Under the Affordable Care Act, individuals, employees, and employers have the right to continue the coverage they had as of March 23, 2010, the date healthcare reform took effect. These are considered "grandfathered plans," and they are exempt from many reforms. Collectively bargained plans are grandfathered until the existing collectively bargained agreements come to an end.
It's important to understand when a plan is grandfathered, so you know when the law applies.
Certain requirements apply to all plans, grandfathered or not. There must be no lifetime benefit maximum limits. They must include dependent coverage for adult children up to age 26. There are no annual limits on certain types of benefits. And no exclusions for pre-existing conditions for children under age 19.
If certain changes in coverage are made after March, 2010, the plan will likely no longer be a grandfathered plan. This means a plan must include 100% coverage for preventive care in- network. It must not require prior authorization for emergency services, it must not have different or additional restrictions for a non-network provider for emergency services, or higher cost-sharing for emergency services from a non-network provider. Plus, it must include coverage of routine patient costs for Phase I-IV clinical trials for treatment of cancer or any other life-threatening diseases, starting in 2014. In addition for 2014:
There is some flexibility to modify a plan without losing grandfathered status. This includes:
A plan can also lose grandfathered status. The following changes to a plan will result in a loss of grandfathered status:
The federal healthcare reform law contains a number of positive steps that Humana supports. The law widens access to coverage, putting health insurance in reach of millions of Americans who were not covered. It also removes pre-existing conditions as a barrier to coverage. It rightly ensures premiums are no longer based on health status or gender. And it provides financial assistance to those in need.
There are areas where the law falls short. It does not address the underlying cause of our healthcare crisis: rising costs. Americans need secure, affordable coverage choices. Cost control is critical to achieving that goal. We are concerned that the healthcare reform law does not address some of the root causes of medical cost inflation. This means the cost curve is likely to continue bending in the wrong direction. The law also includes a premium tax, scheduled to take effect in 2014, which the Congressional Budget Office has said “would be largely passed through to consumers in the form of higher premiums for private coverage.”Improving the system
To truly make coverage more affordable, all parts of our healthcare system must do more to create value, eliminate waste, encourage effective care, and promote health. To do this we must align incentives to reward value. Instead of paying providers based on the volume of services delivered, we must pay for performance.We should create incentives to achieve high-quality outcomes at a low cost.
We must root out waste, fraud, and abuse in the system. Unnecessary procedures, prescription drug abuse, and fraud drive up healthcare costs by billions of dollars each year.
We must eliminate needless and costly variation in the delivery of care. Ensuring widespread adoption of medical best practices, we will get more out of our healthcare dollar. We must also apply technology to improve care, connect the system, reduce errors, and eliminate redundancy.
By attacking costly underlying public health problems like obesity, inactivity, and smoking, we can decrease the epidemic of preventable chronic conditions.Looking ahead
The most significant healthcare reforms are set to take effect in 2014. This includes guaranteed coverage, rating restrictions, and health insurance exchanges (online marketplaces). These dramatic changes will alter our healthcare system considerably. Our goal must be a smooth and stable transition that does nothing to disrupt the coverage that Americans count on today.
We must find ways to ease the transition to new rating requirements, which state experience shows us will abruptly raise costs for the young unless we build in a gradual transition period. We must also preserve a wide range of options, so people can choose a plan that's right for them.Modernizing Medicare
Medicare is another critical piece of the healthcare system. Humana agrees with the President and leaders of both parties that the Medicare program needs to improve to cope with upcoming challenges. The cost of Medicare, for example, is forecast to nearly double in 10 years, to more than $1 trillion.
People with Medicare must have the affordable, quality coverage they need. Not just today, but into the future. Reform proposals vary, but many share important similarities, such as choice and an emphasis on care coordination. The dialogue helps get us closer to solutions.
Medicare can be improved by combining the best of the public and private sectors. The public sector provides an important safety net. The private sector, through Medicare Advantage, has helped improve quality, create value-based networks and systems that coordinate care, and control cost. Medicare Advantage and its coordinated approach to care encompass clinical, wellness, and prevention programs. It’s a model that can help stabilize the Medicare system.Leading the way
Humana is committed to helping build a sustainable future for American healthcare. And we're not waiting. We're advancing ideas, collaborating with doctors, hospitals, and other healthcare providers to increase quality and enhance health outcomes. We’re promoting prevention and wellness, helping patients and physicians fight chronic conditions and reduce unnecessary costs and services. In short, Humana is delivering innovative approaches that are both good for people and good for our healthcare system:
Despite divisions, our nation needs to find ways to move healthcare solutions forward in a constructive way. Humana will continue to work with policymakers on both sides of the aisle. The goals are to promote healthcare affordability, provide security, and preserve choices for all Americans.
This information is only a high-level summary of certain provisions of the health care reform law. This information does NOT attempt to summarize all provisions of the health care reform law. This information is NOT and should NOT be used as legal or tax advice; it should NOT be used as a basis for decisions on how the health care reform law will affect you and/or your business. Should you have any questions on how the health care reform law (including the high level summary of certain provisions of health care reform) will affect you and/or your business, you should seek professional advice from attorneys or other advisors.
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