01 Mar How States are Changing Health Insurance Rules
In an ongoing effort to keep you up to date on the many proposed and approved
changes to our health care system and how they might impact the cancer community, this week, we bring you updates from around the country. If you don’t live in one of these states, be aware, these changes could come to your state next.
Two weeks ago, we reported that 11 states have applied for waivers to make some individuals work, in order to get access to health care through Medicaid. Since then, Kentucky and Indiana’s waivers have already been approved by the Center for Medicare and Medicaid Services and those states are moving forward with implementing plans for a Medicaid work requirement. Click here to learn more about the impact of the Medicaid waivers and to see what the states are asking for in their waivers.
In addition to work requirements, five states have also asked the U.S. Department of Health & Human Services if they can place a lifetime cap on how long an individual can receive Medicaid coverage. For example, Arizona, would like to place a 5-year lifetime cap on coverage. Kansas, Utah, Maine and Wisconsin are also seeking to impose lifetime caps.
This would be a substantial change to the Medicaid program, since signed into law under President Truman in 1965. More than 68 million people receive Medicaid coverage, including children, seniors, and people with disabilities. HHS has not released any guidance on this issue, to date.
Ohio has now joined Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, Mississippi (still in process), New Hampshire, North Carolina, Utah, and Wisconsin, in asking for permission to add a work requirement to their Medicaid program. The work requirement would begin July 1, 2018, if approved in time.
Ohio has also asked the federal government for permission to not comply with the individual mandate. This will likely have no actual impact, as Congress reduced the penalty for not purchasing health insurance to $0, in the latest tax bill. The $0 penalty will begin in 2019, which means that those who don’t have health insurance in 2018 will still be responsible for the penalty!
Rhode Island is also making cuts to its Medicaid program, which covers more than 300,000 people. Individuals will be required to pay co-pays when receiving health care services or prescription drugs. However, there will be an annual cap on co-pays equal to 6% of an individual’s income.
Idaho announced last week that they will allow insurance companies to sell plans in violation of the Patient Protection and Affordable Care Act (ACA). The ACA required health insurance plans to meet certain minimum requirements in order to protect consumers from pre-existing condition exclusions and annual and lifetime limits, while ensuring coverage of essential health benefits. Insurers argue that providing this quality coverage is more expensive and that is why plans sold in the Health Insurance Marketplace can be more expensive.
Idaho’s approach to bring down the cost of insurance is to allow plans to offer less coverage and to exclude people with pre-existing conditions. This directly violate the law. It will be up to HHS to enforce the law or allow Idaho to continue offering these illegal plans. There are many other states waiting to see how HHS will react.
Blue Cross of Idaho has already unveiled five new plans that don’t comply with the ACA, including having annual caps on coverage and pre-existing condition exclusions for up to 12 months.
Advocates have three concerns about this approach:
- People who are healthier will leave the Marketplace to buy these cheaper plans, which will drive up the costs of plans in the Marketplace
- If these healthier individuals are diagnosed with serious medical conditions, they will find they have inadequate coverage
- People with pre-existing conditions won’t be able to purchase these cheaper plans, which means they will be stuck in the marketplace with more expensive plans
This turn of events is very concerning for the cancer community, as it allows insurance companies to do an end run around the ACAs protections for people with pre-existing conditions.