With newly enacted mandates under the health care reform legislation, health insurers are spending tens of millions to reconfigure their systems to comply with federal health reform laws passed in March.
New mandates that are effective September 23, 2010:
- Insurers now pay for the full cost of preventive services such as mammograms and colonoscopies
- Prohibition on out-of-pocket lifetime maximums
- Pre-existing condition exclusions prohibited for dependent children up to age 18.
- Children up to age 26 now eligible under a parent’s employer coverage if they meet certain eligibility criteria
The devil is in the details
Since the passage of the PPACA a big news item has been the high renewal health insurance rates proposed by some insurers for some employer groups. Some of these increases are for more than 20 percent. But behind the scenes at insurance companies such as Aetna and others, the work has been, as Hartford-based Aetna spokeswoman Susan Millerick told the Hartford Courant, "a very big, very complex job."
"The work is being managed at very senior levels in the organization and is being supported by hundreds of business and IT employees," Millerick said. "We estimate they have spent thousands of hours completing this work. For example, just providing the necessary information for the Web portal alone took 500 hours."
Other reform hurdles
Going forward, 2011 premium rates will be very closely watched by regulators and the Obama Administration. Additionally, new rules have been announced by the NAIC on Medical Loss Ratio requirements. For information on that issue see this recent article. Health insurers are facing a new requirement starting next year authorized under the PPAca that requires insurers must pay 80 cents on medical expenses -- as opposed to insurance administration and profits. For group plans, such as those offered by companies to their workers, insurers will have to pay 85% of the premium dollars collected out in claims.
Then, if insurers drop the ball or ignore this requirement and don't spend the required minimum on medical expenses, they will be required to mail rebate checks to customers beginning in 2012.
Cartoon courtesy of Phil Hands ©, Wisconsin State Journal cartoonist
