In a step that will affect healthcare organizations throughout the country, the U.S. Department of Health and Human Services (HHS) recently issued a final rule implementing five key consumer protections from the Affordable Care Act. Under the rule, all individuals and employers have the right to purchase health insurance coverage regardless of health status. In addition, insurers are prevented from charging discriminatory rates to individuals and small employers based on factors such as health status or gender, and young adults have additional affordable coverage options under catastrophic plans.
For providers, the HHS rule is expected to increase demand for healthcare services from the more than 30 million Americans who are currently uninsured for one reason or another. Now, the HHS is mandating that most health plans include the following key provisions by 2014:
- Guaranteed availability. Nearly all health insurance companies offering coverage to individuals and employers will be required to sell health insurance policies to all consumers. No one can be denied health insurance because of current or prior illness.
- Fair health insurance premiums. Health insurance companies offering coverage to individuals and small employers will only be allowed to vary premiums based on age, tobacco use, family size, and geography. Basing premiums on other factors will be illegal. The factors that are no longer permitted in 2014 include health status, past insurance claims, gender, occupation, how long an individual has held a policy, or size of the small employer.
- Guaranteed renewability. Health insurers can no longer refuse to renew coverage because an individual or an employee has become sick. Consumers have the option to renew coverage.
- Single risk pool. Health insurers will no longer be able to charge higher premiums to higher cost enrollees by moving them into separate risk pools. Insurers are required to maintain a single statewide risk pool for the individual market and single statewide risk pool for the small group market.
- Catastrophic plans. Consumers will have access to a catastrophic plan in the individual market. Catastrophic plans generally have lower premiums, protect against high out-of-pocket costs, and cover recommended preventive services without cost sharing.
With these rules slated to go into effect in 2014, hospitals, physician groups and other providers should begin planning how to address the likely increase in patient volume in the new state and national healthcare climate.