The Centers for Medicare & Medicaid Services (CMS) has published a proposed regulation to implement several key provisions of the Affordable Care Act (ACA)/healthcare reform to prevent insurance companies from discriminating against people with preexisting conditions and protect consumers from insurance abuses.
The provisions of the proposed rule include:
Guaranteed availability of coverage
Health insurance issuers generally would be prohibited from denying coverage to people because of a pre-existing condition or any other factor. Individuals generally would need to buy coverage during open enrollment periods. In addition, individuals would have new special enrollment opportunities in the individual market when they experience certain losses of other coverage.
Fair health insurance premiums
Health insurance issuers in the individual and small group markets would only be allowed to vary premiums based on age (within a 3:1 ratio for adults), tobacco use (within a 1.5:1 ratio and subject to wellness program requirements in the small group market), family size, and geography. All other factors–such as pre-existing conditions, health status, claims history, duration of coverage, gender, occupation, and small employer size and industry–will no longer be used by when setting premiums. States can choose to enact stronger consumer protections than these minimum standards.
Single risk pool
Health insurance issuers will be required to maintain a single statewide risk pool for each of their individual and small employer markets, unless a state chooses to merge the individual and small group pools into one pool. Premiums and annual rate changes would be based on the health risk of the entire pool. This provision prevents insurers from using separate insurance pools within markets to evade the market reforms.
Guaranteed renewability of coverage
The proposed rule reaffirms existing protections that individuals and employers have with respect to coverage renewal. For example, the protections would prohibit issuers from refusing to renew coverage because an individual or employee becomes sick or has a pre-existing condition. In addition, the proposed rule includes additional provisions to protect consumers and increase choice for small employers.
The proposed rule also includes provisions for enrollment in catastrophic plans. Catastrophic plans have lower premiums, protect against high out-of pocket costs, and cover recommended preventive services without cost sharing—providing affordable individual coverage options for young adults and people for whom coverage would otherwise be unaffordable .
Martin Simon, JD is a Senior Legal Editor for BLR’s human resources and employment law publications. Mr. Simon has worked in legal publishing for over 25 years. He worked for 7 years as a legal editor for Prentice Hall, where he wrote and edited for the Pension and Profit Sharing and the Plan Administrators Compliance Manual looseleaf services. He has been a legal editor for BLR for more than 20 years. Mr. Simon has been on the Board of the Hartford Chapter of Working in Employee Benefits for 4 years. Mr. Simon has a BA degree with Honors from the University of Connecticut, where he was a member of the Honors Program and Phi Beta Kappa. He received his law degree from the University of Connecticut and is a member of the Connecticut Bar.