The nation's health care overhaul took another step forward Tuesday when the Obama administration proposed new rules that clarify insurers' duties and legal responsibilities under key provisions of the Affordable Care Act.
The law, which critics have long referred to as "Obamacare," makes it illegal for insurance companies to deny coverage to people with pre-existing conditions, beginning in 2014. The first proposed rule is a series of five market revisions that will help implement that part of the law.
The proposal first requires private insurers to sell policies to all consumers regardless of their health status or history, while also banning these insurers from charging more for coverage based on a person's health, gender or where he or she works. The proposal allows insurers to adjust premiums based only on a person's age, history of tobacco use, family size and geographic location.
The new rule also reinforces current federal guidelines that forbid insurance companies from canceling or refusing to renew coverage just because a person becomes sick.
To avoid charging different premiums for different groups of people, the proposed rule requires insurers to maintain separate statewide customer pools for the individual and small group markets. These pools will be used to determine risk and premium costs.
"This insures that the cost of coverage will be spread among all the insurers' customers in the market," said Gary Cohen, the director of the Center for Consumer Information and Insurance Oversight at the Department of Health and Human Services.
The rule's final provision ensures that young adults and people who can't afford insurance will have access to catastrophic health coverage in the individual insurance market.
Many of Tuesday's proposed rules will help "ensure that consumers are protected from some of the worst insurance-industry practices," Cohen said.
A second proposed rule outlines the categories of "essential health benefits" that all private insurers must provide, beginning in 2014.
The law requires that these essential benefits include: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance abuse services, including behavioral health treatment; prescription drugs; rehabilitative services and devices; laboratory services; preventive and wellness services; and pediatric services, including oral and vision care.
Current data suggests that 62 percent of people and families who purchase health insurance in the private market don't have coverage for maternity services, while 34 percent don't have substance abuse services and 9 percent are without prescription drug coverage.
The Obama administration estimates that when the essential benefits mandate begins in 2014, 8.7 million people will gain maternity coverage, 4.8 million will gain substance abuse coverage, 2.3 million will gain mental health coverage and 1.3 million will gain prescription drug coverage.
The final rule provides additional consumer protections for people who participate in job-based wellness programs, which help control health spending by promoting healthier lifestyles.
All the proposed rules will be published in the Federal Register next Monday. There will be a 30- or 60-day public comment period. Health and Human Services officials will weigh the public comments before issuing their final rules.
Karen Ignagni, the president of America's Health Insurance Plans, said her organization would review the new proposals and submit detailed comments.
Although the proposed rules attempt to minimize coverage disruptions, Ignagni said, "We remain concerned that many families and small businesses will be required to purchase coverage that is more costly than they have today."
And despite the threat of a fine for being uninsured in 2014, young, healthy people may still "wait to purchase insurance until they are sick or injured, driving up costs for everyone with insurance," she said.
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