Over the past few weeks we have all noted from press accounts that some 5 million Americans have seen cancellation notices from their health insurance carriers regarding plans that were scheduled to renew on or after January 1, 2014. Why has this happened?
Under the Patient Protection and Affordable Care Act [ACA, or Obamacare], the federal law defines what health insurance carriers have to offer to policy holders or prospective policy holders as “qualified health plans.” These qualified health plans [QHPs] are defined as,
PATIENT PROTECTION AND AFFORDABLE CARE ACT OF 2010
DEFINITION OF QUALIFIED HEALTH PLAN
(a) Qualified Health Plan- In this title:
(1) IN GENERAL- The term `qualified health plan’ means a health plan that–
(A) has in effect a certification (which may include a seal or other indication of approval) that such plan meets the criteria for certification described in section 1311(c) issued or recognized by each Exchange through which such plan is offered;
(B) provides the essential health benefits package described in section 1302(a); and
(C) is offered by a health insurance issuer that–
(i) is licensed and in good standing to offer health insurance coverage in each State in which such issuer offers health insurance coverage under this title;
(ii) agrees to offer at least one qualified health plan in the silver level and at least one plan in the gold level in each such Exchange;
(iii) agrees to charge the same premium rate for each qualified health plan of the issuer without regard to whether the plan is offered through an Exchange or whether the plan is offered directly from the issuer or through an agent; and
(iv) complies with the regulations developed by the Secretary under section 1311(d) and such other requirements as an applicable Exchange may establish.
These qualified health plans were further defined by the US Department of Health and Human Services in the following regulation http://www.gpo.gov/fdsys/pkg/FR-2012-03-27/pdf/2012-6125.pdf Federal Register / Vol. 77, No. 59 / Tuesday, March 27, 2012
In large part, these cancellation notices were driven by federal law and regulation concerning this issue of a qualified health plan, as every plan sold on or after 1/1/2014 needs to be a qualified health plan. These cancellation notices sent shock waves through the White House and Congress, at the very same time as the controversy about the federal government’s healthcare.gov website and its problems. Suffice it to say, those members of Congress facing voters in 2014 are concerned about the chaos that appears to reign in Washington.
Last week the President announced his intention to allow state insurance commissioners to decide if they wanted to allow those who currently had plans that did not meet the test of a qualified health plan under the ACA, to keep their current plans. The President does not have the unilateral authority to change the federal law. Only the Congress can enact legislation changing this law, assuming then that the President signs such a proposed change into law.
Several state insurance commissioners have already said they would not allow the change the President discussed last week, and others have said they would consider changes but have not announced decisions. Others ridiculed the President’s comments as “passing the buck” to insurance commissioners who, like the President, had no authority to unilaterally change a federal law.
The House of Representatives last Friday passed H R 3350, the “Upton Bill,” by a vote of 261-157. The bill would go a step further than the plan Obama announced last week by allowing insurance companies to sell the old plans to customers who previously had them, as well as new customers, for another year. The President’s plan would only apply to those customers enrolled in the plans before the cancellation notices went out. The President has already said he would veto HR 3350 if it reached his desk and there is little belief the HR 3350 would pass the Senate. There are other legislative proposals rising in the Senate.
The health insurance industry has not reacted well to the machinations in Washington, for understandable reasons. The ACA and federal regulation defines a qualified health plan in law, and they are bound by law to follow it until changed by Congress. The notion that state insurance commissioners would agree to give insurance companies a pass on obeying a federal law does not give insurance companies legal protection against litigation from others as long as the current federal law exists.
The upshot of all of this in light of our creation of association-based private health insurance marketplaces for our members remains intact and more important than ever.
- Regardless of what changes occur either in the insurance industry or from government, our marketplaces have the flexibility to continue to offer qualified, legal benefits, carriers and plans to our members. We are not tied to any single carrier or plan that could change and require us to go through all the work to change our program.
- We offer all available benefits, carriers and plans in a single, competitive environment and allow our association members, with professional guidance, to choose their benefits, carrier and plans they want to offer in their company to their employees. Regardless of what happens in government, our members will need to offer benefits to their employees;
- While we have these association-based, private marketplaces, our private sector solution to benefit offerings remains intact, regardless of government not seeming to operate its own marketplace. Ours works, everyday, and serves our members;
- While we have these association-based, private marketplaces, we provide our members with up-to-date information about what is going on in the insurance industry and from government so the chaos government has created can be met with calm, reasoned and intelligent advice about how to plan a sound benefits program in their companies for their employees – brought to them by their association and its benefits partners;
- Our association-based, private marketplaces rely on the cooperation of your association’s local insurance brokers and the brokers of your members to work with us to place their business in your association marketplace. No local broker loses business because your association operates this marketplace. An association executive developed this marketplace with insurance professionals knowing that we needed to work with local brokers and want their participation.
- Do Not Wait? The ACA will be the subject of debate and political activity from now through the 2016 Presidential election and perhaps longer. Congress may or may not change the law and three federal agencies will continue their rulemakings that have already exceeded 25,000 pages. Our members need sound guidance and a competitive marketplace within which to make intelligent and informed decisions now. Associations can provide that now as well.
Vital though near-term effectiveness is, these association-based, private marketplaces hold a longer-term potential—they can help reshape the organization, delivery, and financing of insurance.
Our objective is to provide employers and employees with the ability to choose the benefits and insurance plans that best matches their preferences. We want insurers to compete with one another. We are convinced that if employers and employees can shop freely for the plans they want and insurers must compete actively for their business, everyone will gain: customers will get coverage that matches their preferences, and insurers will become more cost and quality conscious. The association is at the center of bringing these choices to their members.
My former association has its landing page open now > http://www.cemamarket.com/
We are now working on the construction of the HBRACT marketplace >http://www.hbractmarketplace.com
We would be happy to meet with your group and help you bring to your members what other associations have already done and are in the process of doing now.