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Life Health > Health Insurance > Health Insurance

Health To Change Slowly

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WASHINGTON BUREAU — Even if Democrats succeed at passing and implementing the health system changes that most concern the insurance industry, many of those changes might not start taking effect until 2013.

One of the most controversial proposals, the proposed employer health coverage mandate, might not take effect until 2018.

That story emerges in documents released by the House committees with jurisdiction over health system legislation.

A timeline provided by the House Ways and Means Committee shows that provisions that would take effect on a delayed basis include creation of a health coverage purchasing exchange; prohibitions on insurers from “engaging in discriminatory practices,” such as individual medical underwriting; and establishment of the “public option,” or government-run health plan.

All of the provisions are now in the version of the health system bill now being debated by the House Energy and Commerce Committee, the House Ways and Means Committee and the House Education and Labor Committee.

Insurance officials are welcoming the fact that relatively conservative, or “Blue Dog,” Democrats participating in the “tri committee” effort have forced the House to delay action on the bill until after the House returns from its summer recess Sept. 8.

“We are hopeful that the House tri-committees will use the delay until after the recess to come back and amend the current draft to make it more amenable and realistic,” says Diane Boyle, executive vice president of the Association of Health Insurance Advisors, an affiliate of the National Association of Insurance and Financial Advisors, Falls Church, Va.

The health insurance industry already has agreed to accept many reforms.

These include bans on refusing to sell or renew policies due to an individual’s health status, and excluding coverage for treatments based on pre-existing health conditions.

Another provision accepted by the industry would limit the ability of insurers to charge higher rates due to heath status, gender, or other factors. Under that provision, “premiums can vary only on age (no more than 2:1), geography and family size,” officials say.

The health insurance exchange provision would make the exchange available to individuals without other coverage and to employers with 10 or fewer employees. The exchange would help consumers shop for standardized health packages.

The exchange would facilitate “enrollment and administers affordability credits so that people of all incomes can obtain affordable coverage,” officials say.

The public health insurance option would create a new insurance plan that would be available only within the Health Insurance Exchange.

House Democrats say the public plan would compete “on a level playing field against private health plans.”

Democrats on the committee contend it “will inject competition into the many parts of our country without a competitive health insurance market.

“Because it doesn’t operate at the behest of investors, it will be able to offer stiff competition to private insurers – forcing them to compete on cost and quality for the first time,” Democrats say.

The employer mandate in the proposed House bill would require employers to offer coverage to their workers and their workers families and meet standards for that coverage or pay a penalty of 8% of their payroll to help offset the cost of their workers obtaining coverage through the HIE. According to the data released by the three committees, employers would have a grace period and would not be required to meet the benefit standards until 2018.

The legislative draft would exempt small businesses with annual payrolls under $250,000 from the requirement to offer coverage. Employees of the exempt businesses could obtain coverage through HIE.

Under the House bill, employers with payrolls between $250,000 -$300,000 would pay a 2% payroll penalty for failure to provide coverage; those with payrolls of $300,000-$350,000 would pay a 4% penalty; and those with payrolls of $350,000-$400,000 would pay a 6% penalty.

Employers with annual payrolls over $400,000 would pay the full 8% penalty.


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