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March 29th 2010
A Message from Burke King on Health Care Reform
As you know, last week President Obama signed into law H.R. 3590, the Patient Protection and Affordable Care Act. And Congress has passed the reconciliation bill making additional changes to the new law.
The new legislation represents over 2,000 pages of new federal law that will touch virtually every facet of the health care industry, including a variety of near-term and longer-term changes to the health insurance marketplace.
Because of the size and scope of the legislation, and the fact that the law requires federal departments to issue more detailed regulations for implementation, it will take time to fully analyze and digest the changes. As we learn more and prepare for the post-reform environment, you can expect from us in the coming weeks and months a steady stream of information summarizing the new requirements you will need to know.
In the meantime, it may be helpful to understand from a big-picture timeline perspective when some of the key requirements are set to be effective:
Several near-term requirements will impact all contracts for new sales and renewals beginning in approximately 6 months. While there is a provision that "grandfathers" existing plans and allows members to keep their products, the new law requires providers to add several new elements to all contracts regardless of whether the plan is "grandfathered". Including elements like:
- Allowing members to add dependents up to age 26 regardless of student status
- Eliminating lifetime benefit limits on policies
It is important to note that our preliminary analysis of the "grandfathering" provision indicates that if a subscriber changes products after March 23, 2010, he or she will likely be subject to additional product requirements that are effective in the future. For new sales and subscribers who change policies after approximately 6 months, we will be required to make additional changes, such as removing any member cost sharing for "preventive" benefits, as defined by the legislation.
Other, more comprehensive insurance reforms will begin in 2014. Many of the more significant changes to the insurance marketplace-such as rating reforms, the individual and employer mandates, Medicaid expansions, the insurance exchanges, and the insurance subsidies-are set to be effective on January 1, 2014.
Additionally, there are many other elements that will be phased-in during multi-year implementation periods between now and 2018.
We know that you have many questions as we are all absorbing these new laws. We will continue to provide updated information as it is available. Additional background information is available on the Health Action Network at www.healthactionnetwork.com.