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Obama's Health Insurance Consumer Protections - We're Almost There in MA

Obama's Health Insurance Consumer Protections - We're Almost There in MA

August 3, 2009

Last week President Obama announced his 8 core "Health Insurance Consumer Protections" that he sees as essential to effective health reform.

Here's the list:

  • No Discrimination for Pre-Existing Conditions: Insurance companies will be prohibited from refusing you coverage because of your medical history.
  • No Exorbitant Out-of-Pocket Expenses, Deductibles or Co-Pays: Insurance companies will have to abide by yearly caps on how much they can charge for out-of-pocket expenses.
  • No Cost-Sharing for Preventive Care: Insurance companies must fully cover, without charge, regular checkups and tests that help you prevent illness, such as mammograms or eye and foot exams for diabetics.
  • No Dropping of Coverage for Seriously Ill: Insurance companies will be prohibited from dropping or watering down insurance coverage for those who become seriously ill.
  • No Gender Discrimination: Insurance companies will be prohibited from charging you more because of your gender.
  • No Annual or Lifetime Caps on Coverage: Insurance companies will be prevented from placing annual or lifetime caps on the coverage you receive.
  • Extended Coverage for Young Adults: Children would continue to be eligible for family coverage through the age of 26.
  • Guaranteed Insurance Renewal: Insurance companies will be required to renew any policy as long as the policyholder pays their premium in full. Insurance companies won't be allowed to refuse renewal because someone became sick.

What struck us is how close we are in Massachusetts to meeting all the goals. In addition to providing the broad template for expanding coverage to the uninsured, Massachusetts also provides a model for insurance reforms that let insurance work for people who need coverage.

Here's where Massachusetts is on each of the President's items:

  • No Discrimination for Pre-Existing Conditions: Yes. Effectively prohibited by the merger of the individual and small group markets as part of chapter 58 health reform.
  • No Exorbitant Out-of-Pocket Expenses, Deductibles or Co-Pays: Most of the way. Low income people in Commonwealth Care have no deductibles and sliding scale co-pays. We have reports that CommCare copays have been a barrier to care for some members. In private insurance, the Minimum Creditable Coverage (MCC) regulations restrict deductibles and out-of-pocket expenses. We think the levels are too high for some, but we're the first state in the country to impose any limits on cost sharing.
  • No Cost-Sharing for Preventive Care: Partial. The MCC standards require that all insurers cover at least 3 preventive care office visits pre-deductible. However, preventive procedures are not included, and co-pays can still be charged for preventive office visits. We're supporting legislation to remove all cost-sharing for preventive care.
  • No Dropping of Coverage for Seriously Ill: Yes. All Massachusetts plans are rated without regard to health status.
  • No Gender Discrimination: Yes. Rates in Massachusetts are the same for men and women.
  • No Annual or Lifetime Caps on Coverage: Almost there. MCC standards prohibit lifetime or annual caps, with one exception. Young Adult and student plans are permitted to cap coverage. We are working with the Connector, the Division of Insurance and DHCFP to reverse this rule for young people. (*see update below*)
  • Extended Coverage for Young Adults: Yes, under chapter 58, family members under age 26 can stay on their parent's family coverage for 2 years after not being a dependent, up to age 26.
  • Guaranteed Insurance Renewal: Yes, all Massachusetts plans are guaranteed renewable.

Massachusetts insurance rules have one more vital protection that is being proposed in the national House and Senate bills - a limit on the spread in premiums between the young and old. In Massachusetts, premiums for the oldest person can't be more than double the premiums for the youngest. We think the 2:1 ratio should be tightened (see our blog from March), but it's much better that the 6 to 1 or higher ratios in many states.

UPDATE: We were a tad too enthusiastic; it's a bit more complicated. From commenter 'Nancy:' MCC permits annual caps on non-core services that are not clearly inconsistent with typical employer coverage. It also permits overall lifetime limits on benefits on non-core services, unless inconsistent with standard employer coverage. You can check out the MCC reg, 956 CMR 5, section 2.f for more detail.