Health Reform Blog

High-Risk Pool Programs Take a Step Forward

Update: We are gratified by the response we have seen from the states this important provision of the Affordable Care Act and look forward to working together to get people who have been denied coverage for so long, access to some much needed relief through the creation of temporary high-risk pools. Whether states create these pools or the federal government creates them for states, the pools will be paid for by 100 percent federal dollars and mostly importantly – uninsured people around the country will soon have access to another affordable coverage option.

We value the input of our state partners and are heartened by the strong show of support we have seen already for getting the critical benefits of the Affordable Care Act to the American people as quickly as possible.  This is a very   state-friendly law that is designed to give states important resources and flexibility to implement the new law.

We will work closely with the states in the coming weeks and months to help their residents who have been denied coverage to finally have affordable options.

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Right now, in 45 states across the country, insurance companies can discriminate against people based on their pre-existing conditions – leaving many Americans unable to get health insurance.

The Affordable Care Act creates a high-risk pool program to help adults who are uninsured and have a pre-existing condition get insurance as soon as possible.  The program is a bridge to the health insurance exchanges that will be available in 2014.

Earlier this month, Secretary Sebelius sent a letter to states asking how each would like to participate in the high-risk pool program.  The program was designed to give states the flexibility to carry out their own program, or have HHS do it for them.  Specifically, states can:

• Operate a new high risk pool alongside a current state high risk pool;
• Establish a new high risk pool (in a state that does not currently have a high risk pool);
• Build upon other existing coverage programs designed to cover high risk individuals;
• Contract with a current HIPAA carrier of last resort or other carrier, to provide subsidized coverage for the eligible population; or
• Do nothing, in which case HHS would carry out a coverage program in the state.

As a former Governor and State Insurance Commissioner, Secretary Sebelius understands the important role that states have in improving the health security of American families.  Over the past several weeks, HHS has held several briefing calls and has been working individually with states to explain how the program will work and the different options for carrying out.  Yesterday alone, over 350 people representing all 50 states, and Washington, D.C. participated in a call with HHS about implementation and the new high-risk pool program.

So far, 43 states have told HHS how they would like to participate; 28 have indicated they would like to run a high risk pool program, and 15 have said they would prefer that HHS administer the program for their residents. 

Regardless of whether or how a state participates, the bottom line is that all Americans who meet the eligibility criteria will have the opportunity to join a high risk pool program.

More information on the high-risk pool can be found here.

Here’s a list of what states have decided as of 4:15 p.m. today:

States that intend to operate their own high-risk pool program:

Alaska
Arkansas
California
Colorado
Connecticut
District of Columbia
Illinois
Kansas
Kentucky
Maine
Maryland
Massachusetts
Michigan
Missouri
Montana
New Hampshire
New Jersey
New Mexico
New York
North Carolina
Ohio
Oklahoma
Pennsylvania
Rhode Island
South Dakota
Vermont
Washington State
Wisconsin

States that have elected to have HHS run the high-risk pool program:

Alabama
Delaware
Georgia
Hawaii
Idaho
Indiana
Louisiana
Minnesota
Mississippi
Nebraska
Nevada
South Carolina
Tennessee
Wyoming
Virginia

One Month Later: Making Health Insurance Reform a Reality

Just over a month ago, President Obama signed the Affordable Care Act into law. This landmark legislation gives the American people the control over their own health insurance they need and deserve -- by holding insurance companies accountable, bringing down costs and giving all Americans more insurance choices.

The day of that signing the President made one thing clear – he expects his Administration to deliver the benefits of reform to the American people as effectively and expeditiously as possible.  As the President said, “we need to get this right.”   Over the last month, we’ve begun doing that.  We’ve made significant progress in implementing the new law and making reform a reality for millions of Americans.  

Here’s what we’ve done:

We’ve Held Insurance Companies Accountable
Effective September 23, the Affordable Care Act prohibits some of the worst insurance company practices, including the practice of rescinding coverage from policyholders when they become sick and need it most.  After media accounts indicated that an insurance company actively worked to rescind health care coverage for women diagnosed with breast cancer, the Administration called on this company to end this practice and immediately comply with the new law. Two days ago, the insurance industry announced they will immediately follow the new rules and not wait for the new law to make it illegal. We’re glad to hear that the insurance companies are now doing the right thing -– and we intend to hold them to their word.

We’ve Helped Small Businesses Lower Costs 
Across the country, small businesses are struggling to provide their employees with affordable, quality health benefits. Rising costs have forced many small businesses to charge their employees more for care, or eliminate benefits altogether.

The Affordable Care Act provides tax credits to small employers that purchase health insurance for employees. An estimated 4 million small businesses nationwide could qualify for the tax credit, which will provide a total $40 billion in relief for small firms over the next 10 years. Small businesses can take advantage of the tax credit immediately and the Internal Revenue Service has begun delivering postcards to more than four million small businesses and tax-exempt organizations to make them aware of the tax credit. Learn more about the tax credits here.

We’ve Expanded Coverage for Young Adults
In the past, college graduations were a time to celebrate and a time to worry. For many young adults, graduating from college meant losing health insurance coverage.

This year, the Affordable Care Act will allow many young adults to stay on their parents’ health care plan until age 26. This provision takes effect on September 23, 2010. Under the new law, some young adults graduating from college this spring could risk losing their health insurance before the provision takes effect, only to be added back onto their parents’ policy the next time their parents’ plan comes up for renewal on or after September 23rd.  On April 19, Secretary Sebelius called on insurance companies to begin covering young adults voluntarily before the September 23 implementation date. 65 insurance plans, including some of the largest carriers in the country have agreed to do so. This will help ensure many Americans graduating from college this spring can stay on their parents’ health insurance plan.

On April 27, the Internal Revenue Service released new guidance specifically stating that children can be covered tax-free on their parents' health insurance policy. This new guidance provides important information to businesses and includes information on incentives the Affordable Care Act provides for employers to immediately extend health insurance coverage to young adults.

We’ve Provided Relief for Americans with Pre-Existing Conditions
Before reform, parents across America worried how they would provide coverage to their children if they had a pre-existing condition. Through no fault of their own, these children were locked out of the insurance marketplace.

This year, provisions in the Affordable Care Act prohibiting health insurers from excluding coverage of children because of preexisting conditions take effect. When questions were raised about whether insurers would work to avoid covering children with pre-existing conditions, Secretary Sebelius called on the nation’s health insurance companies to provide coverage to these vulnerable Americans. On March 29, health insurance companies agreed to ensure children with pre-existing conditions were not denied coverage.

Adults with pre-existing conditions also suffered under the old insurance industry rules that allowed insurance companies to charge sky-high rates or deny coverage altogether. 

Discrimination based on pre-existing conditions will be banned in 2014.  In the meantime, a new temporary high risk pool program will provide immediate relief. The high risk pool program will offer affordable health insurance coverage to people who are uninsured because of pre-existing conditions. States may choose whether and how they participate in the program, which is funded entirely by the Federal government. If a state chooses not to participate, eligible residents of the state will be able to obtain insurance through a federal high risk pool.

Plans are underway to create the national and state high-risk pools by July 1st.  In early  April, the Department of Health and Human Services asked states to declare how they intend to participate in the program by April 30, 2010. We anticipate that many states will decide to offer their citizens the national high risk pool, but regardless of whether or how a state participates, all Americans who meet the eligibility criteria will have the opportunity to join a high risk pool.

We’re Protecting Your Premium Dollars
For too long, insurance companies could spend your premium dollars on things like CEO salaries, advertising and overhead – instead of improving care and improving patient health.

A new policy in the Affordable Care Act – called the medical loss ratio -- creates new incentives for insurance companies to be more efficient, and ensure that consumer premiums are being used for medical care, not excessive and unnecessary administrative costs. 

The law requires large group plans to spend 85 percent of your premium dollars (80 percent in the small group market) on medical care.  It also calls for the National Association of Insurance Commissioners (NAIC) to establish uniform definitions and methods for calculating the medical loss ratio. While the law calls for NAIC to deliver recommendations on how to do this by December, 2010, Secretary Sebelius called on NAIC to deliver its recommendations by June 1, 2010. NAIC has agreed to the accelerated timeline.

Throughout our work to implement this legislation, we’ve made communicating with you one of our top priorities. From town hall meetings with President Obama, to webcasts with Secretary Sebelius and blog posts here on the White House blog, we have worked to answer your questions about this important new law. In the weeks ahead, we’ll be expanding our public education campaign and doing more to ensure you have the facts about reform.

Access to Coverage for Young Adults

Young adults often have a hard time getting affordable health insurance.  Some go into jobs that don’t offer health benefits, some can’t afford it, and some are denied it because they have a pre-existing condition.  Those days are coming to an end.  The Affordable Care Act will require insurers to allow young adults under age 26 to get health coverage through their parents, starting this fall – helping millions of young adults to get insurance.

But Secretary Sebelius isn’t waiting –she sent a letter urging insurers to allow young adults under age 26 to keep their coverage now. Many insurers have agreed to do just that. This is great news for many college students, who risk losing their health insurance when they graduate this spring and summer. What’s more, the Affordable Care Act raises the age for children who can be covered tax-free on their parents' health insurance policy.

To help you understand what this means for you, here are some resources that will give more information:

• Fact sheet on how the Affordable Care Act offers young adults greater control over their health care
  
• Letter from HHS Secretary Kathleen Sebelius encouraging insurers to provide coverage for college graduates in advance of the required date of September 23
  
• Growing list of insurers agreeing to implement the provision before September 23
  
• Fact sheet on the new IRS guidance for covering young adults
  
• New guidance from the IRS stating that children can be covered tax-free on their parents’ insurance policy.

WellPoint's Announcement Letter

Secretary Kathleen Sebelius released the following statement tonight on WellPoint's announcement that it intends to end the practice of rescinding patients' coverage in advance of the Affordable Care Act's requirement that insurers stop this practice starting this fall. WellPoint's announcement comes after Secretary Sebelius sent a letter on April 22 urging the company to immediately stop the practice of rescinding coverage for patients who become ill.

The Secretary said, "The last thing someone who is really sick needs to hear is that they are being dropped by their insurer because they got sick and tried to use the policy they purchased. I was encouraged to learn today that WellPoint has announced it will act to stop rescissions and no longer engage in this practice as of the end of this week. I urge other insurers to also accelerate the Affordable Care Act's deadline for ending this practice and stop rescinding patients' policies immediately."

More Support for Young Adults

When health insurance reform became the law of the land, we knew our work was just beginning.  While passing the law was a tremendous accomplishment, the President and his Administration are now focused on the next challenge: making sure the law is implemented smoothly, quickly, and effectively.  In fact, the day after the bill passed, the first thing the President asked of his senior staff was “Where are we on implementation?”

One of the most important provisions in health reform for young adults and their families is the new provision that allows young adults to stay on their parents’ health care plan until age 26.  This provision takes effect on September 23, 2010, and it could help more than 4.7 million uninsured young Americans.

But we knew that some young adults graduating from college this spring could risk losing their health insurance before the provision takes effect, only to be added back onto their parents’ policy the next time their parents’ plan comes up for renewal on or after September 23rd.  That was bad news for families and bad news for insurance companies too.  Removing an individual from a health insurance plan and then adding them back on a few months later takes time, and it costs money.

That’s why on April 19, Health and Human Services Secretary Kathleen Sebelius called on leading insurance companies to begin covering young adults voluntarily before the September 23 implementation date required by the new health reform law.  Early implementation would avoid gaps in coverage for new college graduates and other young adults and save on insurance company administrative costs of dis-enrolling and re-enrolling them between May 2010 and September 23, 2010.   Early enrollment will also enable young, overwhelmingly healthy people who will not engender large insurance costs to stay in the insurance pool.

And we’re pleased to report that the following insurance companies are doing just that:

Blue Cross and Blue Shield of Alabama
Blue Cross Blue Shield of Delaware
Blue Cross and Blue Shield of Arizona, Inc.
Blue Cross and Blue Shield of Florida
Arkansas Blue Cross and Blue Shield
Blue Cross and Blue Shield of Hawaii
Blue Shield of California
Blue Cross of Idaho Health Service
Regence Blue Shield of Idaho
Wellmark Blue Cross and Blue Shield of Iowa
Health Care Service Corporation
Blue Cross and Blue Shield of Kansas
Blue Cross Blue Shield Association
Blue Cross and Blue Shield of Louisiana
WellPoint, Inc.
CareFirst BlueCross and BlueShield
Blue Cross and Blue Shield of Massachusetts
Blue Cross and Blue Shield of Kansas City
Blue Cross and Blue Shield of Michigan
Blue Cross and Blue Shield of Montana
Blue Cross and Blue Shield of Minnesota
Blue Cross and Blue Shield of Nebraska
Blue Cross & Blue Shield of Mississippi
Horizon Blue Cross and Blue Shield of New Jersey, Inc.
HealthNow New York, Inc.
The Regence Group
Excellus Blue Cross and Blue Shield
Capital BlueCross
Blue Cross and Blue Shield of North Carolina
Independence Blue Cross
BlueCross BlueShield of North Dakota
Highmark, Inc.
Blue Cross of Northeastern Pennsylvania
BlueCross and BlueShield of Tennessee
Blue Cross and Blue Shield of Vermont
Blue Cross & Blue Shield of Rhode Island
Premera Blue Cross
Blue Cross and Blue Shield of South Carolina
Blue Cross and Blue Shield of Wyoming
Kaiser Permanente
Cigna
Aetna
United
WellPoint
Humana
Capital District Physicians’ Health Plan (CDPHP), Albany, New York
Capital Health Plan, Tallahassee, Florida
Care Oregon, Portland, Oregon
Coventry Healthcare, Inc.
Emblem Health, New York, New York
Fallon Community Health Plan, Worcester, Massachusetts
Geisinger Health Plan, Danville, Pennsylvania
Group Health, Seattle, Washington
Group Health Cooperative Of South Central Wisconsin, Madison, Wisconsin
Health Partners, Minneapolis, Minnesota
Independent Health, Buffalo, New York
Kaiser Foundation Health Plan Oakland, California
Martin’s Point Health Care, Portland, Maine
New West Health Services, Helena, Mt
The Permanente Federation, Oakland, California
Priority Health, Grand Rapids, Michigan
Scott & White Health Plan, Temple, Texas
Security Health Plan, Marshfield, Wisconsin
Tufts Health Plan, Waltham, Massachusetts
UCARE, Minneapolis, Minnesota
UPMC Health Plan, Pittsburgh, Pennsylvania 

Today, we marked another step forward in our work to provide coverage to young adults with the release of new guidance from the Internal Revenue Service specifically stating that children can be covered tax-free now on their parents' health insurance policy.  The new guidance also discusses incentives the Affordable Care Act provides for employers to immediately extend health insurance coverage to young adults.

This new guidance will help employers as they work to provide better benefits to their employees and cover more Americans.  To learn more, check out the press release and fact sheet (pdf).

Eliminating Obstacles to the Care Women Need

The old rules governing our health insurance market hurt families across the country, and women in particular suffered in a system that allowed discrimination and failed to provide affordable coverage options for all Americans.  Consider Jody Miller’s experience, as recently reported by National Public Radio:

Take the case of Jody Miller, an exercise physiologist who wanted to have a baby. She had insurance, but it didn't cover most of her infertility costs. So, she paid about $22,000 out of pocket.

After her triplets were born, she and her husband went looking for a less expensive insurance policy. Miller says one company told them, "Fine, we're happy to insure your children, but because of your infertility, we won't insure you or your husband." That was even without infertility coverage. Other insurers denied her as well.

"I'm as healthy as they come," Miller says. She wound up in a special Maryland state pool for people who can't get insurance.

Thankfully, the Affordable Care Act will help eliminate these hurdles and make stories like Jody’s a thing of the past.  The new law will prohibit insurance companies from denying coverage to any woman because of a pre-existing condition, excluding coverage of certain conditions or discriminating against her because of her gender.

The law will also give women and their families the affordable health choices they need and access to critical preventive services.  Under the Affordable Care Act:

• This year, new insurance plans must cover prevention and wellness benefits at no charge.
• Insurance plans in the new exchange must cover maternity benefits.
• Health insurance exchanges will make it easy for all Americans to compare prices, benefits and performance of health plans to decide which quality affordable option is right for themselves and their families.
• Women and families who cannot afford health insurance will be eligible for tax credits.
• The law requires coverage of not only basic pediatric services under all new health plans, but also oral and vision needs for children, starting in 2014.
• This year, the law will prohibit insurance companies from denying children coverage based on preexisting conditions.
• This year, all lifetime limits on how much insurance companies cover if women get sick will be eliminated and the law bans insurance companies from dropping women from coverage when they get sick.

Check out this fact sheet to learn more about how women will benefit from the Affordable Care Act.

Note: This blog was cross-posted on Whitehouse.gov.

Actuary Report Reaffirms that Affordable Care Act will Strengthen Medicare, Extend Coverage to Millions of Americans

Yesterday, the Office of the Actuary released an analysis of the new health insurance reform law.  Here is Secretary Sebelius on the report:

"Congress and the President have enacted landmark legislation that puts American families and businesses back in control of their own health care. The analysis by the independent Office of the Actuary reaffirms what the Congressional Budget Office has already said: the Affordable Care Act will cover more Americans and strengthen Medicare by cracking down on waste fraud and abuse, modernizing payment systems and improving benefits by providing free preventive services, supporting innovations that help control chronic disease and closing the prescription drug donut hole. The Actuaries also find that under the new law, the life of the Medicare trust fund is extended by 12 years while reducing annual Medicare premiums by nearly $200 per senior in the coming years.  The Affordable Care Act will improve the health care system for all Americans and we will continue our work to quickly and carefully implement the new law."

Sebelius Urges WellPoint to Stop Dropping Coverage for Women with Breast Cancer

Yesterday, Reuters reported that WellPoint has been dropping health insurance coverage for women with breast cancer – a practice that will be illegal beginning this fall under the Affordable Care Act.

Secretary Sebelius has sent WellPoint a letter urging them to stop now.

In her letter, Sebelius writes, “WellPoint should not wait to end the unconscionable practice of deliberately working to deny health insurance coverage to women diagnosed with breast cancer.  I urge you to immediately cease these practices and abandon your efforts to rescind health insurance coverage from patients who need it most.”

Click here to read the letter.

Covering Americans with Pre-Existing Conditions

HHS is working closely with states, insurers, providers, and other partners as we implement the new health reform law to ensure benefits reach the American people as quickly as possible. 

As part of ongoing outreach, HHS officials talked with states today about the temporary high risk pool program.

The new high-risk pool program is an important first step in ensuring Americans have access to affordable, quality health care.  Starting this year, individuals who have been uninsured for at least six months and have a pre-existing condition will be able to get health insurance through the temporary high-risk pool program.

Secretary Sebelius has asked states to let HHS know by April 30 whether they want to participate in the program, which is funded entirely by the Federal government.  If states choose not to participate, HHS will carry out a coverage program in the state.

Click here to see the fact sheet on the high-risk pool.