5 Better Care Bill Revision Highlights for Agents

The new version, on page 138 of the PDF, calls for the secretary of the U.S. Department of Labor to conduct periodic reviews of the multi-state plan sponsors, and to work with a plan’s state of domicile in connection with enforcement efforts.

4. Waiting Periods

The current law lets people apply for individual major medical coverage during an annual open enrollment period, or, in some cases, during a special open enrollment period, without going through medical underwriting.

The American Health Care Act bill, the Affordable Care Act bill the House passed in May, would let a health insurer charge extra premiums for about a year if a new enrollee had gone without creditable major medical coverage for a period of more than 63 days.

The Better Care bill version released in June did not include a continuous coverage provision.

The new Better Care bill version includes a tough continuous coverage provision, in Section 206.

If a consumer who applied for coverage during an annual open enrollment period had failed to keep creditable major medical coverage in place during the previous 12 months, the consumer would have to go through a 6-month waiting period before the new coverage started paying benefits.

That means that, in effect, a consumer with a significant break in health coverage would have to pay for 12 months of coverage, and go without any major medical coverage for six months, to get six months of major medical coverage.

Section 206 appears to require an issuer to impose the six-month waiting period, even if the issuer would prefer to start providing benefits earlier.

Section 206 does not say whether a plan could pay for some care, such as preventive care, or care meant to prevent expensive complications of conditions such as diabetes, during the waiting period.

The provision includes one exception for people coming in through open enrollment periods: If their new coverage will take effect immediately after the old coverage expires, they need not go through a six-month waiting period, even if they had a gap in coverage in the previous 12 months.

5. Section 301(b) Off-Exchange Health Insurance Policies

Section 301 adds a Consumer Freedom Option plan provision to the Better Care bill.

Sen. Ted Cruz has proposed offering the plan as a way to make coverage more affordable for consumers who cannot qualify for Affordable Care Act public exchange subsidies and may not need the rich benefits that an Affordable Care Act-compliant plan must provide.

The text of the new Better Care bill version makes the nature of the requirements that apply to Section 301(b) plans tricky for a lay reader to interpret quickly, because the text refers to the exemptions by statutory number, without describing what the existing rules, or the proposed changes, are.

A Section 301(b) plan appears to be:

• Subject to some Affordable Care Act major medical rules, such as the rules requiring an issuer to provide a Summary of Benefits and Coverage notice, and to abide by federal claim denial appeal and review rules.

• Free from Affordable Care Act medical underwriting restrictions.

• Free from the Affordable Care Act preventive services coverage mandate, which now requires a non-grandfathered major medical plan to cover a standard package of preventive services, such as checkups, without imposing co-payments or deductibles on the patients.

• Free from most of the Affordable Care Act essential health benefits package coverage rules.

• Subject to state underwriting rules and benefits mandates.

An insurer or managed care company could offer a Section 301(b) plan in a market if it also offered at least one gold plan and at least one silver plan through that market’s public health insurance exchange program.

Section 301 would set aside $70 billion of the Better Care long-term health insurance stability and innovation money to support states with Section 301(b) plan programs.

The secretary of the U.S. Department of Health and Human Services would prioritize use of the $70 billion mainly to provide extra cash for “high-risk individuals” using public health insurance exchange plans in markets that also offer access to Section 301(b) plans.

A state could not use any federal subsidy money to help the people using the off-exchange Section 301(b) plans.

Because the off-exchange Section 301(b) plans could use medical underwriting, and limit benefits, people with health problems would probably gravitate toward using public health insurance exchange pulls.

The $70 billion in subsidies for high-risk exchange plan users could also pull enrollees toward the exchange system, by decreasing the net out-of-pocket premium costs for exchange plan users.

— Related: Cruz Pitches GOP Leaders to Allow Cheap Insurance in Health Bill