Health Reform and Private Insurance Gary Claxton Vice President Kaiser Family Foundation April

Health Insurance Reform Insurance changes vary in terms of timing and application When – Early changes occur within current market structure – Larger changes occur when exchanges and subsidies begin New rules vary by market and funding – Nongroup – Small group – Large Group – Some provisions do not apply to self-funded plan – Many provisions do not apply to grandfathered plans

Early Insurance Changes Access – Temporary high risk pool – Extend coverage for dependents until age 26 – Eliminate pre-existing condition exclusions for those under 19 – Restrict rescissions Benefits – Eliminate lifetime dollar limits and restrict annual dollar limits – Preventive services without cost sharing – Provide choice of certain health care professionals as primary care physician; provide certain protections for people using emergency services – Appeal processes Value – Minimum loss ratios and rebates – Processes for evaluating unreasonable rate increases – Reporting on quality, financial and other factors – Standardize explanation of coverage – Federal website on affordable coverage options

Changes Effective in 2014 Access – Insurance available to individuals without regard to health status or history – Rates cannot vary by health status; limit variation for age – Eliminate pre-existing condition exclusions and limit waiting periods – Subsidies to help low- and moderate-income people buy coverage – Requirement for most people to have coverage Benefits – Establish essential health benefits package – Four levels of cost sharing for policies, vary by actuarial value – Limits on out-of-pocket liability – Limits on deductibles for group health plans Value – Exchanges established to offer coverage for nongroup and small group coverage

The Health Insurance Exchanges Open to U.S. citizens and legal immigrants without access to other coverage and small employers (<100 employees; states can expand to larger employers in 2017) – Separate SHOP exchange for small employers – Can access Exchange if employee share of ESI premium exceeds 8% of income, but can only get subsidies if premium exceeds 9.5% of income No public optionmulti-state plans administered by the Office of Personnel Management Standardized information to facilitate plan comparisons

Questions and Challenges Lots of issues to be clarified in regulation – Important example is how a plan can change and remain grandfathered – Initial regulations expected soon Market will change dramatically and some actors may not continue Impact of changes on costs and access always difficult to assess Both short and long time until 2014 Federalism issues abound