Health Care Reform, HMSA and You
Even if you were brave enough to try reading a copy of the health reform legislation–the
Affordable Care Act, or ACA–you probably did not get too far before its length and complexity deterred you.
The ACA is hundreds of pages long. A reader needs countless pages of the current law,
which the ACA refers to and amends, to understand many of the changes. And the act amends,
repeals and re-amends itself, so what you read on page 13 is revised on page 765;
the revised version is qualified on page 43, and that qualification is modified
on page 777.
On top of that, the federal agencies that implement the ACA have begun to publish a
series of administrative rules that will have a significant impact on how the law
is interpreted. That reading list is already hundreds of pages long and is getting
longer every month.
It’s a lot to take in.
That’s why we’ve prepared this short explanation of some of the changes
you can expect the ACA to have on your relationship with HMSA and our members – your
If you find this useful, stay tuned: HMSA plans to provide occasional updates to
help keep you informed of developing health reform issues.
Changes Will Not Be Uniform
Before we get started describing some of the ACA provisions, it is important
to explain a couple of reasons why many of these changes will not be implemented
Different Effective Dates. Most changes go into effect at the beginning
of a "plan year." That means that the law will have an earlier effective
date for some people than for others. People whose annual coverage begins Oct. 1,
2010, (for example) will be affected before people whose annual coverage begins
on Jan.1, 2011.
Grandfathered Health Plans. Many of the ACA provisions will
not affect "grandfathered" health plans. A health plan that was in effect
on March 23, 2010 – a grandfathered plan – is not subject to certain ACA
provisions, as long as the employer or health plan does not make significant changes
in the plan’s benefits. That means people covered by these grandfathered plans
will not be subject to some of the changes described below.
In short, some of your patients will be affected by the ACA changes sooner and
others will be affected by the changes later. Still other patients will not be affected
by some of the changes at all.
Patient Benefits in the First Two Years
Several ACA provisions will affect the benefits to which HMSA members are entitled
soon. These changes include:
Elimination of Cost-Sharing for Many Preventive Services. Patients
will no longer be responsible for cost-sharing for certain preventive services.
That means patients will not be required to pay out-of-pocket costs (such as deductibles
or copayments) for recommended immunizations, screenings and tests. The prohibition
on cost-sharing applies to services recommended by the United States Preventive
Services Task Force and other similar organizations. Check our Provider Resource
Center for details on
preventive services as they become available.
Elimination of Lifetime and Annual Benefit Limits. Patients generally
will no longer be subject to lifetime dollar limits on benefits, such as a $2 million
cap on all benefits paid under a policy. Similarly, annual dollar limits – the
maximum amount paid in a year for a condition – will be severely restricted
beginning the first year of health reform and further controlled in plan years
beginning on or after Jan. 1, 2014.
Elimination of Preexisting Condition Exclusions for Children. Children
will no longer be denied coverage because of a preexisting medical condition. Although
this policy has long been in effect for individuals enrolled in group (employer)
coverage, it will now apply to children under individual coverage. In addition,
beginning in 2014, the provision will apply to all individuals – not just children.
Children Covered Through Age 26. Under the ACA, children are entitled
to be covered under their parents’ policy until they reach age 26. This will
be the case even for children who are not enrolled in school and (in most cases)
children who do not qualify as dependents on their parents’ tax returns.
Emergency Services. Patients will not need prior authorization
to obtain emergency services, even at an out-of-network emergency room. Although
patients may be required to pay more for out-of-network emergency room visits than
in-network visits, the amount of that "balance billing" will be limited.
Other Patient Benefits
Several ACA provisions that benefit patients go into effect for plan years beginning
Jan. 1, 2014. Those changes include:
Guarantee Issue and Renewability. Groups and individuals will be
allowed to join any health plan for which they are eligible. That means patients
cannot be denied coverage because of a health condition. Groups and individuals
will be allowed to renew coverage at their option.
Health Plan Rates Not Tied to Health Status. Health plan rates
for individuals and small groups will no longer be adjusted based on health status.
Rather, rates will vary only on (a) the plan of benefits, (b) the age of each member,
(c) where the members live, and (d) whether the members use tobacco.
Other Changes Affecting HMSA’s Relationship with Providers
Some of the other ACA provisions that affect HMSA’s relationship with health
care providers include:
Uniform Documents and Standardized Definitions. In the first year
after the ACA goes into effect, the Department of Health and Human Services (HHS) will
be developing uniform standards for the documents that explain health care coverage
and standardizing the definitions of terms for those documents. The standardized
documents and terminology will be designed to increase understanding of the circumstances
under which health care services are and are not covered.
Increasing Uniformity of Standard Transactions. The ACA will require
adoption of "operating rules" for the electronic transactions HMSA conducts
with health care providers, such as the claims HMSA receives and the remittance
advice HMSA sends. The operating rules will be designed to ensure that transactions
between trading partners are as uniform as possible, to further reduce administrative
burdens on patients and providers.
New Standard Transactions. HHS will adopt standards for two new
transactions: Electronic fund transfers (EFTs) and claims attachments. Using these
transactions, HMSA and other health plans will be able to submit payment to providers
by electronic fund transfer and providers will be able to use a standard electronic
transaction for submitting attachments to claims.
Health Plan Identifiers. Health plans such as HMSA will be assigned
a national health plan identifier, similar to the National Provider Identifiers
(NPIs) health care providers now have.
Other Things to Think About
ACA will make many other changes in the health care system – changes that will
affect us all in the years to come. Although these changes are extremely important,
they only indirectly affect HMSA’s relationship with you. These provisions
- Creating "insurance exchanges," which are intended to make it easier
for individuals and groups to purchase health care coverage.
- Imposing obligations on individuals and employers with respect to furnishing health
care coverage. The provisions are designed to ensure near-universal coverage.
- Creating individual and small business tax credits for furnishing health care coverage.
- Including certain preventive care services under Medicare coverage and increasing
Medicare reimbursement for certain primary care services.
For detailed HMSA policy, administrative and claims-filing information related to
the ACA, visit the Provider Resource Center.
You may learn more about the ACA at:
This information is based on HMSA’s review of the national health care reform
legislation. This overview is intended for educational purposes and should not be
used as tax, legal or compliance advice. Interpretations of the legislation vary
and some reform regulations differ for particular members enrolled in certain groups.
HMSA will continue to present and update information related to national health
care reform as additional guidance becomes available.