Health insurers are facing a new regulatory reality today, as several key provisions of the Affordable Care Act are now law.
One new stricture is a ban on exclusions to children under 19 due to pre-existing conditions. Henceforth, insurers cannot limit or deny benefits or coverage to applicants that developed medical issue prior to joining the plan. Moreover, these protections will be extended to Americans of all ages starting in 2014.
However, in the wake of the law’s passage, health insurers were able to elicit from the Obama administration a clarification that stipulated the inclusion of annual enrollment periods for the children's preexisting condition exclusion rule.
“We are gratified that the administration responded to the concerns we raised about adverse selection that could occur if plans are required to cover children with preexisting conditions without an open enrollment period,” Scott Serota, president and CEO of the Blue Cross and Blue Shield Association said in a July statement. “We think this policy will ensure that children get the comprehensive coverage they need while avoiding this unintended consequence.”
Other new provisions going into effect include a ban on “lifetime” dollar limit on policies for essential services. The law also restricts and phases out the “annual” dollar limits a health plan can place on benefits—and does away with these limits entirely in 2014. However, insurers retain the right to put an annual dollar limit and a lifetime dollar limit on spending for health care services that are not “essential.”
Insurers also will be constrained from rescinding coverage.
“Under the statute and these interim final regulations, a group health plan, or a health insurance issuer offering group or individual health insurance coverage, must not rescind coverage except in the case of fraud or an intentional misrepresentation of a material fact,” the regulation states. “This standard sets a Federal floor and is more protective of individuals with respect to the standard for rescission than the standard that might have previously existed under State insurance law or Federal common law.”
Insurers can still rescind coverage if consumers intentionally put false or incomplete information on insurance application, or fail to pay premiums on time.
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