Healthcare Reform is Being Implemented:
What Does It Mean for Me Right Now?
In the Small Group Market…
Timing
The first phase of changes related to federal healthcare reform took effect for group customers renewing on October 1.
Benefits
For grandfathered plans, new benefits to be implemented include:
- Removing lifetime maximums
- Covering dependent children up to age 26
- No pre-existing condition exclusions for members under age 19
- Removing annual limits on essential benefits
For non-grandfathered plans, new benefits include those listed for grandfathered plans, as well as:
- No member cost sharing for preventive services.
Costs
The cost of these added benefits is modest in the small group market, generally ranging from 1 percent to 2 percent. While healthcare reform is expanding access to coverage, it does not fundamentally address rising medical costs that are the true drivers of rates—which customers see when their plan renews.
Communications
We have communicated extensively with the marketplace on this issue, including producer bulletins, webinars, and tools to guide conversations between producers and their clients on the issue of “grandfathered” status. Materials are available in the producer section.
In the Individual Market…
Timing
The first phase of healthcare reform will take effect at different points, depending on when a customer purchased their plan, based on guidance from the U.S. Department of Health & Human Services (HHS) and a directive from the Oregon Insurance Division (OID).
- Existing customers who purchased coverage prior to September 23, 2010 will see changes related to federal healthcare reform added to their plans on the date of their next plan renewal: Sept. 1, 2011.
- Customers who purchased coverage after Sept. 23, 2010 but prior to Oct. 20, 2010: coverage will include relevant benefits for federal healthcare reform.
- Based on an OID directive, we are not currently accepting applications for new policies postmarked after Oct. 20, 2010. We will begin accepting new applications immediately upon approval of new products by the OID, which will include benefits related to federal healthcare reform.
Benefits
For grandfathered plans, new benefits to be implemented include:
- Removing lifetime maximums of $2 million
- Removing lifetime maximums on organ transplant benefits
- Covering dependent children up to age 26.
For non-grandfathered plans, new benefits include those listed for grandfathered plans, as well as:
- Removing annual limits on essential benefits
- No member cost sharing for preventive services
- No pre-existing condition exclusions for members under age 19.
Costs
Costs for these added benefits will be higher than those for the small group market, given that most customers in the individual market are choosing plans that are less comprehensive than those in the group market.
While we have filed new individual products, we have not yet received approvals at this time. Once we do, we will be communicating about them to producers and subscribers as soon as possible.
Note that our tool for conversations related to grandfathered status applies to both the small group and individual markets.
What Comes Next?
Healthcare reform is complicated and will take years to implement. Regulations to be issued in the coming months and years by HHS—as well as action by state government and regulators—will be key factors in how reform works on the ground.
LifeWise remains focused on implementing federal healthcare reform, especially to ensure a smooth transition for our customers while maintaining as many choices for them as possible.
