Regulators puzzling out what insurers must do under new health law

May 25 2010

The Washington Post reports that regulators are "trying to resolve" which insurance plans must comply with the health law's new requirements. "In keeping with President Obama's promise that you can hold on to your insurance if you like it, the new law exempts existing health plans from many of its provisions. But the law leaves it to regulators to decide how much a health plan can change without giving up its grandfathered status." The answer could test how Americans are affected by the law. "Some consumer advocates say that grandfathering could become a giant loophole through which many health plans escape aspects of the overhaul."

"At issue is whether health plans covering millions of Americans must meet requirements such as covering screenings for breast cancer and other diseases without charging co-payments, and limiting annual out-of-pocket expenses. Depending on the outcome, grandfathered plans could continue tailoring their own benefits, or they could be required to offer at least a minimum set of benefits to be defined by the federal government." Employers would like to change some minimal aspects of their plans without losing their grandfathered status, but all plans will have to adhere to some aspects of the law. "For example, even plans that were in place when the law was enacted must eliminate lifetime limits on the dollar value of coverage and enroll dependents up to age 26." But, employers who pay for health care from their own accounts won't have to adhere to a minimum benefits package (Hilzenrath, 5/24). 

Related KHN story: Health Law's "Grandfather" Clause Could Deprive Consumers Of Key Benefits (Galewitz and Carey, 5/10).

The Washington Post, in a separate story: Implementation of the new law continued with the Obama administration last week telling small biotech firms how they can apply for grants and tax credits, worth up to $5 million each. "In a news briefing, an administration official said she did not know how much it will cost to administer the $1 billion program, which calls for the government to review each application's scientific merits. The announcement was the latest in a series by the administration explaining how the new law is being implemented and showcasing provisions that deliver tangible benefits to various constituencies. Earlier, the administration unveiled rules governing tax credits for small businesses that insure their workers, financial aid for companies that cover early retirees and opportunities for young adults to stay on their parents' health plans." The credits are for so-called "therapeutic discovery projects." Other credits give money for therapies that show "potential to treat unmet needs or making progress toward curing cancer" (Hilzenrath, 5/24).