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Health Care Reform: premiums, appeals...exhaustion

January 21, 2011 - Mary Ann Heath
My reading of the health care bill this week contained a lot of pertinent information — bringing down the cost of premiums, being allowed to appeal coverage determinations, consumer information, extending insurance to those with pre-existing conditions, eliminating unreasonable premium increases... Yes, all of these very crucial items were packed into one week of reading. Somehow *yawn* I managed to plug my way through them.

But, no wonder so few people understand health care reform. Some really good novels are 800-plus pages, and many people have a difficult time reading them — and it’s entertaining. Nine-hundred pages about health care and insurance certainly isn’t entertaining... but it’s important.   I bet if we could figure out a way to turn the bill into an in-your-face, three-dimensional video game, we’d all know what health care reform is about. Highlights from this week’s section, pages 18-35, include:

• Reporting: Insurance issuers must report the percentage of total premium revenue — A. reimbursed to enrollees for clinical services, B. for activities that improve health care quality and C. for “non-claims” costs. 

• Rebates: Don’t you just love the word? Here is my understanding of how the rebates work: 85 percent of premium revenue collected by insurance companies from large employers must go to cover health care services and improvement. For individuals and small employers, 80 percent of premium must be directed to such services. If these goals are not met due to overhead costs, (administrative costs or profits) they must provide rebates to their customers. The idea here is to help lower the cost of premiums. Makes sense to me. Insurance companies exist to cover medical expenses, not to overcompensate themselves. 

• Appeals: The bill establishes a way for consumers to appeal coverage determinations. Now, if you don’t like how your insurance company handled a claim, you can appeal it. It also sets up an external review process for consumer protection.  

• Consumer information: The bill enables grants to be awarded to states in order to establish consumer assistance offices. It also provides guidelines/requirements for such offices, as well as ombudsman programs. This is a good way for consumers to be brought up-to-speed on insurance claims and policies they may not understand, while also keeping insurance companies in check. It’s difficult to fight a claim you don’t understand. Not to mention, these offices can direct consumers to the “right” people to talk to and the “right” way to do it. Ever have a complaint and try to contact the company you had a complaint with, only to get transferred so many times, you forget what you even wanted to complain about in the first place? Establishing offices like these will help track complaints, and assist companies in identifying issues with insurance coverage.   • No more unreasonable premium increases: Starting in 2010, unreasonable premium increases will be reviewed annually. Insurance issuers are also required to submit justificiation for such increases BEFORE they are implemented and it must be posted prominently on their website.  

• High-risk pools: Within three months of the bill’s passage, it calls for the establishment of “high-risk pools” for eligible individuals, such as those with pre-existing conditions. Under the bill, insurance companies will be banned from denying individuals with pre-existing conditions coverage. But, it doesn’t kick in until 2014. This part of the bill sets up a plan for these individuals for the interim. The Secretary of Health and Human Services issued a report this month saying at least 129 million Americans have pre-existing conditions. Without the bill, and this stipulation in the bill in particular, that’s a lot of Americans without health care — when they need it most. 

• Re-insurance for early retirees: The bill sets up a program to help re-insure early retirees. Residents who retire early and have no employer-based insurance, but don’t yet qualify for Medicare end up slipping through the cracks. This program will help reimburse employers who extend insurance plans to early retirees. 

• Coverage options: Internet shopping has now spread to insurance. Starting in July 2010, states were directed to set up Internet sites where consumers can compare insurance options and find the right coverage.

• Administrative Simplification: Oddly enough this was the most difficult section to plow my way through. Maybe because it was the end of the week, the end of my reading or maybe in order to “simplify” things we have to use convoluted terms. At any rate, the bill calls for a transformation in standardized billing, and requires health plans to start implementing rules for electronic exchange of health information. According to, switching over to electronic health records will “reduce paperwork and administrative burdens, cut costs and reduce medical errors.” Ultimately, this leads to an improvement in the quality of care. 


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