Brokers are quite naturally concerned about their future under health care reform. Times of change are always unsettling and the new legislation is change of a grand magnitude. Everything from plan design to compensation to distribution mechanisms are undergoing a transformation. What makes things worse is the uncertainty. While the broad outlines of health care reform are pretty clear, in reality there’s more unknown about the details than known. Not only will regulators at the state and federal level interpret the law, but so will carriers, employers and others who need to comply with those regulations. Then there are the inevitable bills Congress will consider to tweak this or that in the legislation (some of which has begun – more about that in a future post).

Brokers are responding to the coming changes and current uncertainty in several ways. Some remain angry that health care reform was passed at all. They rail against the law, call lawmakers names, predict the demise of various political careers, etc. etc. Venting feels good, but outside of the ballot box, it’s hard to argue venting accomplishes much.

Then there’s brokers who ignore what’s happening around them. Today’s just another day and tomorrow will be more of the same. But ignoring reality – change is coming – is no more productive than raging against reality. It’s no doubt better for one’s blood pressure – and may even be kinder to those around you, but it doesn’t accomplish much.

Another group of brokers are preparing for reform. They may be angry about the legislation, but they don’t let their emotions prevent them from dealing with the reality of it. They are examining their business practices, their revenue streams, their client base, their skill sets and they are thinking about the future. They are not making drastic changes right now, but they know they will have to modify, maybe even transform, their business over time.

These brokers are focused on what needs doing now. They know the provisions of the Patient Protection and Affordable Care Act take effect over time, some in a few weeks and and others over several years. They may have hopes for changes to these provisions, but until they’re changed, these brokers know they have to deal with the cards as they’re dealt.

And by doing so these brokers will not only be better positioned for what is to come, but they’ll be more successful in the near term providing them with the resources they’ll need in the future.

Here’s an example of how. The PPACA imposes a host of requirements on individual and group health plans. However, plans can avoid some of these requirements if they meet certain conditions. Such plans are referred to in the law as “Grandfathered” plans because a key criteria is that they have been in-force prior to enactment of the new health care reform legislation (which occurred on March 23, 2010).  Interim Final Rules relating to Grandfathered Health Plans were promulgated by the Departments of Treasury, Labor and Health and Human Services in June 2010. (Comments on the interim rules are due August 16th. While the departments could modify the rules based on this input, they are not expected to be making substantial changes).

There are a lot of resources for understanding the Grandfathered Plan regulations online from folks like Employee Benefit News, the Society for Human resource Management, and HHS’ at their HealthReform.Gov web site. But here’s the gist of what’s involved as I understand it:

Grandfathered plans have to comply with some, but not all, of the Patient Protection and Affordable Care Act. Grandfathered plans can be fully-insured or self-insured, group or individual plans. They must have been in-force on March 23, 2010 and remain with the carrier providing the coverage at that time. While some changes to the plan are permissible, they cannot have significantly increased out-of-pocket costs or reduced benefits. For example, deductibles may and out-of-pocket maximums may increase by medical cost inflation plus 15 percentage points. Plans can voluntarily adopt some of the consumer protection rules contained in the PPACA without losing their status Grandfathered status, but they need to be careful about any significant changes other than complying with new laws or regulations. Significantly, premiums may be increased without jeopardizing a plan’s status. Grandfathered plans must also maintain certain records and there are exceptions for insured collective bargained plans.

Grandfathered plans do not need to meet the minimum benefit requirements laid out in the new health care reform law nor do they need to provide 100 percent coverage for preventive care. They are also exempt from guarantee issue requirements and certain changes to the ways claims will be processed.

However, even Grandfathered plans must comply with the Patient Protection and Affordable Care Act provisions related to pre-existing conditions, excessive waiting periods, the lifting of lifetime maximum benefits (and, for group plans, but not individual coverage, the eventual elimination of annual maximum benefits), and must extend coverage for dependents age 26.

Whether seeking Grandfathered Plan status is in a client’s interest will depend on the specific circumstances for each client. And brokers should contact their carriers to learn more about how each of them are handling this issue.

And that’s the key. Brokers need to be looking at their clients situation, talking to their carriers, and helping their clients navigate this change. Because once a group or individual loses Grandfathered status they cannot get it back. Even though most clients will likely conclude they don’t need to be Grandfathered, its asking the question that matters.

One of the findings from the Trailblazed Sales Project Study I conducted is that High-Growth Producers communicate with their clients more often than do Low- and No-Growth Producers. Doing so results higher retention, more opportunities to meet the needs of those clients, and increases these brokers’ status as a trusted advisor. In short, communicating with clients other than at renewal time is good for your clients and for your business. This is especially so in times of change. If brokers are uncertain about health care reform, employers and individuals are even more adrift. Brokers proactively contacting them about issues like Grandfathered Plan status are demonstrating their value.

There’s another reason why brokers need to be contacting all their clients about the Grandfathered plan issue sooner rather than later. What happens if they meet a competitor who asks that dreaded question, “You mean your current agent has told you about this? That’s just not right!”

Put another way: Clients need help in understanding how the new health care reform law impacts them. Brokers preparing for the future are helping their own clients – and the clients of other brokers – understand these issues. Brokers who are blinded by their anger or who are in denial about reform are not.

There are many ways to respond to health care reform. Some of those responses are just smarter than others.

Filed under: Health Care Reform, Healthcare Reform, Insurance Agents Tagged: Grandfathered Plans, Health and Human Services, HealthReform.Gov, Patient Protection and Affordable Care Act, PPACA
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On August 18, new regulations go into effect in California that are aimed at preventing illegal cancellations of health insurance policies. Rescission, which is the practice of cancelling health insurance policies for mistakes on the health insurance applications, even minor…
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The health care reform debate was anything but dull. Full of political maneuverings, hyperbolic rhetoric, good intentions, misguided policy, misplaced passion, serious concerns and a complex issue and played out across three 24-hour news stations, it’s hard to think of anything more dramatic and engrossing this side of Mad Men.

Until now, that is. Because now the real decisions are being made, the ones that will impact every employer, every carrier, every broker and every American in very direct ways. This is where the nitty gets gritty, the proverbial rubber is introduced to the road, and … well, jump right in with your own metaphor.

They say the legislative process is akin to the making of sausage. But when it comes to unpalatable activities, the implementation can be just as bad – if not worse. And it’s causing sleepless nights for employers, brokers, individuals and insurance executives.

Not that anyone should feel sorry for them, but just for fun, let’s walk a few steps in the shoes of those health insurance company executives. They have a lot of moving pieces to deal with. Consider, as of September 23rd: lifetime benefit caps go away; rescissions are greatly restricted; pre-existing conditions – for children under age 19 they are a thing of the past; specified preventive care services are paid at 100% – no cost sharing allowed; limits are imposed on out-of-network emergency room services; dependents up to age 26 must be covered (but not those dependent’s dependents); new criteria of acceptable appeals processes (for denied claims or treatment) take effect; and new rules concerning non-discrimination in favor of highly compensated individuals come into play.

And this list just describes the impact of the new health care reform bill. States are imposing new rules and regulations at the same time. And let’s not forget the federal mental health parity legislation that took effect July 1, 2010. Then, looming just down the road, there’s the new medical loss ratio requirement (which mandates carriers spend 80 percent of the individual or small group health care insurance premium they take in on medical claims and health quality initiatives beginning January 1, 2011 – 85 percent of large group premium must be spent on these purposes).

Now think about the answers those health insurance executives have to come up with. What specifically to these new rules require? Details on some are sketchy at best. And regulations, like legislation, is open to interpretation. How will state regulators interpret what these federal rules require? How will competitors implement them? Can our systems handle the new calculations, structures and rules without exploding? How do we explain how we’re interpreting the requirements to our customers, brokers and front-line employees? All this while the fallen economy and skyrocketing medical costs buffet their companies like Dorothy’s tornado.

Again, no need to feel sorry for them. This is, after all, what they signed up for. But it is fascinating to consider the complexity of their task. And to make their task all the more exciting, any missteps could put their company – and themselves – on the front page of their local newspaper. And trust me, that’s not where any executive wants to be for anything other than handing over a big check to the United Way.

Then there’s the reality that every decision matters. And with every decision the safety net gets smaller. When Congress passes a law, they have regulators as their safety net. Which is why most every major new law delegates a great deal of responsibilities to federal and state agencies. Those agencies , meanwhile, know that those they regulate will find a way to smooth the edges of the regulations they develop. But carriers – and employers, brokers and others who have to actually implement all this – have no safety net, no one accepting the buck they wish to pass. Lawmakers and regulators deal with what should happen. Employers, brokers, and carriers do things. They deal with what will happen. And if they’re wrong (meaning the regulators or lawmakers upstream think what they did is wrong) the consequences can be dire.

Which is all to say the summer hiatus is over. What I’ll try to bring to you in the weeks ahead is to provide readers with the information needed to track what’s happening now with health care reform, how it’s being interpreted by regulators and how it’s being implemented by health plans, employers, individuals and others. My goal is to provide links to the reports, resources, and articles you need to stay current. And I’ll do my best to provide additional insight and context to what’s happening, to the extent that’s possible.

Given the complexity of what’s involved with implementing health care reform, your help will is greatly needed. For example, a lot of the action takes place at the state level. Please feel free to leave comments with reports about what you’re seeing happening in your neck of the woods, wherever that may be.

There’s a lot happening and a lot to talk about. I hope you’ll be part of the conversation, because here we go. Again.

Filed under: Health Care Reform, Healthcare Reform
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iHealthBeat reports that West Virginia Medicaid along with five other states will receive federal matching funds from the Centers for Medicare and Medicaid (CMS)to help implement electronic health record (EHR) incentive programs.

West Virginia Medicaid will receive $945,000 in federal matching funds. The CMS press release indicates that West Virginia will use the funds for planning activities that include conducting a comprehensive analysis to determine the current status of HIT activities in the state. The funds will be used to gather information on issues such as existing barriers to its use of EHRs, provider eligibility for EHR incentive payments, and the creation of a State Medicaid HIT Plan.

The CMS press release states:

WEST VIRGINIA TO RECEIVE FEDERAL MATCHING FUNDS FOR ELECTRONIC HEALTH RECORD INCENTIVES PROGRAM

In another key step to further states’ role in developing a robust U.S. health information technology (HIT) infrastructure, the Centers for Medicare & Medicaid Services (CMS) announced today that West Virginia’s Medicaid program will receive federal matching funds for state planning activities necessary to implement the electronic health record (EHR) incentive program established by the American Recovery and Reinvestment Act of 2009 (Recovery Act). West Virginia will receive approximately $945,000 in federal matching funds.

EHRs will improve the quality of health care for the citizens of West Virginia and make their care more efficient. The records make it easier for the many providers who may be treating a Medicaid patient to coordinate care. Additionally, EHRs make it easier for patients to access the information they need to make decisions about their health care.

The Recovery Act provides a 90 percent federal match for state planning activities to administer the incentive payments to Medicaid providers, to ensure their proper payments through audits and to participate in statewide efforts to promote interoperability and meaningful use of EHR technology statewide and, eventually, across the nation.

“We congratulate West Virginia for qualifying for these federal matching funds to assist its plan for implementing the Recovery Act’s EHR incentive program,” said Cindy Mann, director of the Center for Medicaid and State Operations at CMS. “Meaningful and interoperable use of EHRs in Medicaid will increase health care efficiency, reduce medical errors and improve quality-outcomes and patient satisfaction within and across the states.”

West Virginia will use its federal matching funds for planning activities that include conducting a comprehensive analysis to determine the current status of HIT activities in the state. As part of that process, West Virginia will gather information on issues such as existing barriers to its use of EHRs, provider eligibility for EHR incentive payments, and the creation of a State Medicaid HIT Plan, which will define the state’s vision for its long-term HIT use.

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These are the tentative rulings for law and motion matters set for Tuesday, July 7, 2009, at 8:30 am in Dept Although virtually all business owners are aware of the recently-enacted health care reform law, many do not know that…
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