Objective 6 Flashcards
The “triple aim” (three goals) of health policy
- Better care for individuals - Quality characteristics include: safe, effective, patient-centered, timely, efficient, and equitable
- Better health for populations
- Lower per-capita costs
Causes of poor health and public initiatives to address them
- Environmental factors that contribute to poor population health:
a. Unsanitized water
b. Pollution (air and water)
c. Violence (domestic and street)
d. Unhealthy living environments
e. Food-borne illness
f. Lack of access to fresh, healthy foods - Community disease prevention
- Lifestyle initiatives
- Smoking and substance abuse
- Socioeconomic factors
- Wellness and disease management solutions
PPACA individual and group market reforms
- Individual mandate
- Employer mandate - beginning in 2014, ERs with 50 or more FT EEs must offer coverage or pay a fee. Fee = $2000 * (full-time EEs - 30), adjusted based on number of EEs who receive a premium tax credit
- Essential benefit package - required for qualified health plans beginning in 2014. Provide a comprehensive set of services, preventive services without cost sharing, cover at least 60% of the actuarial value of the covered benefits, and limit annual cost sharing to current law HSA limits
- Medical loss ratio (MLR) - starting in 2011, plans must provide rebates to consumers if the MLR is below 85% for large groups (101+ EEs) or 80% for small group and individual plans
- Benefit and coverage requirements
- Rating requirements
- Benefit tiers - all new plans must be either platinum (covering 90% of benefit costs), gold (80%), silver (70%), or bronze (60%). Insurers may offer a catastrophic plan to enrollees under age 30 and those who are exempt from the individual mandate
- Grandfathering of existing plans - plans in existence March 23, 2010 are exempt from many PPACA requirements, but most benefit and coverage requirements still apply
PPACA benefit and coverage requirements effective in 2010
- All individual and group plans must cover dependent children up to age 26
- Rescissions of insurance coverage are prohibited except in cases of fraud
- Pre-existing condition exclusions for children are prohibited
- No individual or group plans may impose lifetime limits, and plans may impose annual limits only for non-essential health benefits (this was graded in through 2014)
- Services rate A or B by the US Preventive Services Task Force must be covered at 100%
PPACA rating requirements effective in 2014
- Individual and small group plans must be offered on a guaranteed issue and renewal basis
- Plans may not impose pre-existing condition exclusions
- Rating variation is only allowed based on:
a. Age (limited to a 3:1 ratio)
b. Geographic rating area
c. Tobacco use (limited to a 1.5:1 ratio)
d. Family composition - Waiting periods for coverage must not exceed 90 days
Provisions of PPACA health insurance exchanges
- Each state will have an American Health Benefit Exchange for individuals and a Small Health Options Program (SHOP) Exchange for business with up to 100 EEs
- Plans in the exchange must cover essential health benefits, have an OOP max at or below the HSA limit, and fall into one of the PPACA benefit tiers
- Risk pooling - insurers must pool all individual market plans (other than grandfathered plans) into a single risk pool. Similarly, all small group plans must be pooled together
- Participating insurers must meet many qualification requirements such as networks, marketing, reporting, and consumer assistance
- Exchanges may also offer Consumer Operated and Oriented Plans (CO-OPs), which are nonprofit, member-run health insurance companies
Other PPACA provisions
- Premium credits and cost sharing subsidies for those with low incomes (effective in 2014)
a. Premium credits for qualified individuals and families with incomes between 133% and 400% of FPL for coverage purchased through the exchanges
b. Cost sharing subsidies for those enrolled at the silver level in an exchange with incomes between 100% and 400% of FPL - Small business tax credits
- Medicare provisions:
a. Medicare Advantage plans can receive bonuses or reallocations of rebates based on quality. Beginning in 2014, plans are subject to MLR requirements
b. Medicare Part D - beneficiary coinsurance in the coverage gap will be phased down from 100% to 25% by 2020. Retiree drug subsidy payments lost their tax exempt status beginning in 2013 - Revenue provisions:
a. New health insurer tax will collect $8 billion in 2014, grading up to $14.3 billion in 2018, and indexed thereafter
b. Excise tax for high-cost health plans (beginning in 2018)
c. Limitations on tax-favored allowances for FSAs and HSAs
d. New taxes on certain medical devices - Medicaid - expanded to all non-Medicare eligible individuals with incomes up to 133% of FPL. Due to Supreme Court ruling, federal government can’t withhold original Medicaid funding from states who do not expand
Potential problems in an unregulated insurance market
- A dishonest company could gain a competitive edge via:
a. Misleading marketing materials
b. Unfair price
c. Inadequate reserves - Customers do not have the time or expertise to determine which firms are dishonest
- Companies could become insolvent with no warning, leaving policyholders without coverage
Goals of insurance regulation
- Eliminate policies not providing the benefits expected
- Prevent insolvency
- Eliminate policies that provide poor value
- Solve minor consumer problems
- Maintain fair competition
- Raise tax money
- Promote social goals
The steps of regulation
- Licensing
- Information gathering
- Prior approval of policy language, premium rates, reinsurance agreements, dividends, mergers, and investments
- Enforcement via penalties, fines, and/or legal action/license removal
- Receivership
Actions commonly taken by state regulators to prevent insolvency
- Capital requirements (such as RBC)
- Guaranty funds
- Reserve requirements
Types of consumer protection regulation in the US
- Disclosure - disclose key policy features via a shopper’s guide, outline of coverage, summary of benefits, or illustration.
- Reasonableness - loss ratio requirements, mandates
- Fairness - discrimination is prohibited
Responsibilities of the insurance commissioner
- Oversee the operation of the insurance department
- Interpret insurance laws
- Make regulations implementing insurance laws
- License insurance companies, agents, brokers, and consultants
- Conduct examinations of insurers, and assess penalties for violations of laws
- Review form and rate filings - may require approval before use
- Regulate advertising - to protect consumers from unfair, inaccurate, deceptive, and misleading advertisements
- Regulate business practices, including U/W and claims
- Enforce prompt pay laws
- Regulate insurer solvency - most important duty
Reasons for an insurance commissioner to assume an insurer’s assets
- Non-cooperation with examiners
- Refusing to remove questionable officers
- Charter violations
- State law violations
- Endangered capital or surplus
- Technical insolvency
Standard group contract provisions required by most state insurance laws
- Grace period
- Incontestability
- Application and statements
- Evidence of insurability
- Misstatement of age provision
- Certificates
- Benefits and eligibility