They are:
• No Pre-Existing Condition Exclusions for Children Under Age 19. Clarifies that health plans have to accept sick children before 2014 and cover all of a child’s illnesses if that child already had coverage. These protections will apply to all types of insurance except for individual policies that are “grandfathered,” and will be extended to Americans of all ages starting in 2014.
• No Arbitrary Rescissions of Insurance Coverage. Prohibits insurers and plans from rescinding coverage except in cases involving fraud or an intentional misrepresentation of material facts, not for unintentional mistakes. Insurers and plans seeking to rescind coverage must provide at least 30 days advance notice to give people time to appeal. There are no exceptions to this policy.
• No Lifetime Limits on Coverage. Prohibits the use of lifetime limits in all health plans and insurance policies issued or renewed on or after September 23. More than 100 million Americans currently have health coverage that imposes such lifetime limits.
• Restricted Annual Dollar Limits on Coverage. Phases out annual limits on how much employer plans and new individual health plans pay for health care and bans limits on essential health benefits by 2014. For plan years starting on or after Sept. 23, insurers will be allowed to set annual limits no lower than $750,000; on Sept. 23, 2011, the limit rises to $1.25 million; and on Sept. 23, 2012, it increases to $2 million. Employers and insurers can ask for a delay if they can demonstrate that their current annual limits are necessary to prevent a significant loss of coverage or increase in premiums.
• Doctor Choice. The new rules make clear that health plan members are free to designate any available participating primary care provider as their provider. The rules allow parents to choose any available participating pediatrician to be their children’s primary care provider. They also prohibit insurers and employer plans from requiring a referral for obstetrical or gynecological (OB-GYN) care. These policies apply to all individual market and group health insurance plans except those that are grandfathered.
• Removing Insurance Company Barriers to Emergency Department Services. Prohibits health plans and insurers from charging higher cost-sharing (co-payments or co-insurance) for emergency services that are obtained out of a plan’s network. The rules also set requirements on how health plans should reimburse out-of-network providers. This policy applies to all individual market and group health plans except those that are grandfathered.
The new regulations should have a minimal impact on premiums, according to the administration: The new ban on lifetime limits should affect group premiums by 0.5 percent or less and individual market premiums by 0.75 percent or less. The restricted annual limit policy should affect group and individual markets by roughly 0.1 percent or less. And the prohibition of pre-existing conditions exclusions for children should affect group health plans by just a few hundredths of a percent.
For new plans in the individual market, this impact would be roughly 0.5 percent in many states. In states with community rating (roughly 20 states), the impact could be up to 1 percent.
Obama’s speech followed an earlier meeting between the president, Health and Human Services Secretary Kathleen Sebelius, Labor Secretary Hilda Solis and health insurance CEOs and state insurance commissioners. During the earlier meeting, the administration asked health plans to restrict their rate increases and try to put individual and small markets into larger pools to reduce their premiums, Sebelius said in a conference call after the announcement.
The administration also asked state insurance commissioners to put into place stronger rate reviews procedures where needed. The insurers present “voiced their eagerness to work with the administration to implement this law,” a White House official said.
Insurers echoed that sentiment — “We are hopeful that this meeting begins an era of partnership between the administration and the private sector, with the goal of improving quality, affordability, and access for all Americans,” the Blue Cross and Blue Shield Association said in a statement — but fought back against accusations that they’ve been raising rates just to make more profits.
“Underlying healthcare costs and current economic conditions are driving increases in health insurance premiums,” the statement continues. “We have a range of initiatives underway to rein in costs and improve quality, and we know more needs to be done to address rising hospital, prescription drug, and other costs. With respect to the new insurance reform rules that become effective this year, these rules have the potential to add costs to what we’re already experiencing today. The magnitude of these increases will depend on the specifics of the rules.”
Reform advocates quickly praised the latest developments.
Debra Ness, president of the National Partnership for Women and Families, said the new regulations promised better health for American families.
“Once these regulations take effect, millions more women will be able to access the obstetric and gynecological care they need without referrals or authorization, and children will have better access to pediatric care,” she said. “This means more prenatal care, better access to preventive services, and better health for women and children.”
And Ron Pollack, executive director of the health consumer organization Families USA, pointed out that the fight to pass a Patient’s Bill of Rights started in 1997.
“In its essence, the new Patients’ Bill of Rights means that patients will now be empowered to avoid or remedy possible abuses by their health plans,” Pollack said. “This is a long-awaited improvement for millions of America’s families, and we commend the President for his decisive action.”