Health Reform Blog

Giving Young Adults More Peace of Mind

Ed. Note: On Thursday at 1:00PM EDT, AARP President Jennie Chin Hansen and other health experts from HHS will take your questions in a live online chat about how reform will benefit Seniors. Submit your questions to healthreform@hhs.gov. Watch live at www.hhs.gov/live.

Many young adults under the age of 26 have traditionally had a difficult time getting access to – and affording – health coverage. In fact, young adults between 19 and 29 make up nearly one-third of the uninsured population. But thanks to a provision in the new health reform law, many Americans under 26 years old now have the option of staying on their parents’ health insurance plan starting this fall.
 
And that’s not all. As a result of conversations between the Administration and health insurers, we’ve worked with some major insurers like WellPoint, United Healthcare and others who have voluntarily decided to bridge the coverage gap between now and the fall, when the new law becomes effective.
 
This means that more young adults can stay on their parents’ plan – giving greater peace of mind to millions of American families and to a group of young people who have traditionally forgone health insurance.
 
HHS also sent a letter to all the major insurance companies, offering to work with each of them to expand this opportunity even further.  The letter talks about closing the gap in coverage for college graduates or young adults whose birthday in 2010 made them ineligible to continue on their parents’ plans. 
 
The new provision in the health reform law gives many young adults the security and stability they need to make choices about their next step in life, without having to worry about falling through the cracks of our health insurance system.

We are glad that some insurers have announced that adult children will receive this helpful benefit before this September deadline, and we hope that others will join them.

You can read a copy of the letter below:

April 19, 2010
Dear _______:

I am writing to urge you to join leading insurance carriers and employers in providing seamless insurance coverage to those under 26 who have a right to maintain coverage under their parents' policies effective for plan years beginning on or after September 23, 2010. 

As you know, the Affordable Care Act enables young adults to remain on their parents' policies until they turn 26.  This essential provision of the Act will enable young, overwhelmingly healthy people to stay in the insurance pool and retain insurance coverage at an important moment as they begin their adult lives and launch their careers.   

Under the terms of the new law, this provision does not take effect until September 23, 2010.  In those states which do not already enable young adults to remain on their parents policies until the age of 26, college students could be dis-enrolled when they graduate from college in May of this year, even though the law would provide them the opportunity to re-enroll as early as September 23, 2010.  Similarly, those under 26 who are not in college but who reach an age disqualifying them for coverage under their parents' policy could be dis-enrolled when they reach that age, even though they have the right to be re-enrolled as early as September 23, 2010.

Enabling young adults to remain on their parents' policies between May, 2010 and the new plan year beginning on or after September 23, 2010, rather than dis-enrolling them in May and then re-enrolling them in six or more months, has substantial benefits for all involved.  This action would enable young, overwhelmingly healthy people, who will not engender large health care costs, to stay in the insurance pool and retain important insurance coverage.  Taking this step will also save money for your companies by avoiding the administrative costs of dis-enrolling and then re-enrolling young adults.  Avoiding this gap would also eliminate an unnecessary inconvenience and disruption in health insurance coverage for both young adults and their parents. 

I have been encouraged by and appreciate the willingness of some leading insurance carriers and employers that have previously agreed to maintain coverage for young adults who could be dis-enrolled in May.  Taking this step is good business and will offer relief to grateful families across the country.

I look forward to hearing your thoughts regarding this matter by April 26, 2010.  I hope you agree that a public-private effort, including both insurers and employers, to enable young adults to maintain seamless coverage would produce substantial benefits for all concerned.                

Sincerely,

Kathleen Sebelius

Blue Cross Blue Shield Does the Right Thing

Earlier this evening, the Blue Cross Blue Shield Association announced its intention to have all the Blue Cross Blue Shield plans in the country voluntarily extend coverage of adult children in all cases where coverage of adult children in all cases where coverage is set to expire because of age or loss of student status. That’s great news for the thousands of young adults set to graduate from college over the next few weeks.

While the new law doesn’t require insurers to take this step until September, Blue Cross Blue Shield joins a growing list of insurers choosing to do the right thing and adopt the policy right away. Other companies stepping up include Wellpoint, United Health, Kaiser Permanente, and Humana.

Just yesterday, Secretary Sebelius sent a letter to health insurers across the country urging them to voluntarily provide this benefit to their eligible customers ahead of the September date. We’re gratified to see so many agreeing to do so – and we know that thousands of young adults and their families are, too. It’s the right thing to do.

Addressing Disparities in Health Reform

Earlier this week, we got the latest evidence of why it was so important to pass the Affordable Care Act.  According to reports released on Tuesday, significant disparities persist in both Americans’ access to care and quality of care.

In 2009, minorities were less likely to have insurance and less likely to get the treatments they need. Americans without insurance are much less likely then those with private insurance to obtain recommended care – especially preventive services. The lack of care can lead to chronic disease and even death. And the reports included disconcerting news about the quality of care.

By strengthening our health care system for all Americans, the Affordable Care Act goes a long way to address these disparities in quality and access to health care.

The new law will ensure more Americans have access to affordable, quality insurance and will prohibit denying people coverage because they have a preexisting condition.  This will provide more health security for all Americans. 

The Affordable Care Act will create a new, consumer-friendly insurance marketplace called an exchange where Americans will get the same private insurance choices that members of Congress have.  This will help any American who’s ever struggled to find decent health care coverage. 

Reform is also the biggest health care quality law we’ve passed in years. The Affordable Care Act creates incentives for hospitals to adopt strategies to bring their health care associated infections rates down.  And the law will expand some of our most effective strategies for fighting chronic disease like Accountable Care Organizations and eliminate all co-pays for recommended preventive care, so no one has to skip a key check-up or screening because of cost concerns.

Everyone deserves the peace of mind that comes with having coverage and getting better care. In a reformed system, more Americans will get the care they need. The quality of care will improve, regardless of their race, ethnicity, or gender.

What's Your Health Reform Question?

Do you have questions about what the new health insurance reform law means for you? Please join me for a live Q&A with Nancy-Ann DeParle, Director of the White House Office of Health Reform. This is the third in our ongoing series of webchats where HHS officials and experts answer your questions about the Affordable Care Act.

Join us at 4 p.m. EDT, Thursday, April 15 at http://www.hhs.gov/live.

You can send your questions to Healthreform@hhs.gov. We will also take questions live via Twitter during the webchat. You can find us on Twitter at @HHSGov.

We will be talking about how the new law will increase your health security and what it means for you and your family now and in the future.

• Are you uninsured and have you been denied coverage because of a preexisting condition? Starting this year, you’ll have access to affordable health insurance options.
• Do you have a child under age 26 who is uninsured?  Learn how you can get access to affordable coverage for your young adult children.  
• Are you in the Medicare Part D doughnut hole?  You may be eligible for a $250 rebate check this year.

I hope you can take part in this discussion, and I look forward to hearing from you.

What Health Reform Means for Seniors

Thank you for joining our webchat on how health reform will help America’s seniors with HHS Secretary Sebelius, Assistant Secretary for Aging Kathy Greenlee, and Principal Deputy Administrator of the Centers for Medicare and Medicaid Services, Marilyn Tavenner.

If you missed it, or would like to watch it on demand, you can find it here.

This was the second in our webchat series about what health reform means for you. We know many Americans have questions about the new law and we’re committed to delivering accurate information so you know what is true and what is false.

As Secretary Sebelius, Marilyn Tavenner, and Kathy Greenlee made clear, some of the most important early benefits of the new health reform law go to older Americans. This year, seniors who face the gap in Medicare coverage known as the “donut hole” will get a $250 rebate check to help cover the cost of their prescription drugs. Over time, reform will completely close the donut hole. By June 23, we’ll establish a reinsurance program for early retirees that will be available to businesses around the country. This critical program will make it easier for companies to offer health benefits to their retirees. Starting next year Medicare will begin offering preventive care with no cost to beneficiaries, making screenings and check-ups much easier and affordable for older Americans.

Those are some of the benefits you will see in the months ahead and over time, reform will do even more to strengthen Medicare. Reform makes important investments that will help fight waste, fraud and abuse and includes new provisions that will improve the quality of care. Combined with other important changes, reform will extend the life of the Medicare Trust Fund by 9 years.

We received hundreds of great questions last week. While we couldn’t get to all of them, we were able to respond to many from our email and live via twitter. For the questions we couldn’t get to during the chat, please visit the “Your Questions Answered” section of our website where we’ll be adding new questions and answers. 

And don't miss our live web chat this week with Nancy-Ann DeParle, the Director of the White House Office of Health Reform. 

Submit your questions in advance to Healthreform@hhs.gov, or live during the webchat to our email or our Twitter feed: @HHSGov. 

Here are a few great questions that you asked last week. 

Question: I’m covered by a Medicare HMO which served my health very well. Will I be able to maintain the same coverage I have after health insurance reform is implemented?

Answer: Unfortunately there has been a lot of misinformation about Medicare Advantage plans. Seniors have a choice when they turn 65 and beyond, enroll in the traditional Medicare plan or enroll in a Medicare HMO or Medicare Advantage Plan. Medicare Advantage plans will continue to offer services to beneficiaries. Companies right now choose whether to offer Medicare Advantage plans. Some may make the business decision to exit the market, but nothing in health reform forces these plans to stop offering benefits and services. 

Question: I cannot get Medicare until I am 62. I do not have health coverage. I cannot get health coverage because I have a pre-existing condition. Do I get a piece of this new health care plan?

Answer: Absolutely. Beginning this year, you will be eligible to receive coverage through the new temporary high-risk pool program. Today, too many insurance companies reject Americans with pre-existing conditions or charge exorbitant rates. The high-risk pool program will offer these individuals access to affordable insurance and in 2014 there will be a new market that will prevent insurance companies from eliminating anyone with preexisting conditions. We will have more details regarding the high-risk pool program in the weeks ahead. You can read about the first step we have taken here.

Making Health Reform a Reality for You: Small Business Tax Credits

One of the most important benefits in the new law is relief for small businesses from the high cost of providing care. Small businesses are saddled with especially high costs when it comes to providing care for their employees. On average, their premiums are 18 percent higher than large businesses for the same coverage.

The new health insurance reform law helps make coverage more affordable for small businesses so they can provide health care for their workers. Effective immediately, millions of small businesses are eligible to receive a tax credit to cover up to 35 percent of premiums. In 2014, the credit will increase to 50 percent, saving businesses $40 billion by 2019.

This tax credit will be overseen by the Department of Treasury.

Here are a few important things you need to know about these tax credits:

• Available Immediately. The tax credit is effective January 1, 2010. As a result, small businesses that provide health care for their workers will receive immediate help with their premium costs, and additional firms that initiate coverage this year will get a tax cut as well.
• Broad Eligibility. The Council of Economic Advisors estimates that 4 million small businesses are eligible for the credit if they provide health care to their workers. Qualifying firms must have less than the equivalent of 25 full-time workers (e.g., a firm with fewer than 50 half-time workers would be eligible), pay average annual wages below $50,000, and cover at least 50 percent of the cost of health care coverage for their workers.
• Substantial Benefit. The credit is worth up to 35 percent of a small business’s premium costs in 2010. On January 1, 2014, this rate increases to 50 percent.
• Non-Profits Eligible. Tax-exempt organizations are eligible for a 25 percent tax credit in 2010. In 2014, this rate increases to 35 percent. (The credit rates are lower for non-profits to ensure that the value of the credit is approximately equal to that provided to for-profit firms that cannot claim a tax deduction for the amount of the credit claimed.)
• Gradual Phase-Outs. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
• Premium Cost Eligibility. To avoid an incentive to choose a high-cost plan, an employer’s eligible contribution is limited to the average cost of health insurance in that state. 

To learn more about the small business tax credit, you can also visit IRS.gov.

Making Health Reform a Reality for You: Creating Temporary High Risk Pools

Taking our first step to implement the new health insurance reform law, HHS reached out to states to create temporary high risk pools for people living with pre-existing conditions. Many Americans are uninsured because they have a pre-existing condition, rendering them unable to qualify for health coverage in the private insurance market. The new health insurance reform law seeks to expand coverage to these individuals through temporary high risk pool programs.

Last week, HHS took an important first step toward the creation of these temporary high risk pools. In a letter to Governors and Insurance Commissioners last Friday, HHS Secretary Kathleen Sebelius asked if states were interested in temporary high risk pool program established by the new health insurance reform law.

In the letter, she told the leaders that states may choose whether and how they participate in the program. She stressed that by working with states to establish temporary high risk pool programs, we can all ensure that more Americans get the coverage they need for themselves and their families.

As the letter says:

As you are aware, on March 23, 2010, the President signed into law H.R. 3590, the Patient Protection and Affordable Care Act (Public Law 111-148).  As the Department of Health and Human Services (HHS) begins the monumental task of implementing this historic legislation, I look forward to working in partnership with you as we transform the nation’s health care system.  I would like to draw your attention to one of the immediate changes that will be implemented this year.   Section 1101 of the new law establishes a “temporary high risk health insurance pool program” to provide health insurance coverage to currently uninsured individuals with pre-existing conditions. The law directs HHS to carry out the program directly or through contracts with states or private, non-profit entities. 

We are interested in building upon existing state programs in this important initiative to provide expanded access to health coverage for individuals who cannot otherwise obtain health insurance. To that end, I am writing you today to request an expression of your state’s interest in participating in this temporary high risk pool program, consistent with one of the implementation options described below.

Health Reform and You: Reinsurance Program for Early Retirees

For millions of Americans ages 55-64, retiring early also means giving up their health security.  Fewer and fewer employers provide coverage for these early retirees. And purchasing coverage in the individual market is not a viable option for many in this group, either because it’s unaffordable or because they have a preexisting condition like high blood pressure or diabetes.

But thanks to the new health insurance reform law, help is on the way.  Starting in about three months, a new retiree reinsurance program will bring support for needed employer-based coverage for retirees.

Tomorrow at 1:00 PM EDT, I’ll be discussing this topic during our second in a series of webchats about the new health reform law and you.  We’ll also be answering your questions.

You can view the webcast at www.hhs.gov/live.  Email your questions in advance to Healthreform@hhs.gov.  We’ll answer as many questions as we can on the webcast, and address others on our website in the days ahead.

The retiree reinsurance program provides $5 billion in temporary financial assistance so that employer plans can continue to provide valuable coverage to certain retirees.  It will make it easier for employers to give benefits to the workers who made their companies strong, and give retired workers the peace of mind that comes with quality health insurance.  You can learn more about the reinsurance program for early retirees by checking out this fact sheet (pdf).

The retiree reinsurance program is just one of the many ways early retirees will benefit from health insurance reform.  Reform also helps to control costs, improves the quality of care for everyone, and strengthens Medicare.

Join us tomorrow at www.hhs.gov/live to talk about this and other ways the new health insurance reform law will help seniors.  Again, submit your questions to Healthreform@hhs.gov.

Cross-posted at whitehouse.gov.

Health Reform and You: How the New Law Will Increase Your Health Security

In a speech today at the National Press Club, HHS Secretary Kathleen Sebelius spoke about how the new health insurance reform law will give Americans more benefits and choices, leading to greater security for you and your family.

Read the full speech here, and excerpts of her speech below.

***

When the conversation about reforming our health insurance system began nearly a year ago, there were some pundits who thought the days of America solving big problems were over.  They wondered whether transformative legislation like Social Security and Medicare was part of a bygone era like soda fountains and five cent matinees.  Last month, those pundits got a definitive answer.  After decades of asking, “When are we going to fix our broken health insurance system?” – we finally have an answer: “starting now.”

***

But our work didn’t end when President Obama put down his pen.  In some ways, it’s just begun. 

We have a great law.  Now, we have to carry it out effectively. 

To do that, we’ll need to communicate clearly with the American people.  Many of our friends and neighbors still have questions about this law.  That’s understandable.  Given the complexity of our health care system, which makes up one sixth of our economy, it would be surprising if they didn’t.  And it didn’t help that they were bombarded by nearly two hundred million dollars in ads over the last year, many of which were intentionally misleading.

For these Americans, our department will serve as a nationwide health insurance reform Help Desk.  If you have questions, we’ll have answers.  If you aren’t sure what to believe, we’ll have the facts. 

We know that the only way this law will achieve its full potential is if Americans understand and take advantage of all the new benefits and choices that will be available to them.

***

For years, Americans have struggled with a health insurance system that was opaque, unnecessarily confusing, and often overwhelming to navigate.  Our goal as we implement this law is to be the opposite of that – to be as clear and transparent as possible.  As soon as we know something, we’re going to tell you. 

But ultimately, we recognize that actions speak louder than words.  No matter how good a job we do educating Americans about the benefits for them in the bill, it won’t be much use unless we also implement those policies responsibly and effectively.  As the President has said many times, we need to get this right.  And as the letters I get every day make clear, we have no time to waste.

So in the week since President Obama signed this law, we’re already acting.  We’ve restructured the Centers for Medicare and Medicaid Services so that it’s better prepared to take on its new responsibilities under health insurance reform.  Last Friday, we began working with states to create a new high risk pool program that will help uninsured Americans with pre-existing conditions get coverage.  Yesterday, we sent new guidance to Medicare Advantage plans, which includes stronger cost sharing protections for seniors.  And later this week, we’ll open new Medicaid options to cover low-income adults. 

***

Our goal is to put these Americans back in charge of their health care.  We will provide information and education if it’s needed; set basic guidelines that will help foster a competitive insurance market; serve as an umpire to make sure insurance companies treat Americans fairly; and provide targeted resources to help empower consumers.  But ultimately, this isn’t about us.  It’s about you.  It’s about giving Americans more choices, more security, and more control.