Insurers, Employers Weighing Effect of New Health Care Rules

A new round of health care reform regulations kicked in last month, causing insurers to make changes to their policy offerings and leaving some employers with higher premiums. The new regulations, which are part of the Patient Protection and Affordable Care Act, became effective Sept. 23. The rules allow consumers of new health care plans access to free preventive services, to keep adult children up to the age of 26 on their parents’ plans, to choose their primary care physicians and pediatricians, and to seek emergency care at hospitals outside an individual’s plan network without first receiving network approval or having to pay higher co-payments or co-insurance. Other rules would prohibit insurers from limiting or denying coverage to individuals under the age of 19 because of pre-existing conditions, placing lifetime caps on benefits, and canceling policies when employers make mistakes on forms unless fraud is proven. New appeals process policies are also part of the new set of regulations. Anthem Blue Cross, based in Woodland Hills, has joined other large insurers in announcing its plan to stop offering child-only policies. Anthem Blue Cross refused to comment about the decision. While Woodland Hills-based Health Net, Inc. does not plan to discontinue individual child-only policies, it is opting to limit enrollment for the policies to open enrollment periods, said Brad Kieffer, the company’s spokesman. California Department of Insurance officials said insurance companies are backing away from offering children’s policies because of the belief that the law would result in an influx of child enrollees with serious illnesses, which would lead to higher costs. Kieffer said Health Net is expecting the new set of regulations to increase costs for the company, but he did not know by how much. “Anytime you are paying for more services, yes, there’s an impact,” he said. “But the impact depends on what kind of plan you had in the first place.” Kieffer said some plans already include some of the services mandated by the recent regulations, leading to more minimal cost increases. Other plans that had more limited benefits would incur higher costs. Higher rates Barbara Oberman, president of Agoura Hills-based Barbara C. Oberman Insurance Services, Inc., said the increased costs from the new regulations are already starting to impact businesses as insurers pass the bill onto their customers. She has already seen the changes for some employers renewing their plans after Sept. 23. “Overall, employers are having not just mixed reactions, but negative reactions,” she said. “They’re very concerned about costs. … It’s increasing premiums between two and four percent, depending on the carriers.” Kathleen Sebelius, Secretary of the U.S. Department of Health and Human Services, said in a letter early last month aimed toward insurers that the new regulations should only lead to increased costs of about 1 percent to 2 percent. Meanwhile, insurance companies have already been raising their rates due to increased medical costs. Health Net was recently approved by the California Department of Insurance to increase rates for individual policies by an average of about 16 percent. Anthem Blue Cross, had originally proposed an average increase of about 25 percent with increases reaching up to 39 percent. The company was eventually approved for an average 14-percent rate hike. Oberman said she expects to see more businesses affected by the regulations as time passes. “Most of our clients have not been impacted directly by the bill yet because the law just passed,” she said. “Only time will tell as we go through each renewal.”