when another option could cost only 5% of their income, is up to the employee.

Amended section 2718 - I really like this section, too. Insurers will have to start reporting the percentages of premium income spent on the following 3 categories: 1). Enrollee reimbursement; 2). Quality of health improvement activities for enrollees; 3). all other non-tax expenditures, along with an explanation of those expenditures. These reports will be available for public viewing on the Health and Human Services website.

The next part of the amendment I'm a little shaky on, but I'll do my best. As I understand it, the reports will be used for requiring insurers to grant rebates to enrollees on a pro rata (anyone speak Latin?) basis if they spend more than 20% (for the group market) or 25% (for the individual market) of the premium income on that 3rd group of expenditures. So if your insurer spends 30% of what they take in with premiums on anything other than their policy holders' medical reimbursements or quality of health improvement programs, they have to send you a rebate of some sort.

I think that rocks. I don't personally enjoy the idea of spending nearly 1/2 of my income (according to an NPR report last year, by 2015 Americans will spend about that much on health insurance) on making insurers really really really rich. That's shenanigans.

Along with the rebates, the amendments also require hospitals to publish a list of "standard charges" for items and services provided, so consumers can compare and see what kind of a mark-up they're paying the insurance company (at least, that's what I understand to be the purpose of those lists).

Ok, the last two amendments have to do with consumer education and protection.

First, Amended section 2793 discusses the creation of grants to fund consumer assistance/ombudsman programs to answer questions, explain consumers' rights and responsibilities, and help with consumer appeals to insurance companies within the state exchanges. In case anyone missed it, at some point we learned that there will be private insurance exchanges created in each state (I think it's each one) from which people will be able to buy insurance at a (hopefully) reduced rate, due to competition between insurers. We'll see how that all works out, but right now we're just talking about essentially a consumer hotline and 1-stop-shop to get their insurance questions answered. The federal government will set aside an initial $30 million in grants to establish these facilities. States will have to apply for the grant money for their programs. Each state that qualifies for a grant will get between $1 million and $5 million in grant money.

Amended section 2794 further amends the last section, creating a review process which will require insurers to submit justification for "unreasonable increases" in premiums to the Secretary of the health care administration. The consumer assistance/ombudsman facilities will, in order to get the grant money, also have to engage in collecting info like that from the insurers in their states. That info on premium increases will then be evaluated to determine if an insurer gets to stay in (or gain initial entry to) the exchange program. This amendment also provides for another $250 million in grant money, if necessary, for the assistance offices between 2010 and 2014. Not sure what happens after 2014, but I guess we'll just have to see if there's any more info on that later in the bill. Lord knows there's room for it.

The final section just explains that, unless otherwise specified, all these amendments are effective in September 2010 (6 months after passage of the bill). Sections 1002 and 1003 (these last sections about the assistance and grants) go into effect immediately.

Congratulations! We've completed the first part (Subtitle A, to be specific) of the health care bill! Wasn't that fun? Well, it could have been worse, I suppose. Maybe. Honestly, I'm pretty impressed with it so far. I haven't come across anything that's grossly harmful to the average citizen, and while a lot of this stuff may make it harder for insurance companies to become trillion dollar businesses, that's honestly not a problem for me. I want to pay the insurance company to give me insurance, you know, help, if I need it. And for you to get help, too. Not for them to buy Jaguars. I don't care if they have to drive lame Ford Focuses like the rest of us (seriously, how many of those freaking cars have been sold? It's like 1 out of every 3 cars if a freaking Focus!...sorry, that was random). I'd be interested in any thoughts, questions, challenges to my interpretation that anyone has. Otherwise, I get kinda bored just sitting alone in a room reading health care legislation.

In any case, we'll see you next time, when we begin...wait for it...this is gonna be exciting...Subsection B! Woohoo!

Tuesday, April 13, 2010

Health Care in America: A Layman Reads the Health Care Bill - Part 1

To begin with, let's be clear on one thing. I am a legislation beginner. I've never read a piece of legislation in my life. I thought it would be fun to start with one of the most complex and polarizing pieces of legislation to come out of congress in about a decade or so. I'm a glutton for punishment, it seems.

Now that that's out of the way, let's get started.

The first thing one notices about the bill is the sheer size of it. I looked at a few different versions of it - mostly formatting changes - online before settling on my final choice, and none of them totaled fewer than 900 pages. Unfortunately, the shortest one I found was formatted so that the text was nearly microscopic, not to mention the margins were smaller, so an already daunting document was now made more so by the fact that each page was simply a wall of text nearly eight inches wide and 10 inches tall. Not nearly as inviting as my final decision - the 2,409 page behemoth. Much better.

After coming to terms with the enormity of the document, it becomes clear that this is more than just a large compilation of words and punctuation - it seems to have been deliberately designed to ward off even the most adventurous readers. This is the equivalent of Sleeping Beauty's castle to her potential suitors. Yep, I went Disney in the second post, and compared myself to a knight, and the Bill to a beautiful sleeping princess. Ok, so the metaphor isn't perfect, but the point remains - legislation is designed not to be read. I'm surely not the first person to realize this, but again, this is my first stab at legislation and I was just quite honestly taken aback by the simple un-readability of the stuff.

It starts with 17 full pages of Table of Contents. Seriously, 17 pages. And as if that wasn't enough, once the TOC is finished, we launch right into what appears to be a series of amendments to an entirely separate piece of legislation - from 1944. Not be alarmed, though, said amendments are for Title XXVII of the Public Health Service Act, which, as I understand, is an act from, again, 1944, which spelled out all legislation related to Public Health Service (if you're really interested, this appears to be a pretty good explanation). And so, the series of amendments tackle issues such as "Lifetime and Annual Limits [on benefits and coverage]," rescission, preventative health services, etc. Nothing to scoff at - just something to confuse the rookie (i.e. me).

After an evening of wading through the first several pages of the bill, I think that's about enough for tonight. To recap - we decided that the bill is enormous and confusing. I feel like a lot was accomplished here. Oh, and it starts out referring to other, previous pieces of legislation. But it only took me about 2 hours to figure that one out, so I feel pretty good about the whole thing. Next time, we'll begin actually reading the bill. It's gonna be great!

Health Care in America: A Layman Reads the Health Care Bill - Introduction

What with all the chaos surrounding the passage of the health care bill into law, I decided it was time to break my long silence on this blog. I will take it upon myself to attempt the seemingly impossible - I will read the entire health care bill. And along the way, I'll blog about it here. And for those of you following along at home, you can read what I'm reading, if you're so inclined, here.

Get ready for some exciting reading - legislative style!