December 11, 2013 By: Nancy R. Mathieson*
You may be following the story of South Carolina cancer patient Bill Elliott, whose insurance was recently cancelled as his carrier considered his cancer “beyond a catastrophic pre-existing condition.” Elliott was given one choice, a higher premium plan, however, he chose instead to pay the ACA fine and “let nature take its course.” After hearing his story, Chicago insurance broker C. Steven Tucker contacted Elliott and advised him about the1997 Health Insurance Portability and Accountability Act (HIPPA) 104-191 Section 2742. This federal Act requires guaranteed renewability of individual health insurance coverage unless specific conditions are met, such as non-payment of premiums or fraud. Citing the law, Elliott contacted state Governor Nikki Haley and his insurance carrier, and within 24 hours his insurance was re-instated at the current premium level.
Steven Tucker relayed this story last week at an ACA presentation before doctors at Libertyville-based Condell Hospital. According to Tucker, 1997 HIPPA regulations, put into effect during the Clinton administration are iron-clad, and nothing added into the June 2010 Federal Register by HHS Secretary Kathleen Sebelius narrowing the “grandfathering” provisions of existing policies under the ACA trumps HIPPA law.
While insurance companies have been painted over the past years as bad guys for not covering patients with pre-existing health conditions, the truth is the state of Illinois has provided guaranteed issued insurance coverage for pre-existing conditions (“high risk pools”) through the Illinois Comprehensive Health Insurance Plan (ICHIP) for decades. Illinois insurers support these pools through fees levied and collected by the state pursuant to Illinois public law(215ILCS 105/). This coverage, administered by Blue Cross Blue Shield, provides health insurance for Illinois residents who cannot obtain individual coverage due to medical conditions and to cover residents with prior health coverage who meet federal rules for eligibility.
Steven Tucker speaks frequently in Illinois about the ACA; his presentation, “The Truth About Obamacare” is available on DVD. Here is his run-down of what Illinois doctors and their patients should expect going forward under the ACA:
Medicaid expansion and payment to doctors. IllinoisWatchdog.org reports that since mid-November, almost 20,000 Illinois residents have signed up for Medicaid under ACA provisions, which is fifteen times the number who have signed up for private insurance in this marketplace. While 2.7 million people in Illinois are currently enrolled in Medicaid, the Department of Healthcare and Family Services (HFS) estimates we will have 513,000 additional Medicaid recipients by 2017. Of that total, an estimated 342,000 will be newly eligible under the ACA and 171,000 will be individuals who were previously eligible but had not enrolled in the program. Medicaid re-imbursement rates to doctors are notoriously low, and all indications show federal budget pressures for 2014 going forward will not change this reality anytime soon.
Another concern to doctors is while the federal government is committed to paying 100% of the costs of ACA Medicaid expansion through 2016, falling to 90% by 2020, it is likely future federal budget cuts could reduce Medicaid funding by cutting into that federal match.
Doctors losing their own healthcare coverage. Tucker pointed out that Physicians Benefits Trusts Life Insurance Company (PBT) will discontinue offering individual and small group plans to doctor groups such as the Illinois State Dental Society at the end of the year for the stated reason: “….necessitated primarily by the passage of the ACA. The Act imposes substantial regulatory and financial requirements upon individual and small group health insurers.” When PBT was questioned on how this decision appears to be the opposite of what the ACA was designed to achieve, it stated, “(under ACA) insurers will be prohibited from denying coverage to anyone due to their health history….. Exclusions for pre-existing conditions will no longer be allowed and a carrier can no longer surcharge an insured higher premium due to their health. Combined with financial requirements (including assessments and taxes intended to support the ACA’s infrastructure), smaller carriers will be economically challenged to remain viable as a company in the coming years.”
Routine testing of patients may be deferred. The press has reported those consumers who have had success navigating Healthcare.gov are experiencing the sticker shock of higher premiums and higher deductibles for plans similar to ones they already own. Should consumers opt for the higher deductible plans to keep their premiums low, doctors fear patients may defer much of their typical routine testing, as most or all these costs will be coming out of their own pockets.
Higher insurance premiums expected for 2014. Although the Obama administration has given individuals a reprieve from cancelled health insurance policies for the next year (should their carriers re-instate their policies), patients shouldn’t assume their premiums will remain the same. Tucker advised consumers get ready for additional premium rate increases in the New Year.
Nancy R. Mathieson follows Illinois politics and public policy, and has held management positions at the New York Stock Exchange and Truth in Accounting.