Rule Finalizes Consumer Protections Under ACA
The Department of Health and Human
Services (HHS) issued a final rule
last week implementing several consumer protections under the Affordable Care
Act (ACA) to
prevent insurance companies from discriminating against people with preexisting
conditions and protect consumers from insurance company abuses.
Under these reforms, all individuals
and employers have the right to purchase health insurance coverage regardless
of health status. In addition, insurers are prevented from charging
discriminatory rates to individuals and small employers based on factors such
as health status or gender, and young adults have additional affordable coverage
options under catastrophic plans.
These 5 key provisions
are applicable to nongrandfathered health plans:
- Guaranteed
Availability—Nearly all health insurance companies
offering coverage to individuals and employers will be required to sell health
insurance policies to all consumers. No one can be denied health insurance
because they have or had an illness.
- Fair
Health Insurance Premiums—Health
insurance companies offering coverage to individuals and small employers will
be allowed to vary premiums based only on age, tobacco use, family size, and
geography. Basing premiums on other factors will be illegal. The factors
that are no longer permitted in 2014 include health status, past insurance
claims, gender, occupation, how long an individual has held a policy, or size
of the small employer.
- Guaranteed
Renewability—Health insurance companies will no longer be
permitted to refuse to renew coverage because an individual or an employee has
become sick. Consumers may renew coverage at their option.
- Single
Risk Pool—Health insurance companies will no
longer be able to charge higher premiums to higher-cost enrollees by moving
them into separate risk pools. Insurers are required to maintain a single
statewide risk pool for the individual market and single statewide risk pool
for the small group market.
- Catastrophic
Plans—Young adults and people for whom
coverage would otherwise be unaffordable will have access to a catastrophic
plan in the individual market. Catastrophic plans generally will have lower
premiums, protect against high out-of-pocket costs, and cover recommended
preventive services without cost sharing.
In preparation for the health insurance
marketplaces and to streamline data collection
for insurers and states, the final rule amends certain provisions of the rate
review program. HHS has increased the transparency by directing insurance
companies in every state to report on all rate increase requests. A new
report has found that the law's transparency provisions have already resulted
in a decline in double-digit premium increases filed, from 75% in 2010 to,
according to preliminary data, 14% in 2013.