January 28, 2014
In order to ease “handover” problems from the “old” Health Care System to the new Affordable Care Act (ACA)-based System, a variety of regulatory and operational accommodations were made during the last half of 2013 and in early 2014.
These actions were intended to be short-term adjustments, to be phased out as implementation of the ACA proceeds. All of these actions will affect access to care.
It is too early to decide whether the phasing out of these “fixes” will be low-key or fraught with new problems.
The large-employer mandate has been postponed until 2015, after complaints by employers that applicable regulations were not ready or complete. Thus, employer-based health plans can postpone meeting ACA requirements for another year. During 2014, employers can continue to offer coverage that does not meet Qualified Health Plan (QHP) requirements—or offer no plan at all, without penalty.
Political “guarantees” that had been made to allow individuals to “keep their existing plans” ran counter to the ACA individual mandate that, starting in 2014, all individual plans had to meet QHP requirements. As an accommodation, it was announced at the last minute that, under these circumstances, “old” plans could be retained for another year.
However, a number of state insurance commissioners and many insurance companies objected to this accommodation, arguing that the change would place the financial viability of the ACA at risk, and it would not be possible to reinstate the old plans in the time-frame allowed. As a result, some old plans were allowed to continue while others were not.
Many individual policies were cancelled by insurance companies in preparation for the QHP-only plans to be available in 2014. As another accommodation, it was announced that people with such cancelled policies could obtain hardship exemptions from penalties in 2014. Coverage would still be available through QHPs.
The ACA also requires companies to offer the same level of coverage to all employees of a company; there can be no discrimination in favor of those with higher pay. The postponed development of regulations prevented this requirement from taking effect in 2014.
To further confuse the situation, some insurance companies continue to offer individual and group “mini-med” plans that do not meet QHP requirements. Individuals who buy these plans will still have to pay penalties under the individual mandate, unless other accommodations apply.
Individuals enrolled in high-risk pools experienced problems in purchasing new QHPs because of the Exchange development problems, and faced the potential for losing all insurance. As a result, many high-risk pools were continued for a “handover” period.
The Spanish-language version of the federal Exchange was postponed to allow more time for development. However, the call centers included assistance from Spanish-speaking representatives.
And online access to the Small-Business Health Options Program (SHOP) was postponed for the federal Exchange, to allow for more developmental time. Mail-in applications were still to be accepted. Some state Exchanges were able to offer online options for small businesses, and assistance remained available through the call centers.
Many insurance companies complained that the limited information that they were receiving for Exchange enrollees was filled with errors due to software design issues. A public dialog resulted between the Exchange operators and insurance company representatives, adding to the feeling of “near-chaos” as implementation struggled. However, in early 2014, these problems began to abate.
Continuing turmoil over all of these issues and adjustments will affect attorney practices during 2014.
More on these and related ACA topics, with an in-depth discussion of organizational reactions to implementation issues, may be found in a recent book by the authors that describes evolution of the ACA, and in a new Practice Guide by the authors that addresses funding and access issues in health care.