HHS: Insurers should extend coverage early
Department urges insurance for dependents under 26 before health care reform becomes law in September.
HHS Secretary Kathleen Sebelius announced on Monday her department will encourage insurers to offer insurance to people under 26 and allow their parents to claim them as dependents before it becomes law in September.
Her announcement came in response to a similar move by the nation's largest health insurers, WellPoint and UnitedHealth Group.
One key factor that remains unclear is what defines a dependent. So far, the only stipulation under the health overhaul is that the individual cannot be married.
The September extension, along with other issues, was outlined in a timeline released Friday by the Commonwealth Foundation. The timeline was intended to clarify key points of the healthcare transition over the next four years, but it also pointed out several unanswered questions.
One ambiguity is what qualifies as healthcare costs. In 2011, insurers must spend at least 85 percent of premiums for large-group plans or 80 percent for small group and individual plans on medical costs. If they do not, they have to provide rebates to their customers. HHS, along with the Labor and Treasury departments, are accepting comments on this question.
The next major change highlighted in the timeline is the implementation of the temporary high-risk pool, beginning in July. The law requires it be enacted 90 days after the healthcare bill passed and remains in place until 2014, when the exchange materializes.
The success of the high-risk pools in temporarily solving the problem of the uninsurable remains uncertain as well.
"If you had all healthy people dropping out and only sick people left, then your premium might be higher, but there is certainly no evidence," Commonwealth Fund President Karen Davis said. "This is very troubling to Health and Human Services, and the state commissioners will be monitoring it."
Thirty-five states already have high risk pools, and while they at least offer some coverage to those with pre-existing conditions, the rates are so high that they can still be unaffordable, according to the National Association of State Comprehensive Health Insurance Plans.
Edmund Haislmaier, health policy analyst at the Heritage Foundation, said funding might be an issue.
"Look at CBO's projections," he said. "There's no dedicated revenue source for this, so what you have is a mammoth bill with massive new taxes with theoretical taxes to new programs."
It is also still unclear how these pools will work in each state. Governors and insurance commissioners must submit a letter of intent by April 30 that outlines whether they plan to submit an application to contract with HHS to operate a high-risk pool program under the new law.
Who is defined as a dependent; what is defined as a health cost; and how risk pools will function in each state will be decided quickly because of the upcoming deadlines in implementation, according to Sarah Collins, vice president for the Commonwealth Fund's Program on Affordable Health Insurance.