Blue Cross® Blue Shield® New Health Law Q & A

At this moment of change, our customers can rest assured that we will remain true to the heritage that always has differentiated Blue Cross Blue Shield of Arizona. In that spirit, we are committed to moving forward and helping make the legislation work for our customers at www.gnazhealth.com.

As we have done throughout our 71-year history, we will continue to help people navigate the health care system, especially at this time when many people are confused and unsure of what reform means to them. Being a part of the Blue Cross Blue Shield of Arizona family is about so much more than a simple membership card. It is a commitment to service excellence regardless of where you live or what kind of health plan you have. It is financial security in times of health care necessity. It is investments in the communities where you live, work and play. Please refer to www.gnazhealth.com for questions regarding any Blue Cross Blue Shield of Arizona insurance plan.

Q: How does health care reform affect me in the immediate future?
A: There are several changes and regulations within the Patient Protection and Affordable Care Act (PPACA) that take effect over a period of years, from 2010 to 2014.

This year, in 2010, the top reforms that may affect you include:

Access to a temporary high-risk pool for coverage

The federal government will establish high-risk pools to offer comprehensive health coverage to individuals who otherwise would be unable to secure such coverage because of their health status.
Effective Date: June 21, 2010

Elimination of pre-existing condition exclusions for children

The new law says children under age 19 can no longer be subject to pre-existing condition exclusions. BCBSAZ is waiting for further clarification on this requirement. These regulations are pending and will be issued by the United States Department of Health and Human Services (HHS) and other state and federal agencies. As soon as BCBSAZ has more information, we will provide an update here.
Effective Date: For plans starting or renewing on or after September 23, 2010.

Coverage of adult children

The Patient Protection and Affordable Care Act (PPACA) signed into law in March 2010 requires insurers that offer dependent coverage to children to allow young adults up to age 26 to remain on their parents’ insurance plan. Eligibility for health insurance up to age 26 will no longer require verification of student status or marital status.
Effective Date: BCBSAZ is working to implement this provision with its group plans effective June 1, 2010 – in advance of what is required by law. Refer to the employer questions and answers for details on the impact of this provision for small and large groups.

Grandfathering

A “grandfathered health plan” is any group health plan or individual coverage that was in effect on or before March 23, 2010, the date of the new health care reform law’s enactment. The law provides that grandfathered plans do not need to comply with certain reform provisions. Regulations are expected to clarify what changes can be made to plans without jeopardizing grandfathered status.
Effective Date: Health insurance coverage in effect on or before March 23, 2010, is considered grandfathered.

Wellness and prevention

The legislation prohibits cost sharing (deductibles, copays, coinsurance, etc.) for certain prevention and wellness services.
Effective Date: For new plans and certain renewing plans on or after September 23, 2010.

Rescissions

PPACA places restrictions on the practice of rescinding (terminating) a policy. The law states that a policy may only be rescinded in cases of fraud or intentional misrepresentation of material fact.
Effective Date: September 23, 2010.

Lifetime limits

Insurance policies will no longer be allowed to cap coverage at a certain overall amount.
Effective Date: For plans starting or renewing on or after September 23, 2010.

Annual limits

This provision restricts and then prohibits insurance policies from imposing dollar amount-based annual limits on essential benefit plan services.
Effective Date: For plans starting or renewing on or after September 23, 2010.

The following reforms do not begin until 2014:

Guaranteed access to private insurance regardless of any pre-existing medical conditions

Beginning in 2014, the new Patient Protection and Affordable Care Act (PPACA) signed into law in March 2010 will require that all individuals have coverage and insurers must offer coverage to anyone regardless of health status and cannot vary premiums based on health status.
Effective Date: For plans starting or renewing on or after January 1, 2014.

Creation of government marketplaces or “exchanges” to buy an insurance plan

The legislation provides for the creation of new health insurance exchanges to enable individuals and small businesses (and large businesses, if a state elects) to compare and purchase policies and apply for subsidies. A person must buy insurance through the exchange to be eligible for subsidies.
Effective Date: January 1, 2014

Subsidies to help cover the cost of health insurance

The law also offers subsidies to people who might have a difficult time buying insurance. Subsidies are available to those with household incomes of up to 400 percent of the federal poverty level (FPL). For a family of four, 400 percent FPL is $88,200.
Employers and insurers will report policy information to the Internal Revenue Service, which will play a role in enforcing the mandate.
Effective Date: January 1, 2014

Q: I have been previously denied for insurance coverage up to now. When can I apply and be guaranteed coverage?
A: Another requirement under the PPACA is that all individuals have coverage. Insurers must offer coverage to anyone regardless of health status and cannot vary premiums based on health status. However, this provision does not go into effect until plan years beginning on and after January 2014.

Q: I have been unable to get insurance because of pre-existing conditions. What are my options?
A: The new health care reform law requires that by 2014, insurers must offer coverage to anyone regardless of health status. In the interim, the federal government is developing high-risk pools to offer comprehensive health coverage to individuals who otherwise would be unable to secure such coverage because of their health status.

Q: Is my employer now required to offer me health insurance?
A: At this time, no employer is required to offer health insurance to its employees, but the tax credit is designed to encourage small businesses to offer or continue to offer health insurance to their employees.

Q: Is my child with a pre-existing condition able to get health insurance under the new health reform law?
A: The new law says children under 19 can no longer be subject to pre-existing condition exclusions. BCBSAZ is waiting for further clarification on this requirement. These regulations are pending and will be issued by the United States Department of Health and Human Services (HHS) and other state and federal agencies. As soon as BCBSAZ has more information, we will provide an update here.

Q: What does the federal mandate about dependent coverage require?
A: The new federal law says that health policies that provide coverage for dependent children must offer coverage to dependents up to the age of 26, effective September 23, 2010, and after at the start of the group’s plan year/open-enrollment or individual contract renewal date.

In advance of the new health care reform law, BCBSAZ will allow current group policy holders to continue coverage for young adult dependents effective June 1, 2010. This move is intended to fill the gap in coverage many young adults may face after graduation from college.

For Those with an Individual Health Insurance Plan

Q: I am an individual policy holder, what does this mean to me?
A: In 2006, Blue Cross Blue Shield of Arizona began allowing dependent coverage on individual policies through age 29, regardless of student status. The dependent coverage through age 29 is available to married dependents as well, effective on and after October 1, 2010, at the renewal of the individual’s contract. Members can add dependents to their policy at any time subject to policy requirements.

Q: My dependent is currently not on my individual health insurance plan. Can I add them to my coverage?
A: In 2006, BCBSAZ began allowing dependent coverage on individual policies through age 29, regardless of student status. Effective for individual plan contract renewals beginning on and after October 1, 2010, a married dependent can continue coverage as a dependent on the parent’s individual plan up to age 29. Members can add dependents to their policy at any time, subject to policy requirements.

For Those with Insurance through an Employer

Q: I am a group member, and my child is already on my policy. When does this apply for me?
A: If you are a member of a small company, with 2-99 employees, BCBSAZ will continue coverage for a dependent under age 26 on their parents’ group health insurance policies effective June 1.

If you are a member of a large company, with 100 or more employees, your company will have the choice to continue coverage for dependents up to age 26 beginning on June 1, 2010, or at the start of the next plan year or open enrollment on and after September 23, 2010. For many groups, this could mean the change won’t occur until their next open enrollment period.

Q: My dependent is currently not on my employer-sponsored health insurance plan. Can I add them to my coverage?
A: Dependents up to age 26 who are currently not covered under their parents’ coverage will be eligible to enroll at the start of the group’s next plan year, on or after September 23, 2010. Dependents no longer have to be enrolled in college full-time, on a gratuitous humanitarian endeavor or unmarried to continue on the parent’s plan.

Q: I am 23 and just got off my parents’ group health coverage – can I get back on right now?
A: Dependents up to age 26 who are not covered under their parents’ coverage will be eligible to enroll at the start of the group’s next plan year, on or after September 23, 2010.

Q: What about my child who previously rolled off my group policy but is still under 26?
A: Dependents up to age 26 who are currently not covered under their parents’ coverage will be eligible to enroll at the start of the group’s next plan renewal on or after September 23, 2010.

General Questions

Q: Does an adult child dependent need to be financially dependent upon the subscriber?
A: At this time, there is nothing in the law that requires that an adult child be financially dependent upon the policy holder. Nor does the law require that the adult child reside with the policy holder.

Q: Can the adult child be married and still be eligible?
A: Yes, adult children who are married qualify for coverage under this provision if under the age of 26. This is effective for group coverage at the start of the group’s next plan year and for individual coverage on and after October 1, 2010, when the individual member renews their contract with BCBSAZ.

Q: Does the adult child have to be a student to be eligible?
A: No. The requirement for dependents over age 19 to be a full-time student is no longer applicable.

Q: Will grandchildren be covered?
A: Not at this time.

Q: Will the spouse of a married dependent be covered?
A: No.

Q: If I am age 26 now, can I get dependent coverage on my parent’s plan?
A: The dependent coverage is up to age 26 for most group coverage (some large employers may extend dependent coverage beyond age 26). On BCBSAZ individual products, you can remain on your parents’ policy through age 29.

Q: Can an adult child be eligible for dependent coverage if the adult child is eligible for coverage through an employer?
A: Group plans in effect on or before March 23, 2010, are generally considered grandfathered plans under the law. Prior to plan years beginning on or after January 1, 2014, grandfathered plans need only offer this coverage if the adult child is not eligible for any other employer-sponsored coverage.

Q: Are my premiums going to go up?
A: Based on a research study commissioned by the Blue Cross Blue Shield Association, we believe that premiums will increase as a result of provisions in the reform legislation that will guarantee richer levels of benefits than most consumers who obtain their own insurance purchase today. Insufficient discounts for the young and healthy could encourage many of them to forgo coverage. New fees and taxes mandated by the new law will also likely increase the cost of premiums as they are phased in.

There are a number of factors that are driving health insurance premiums, including rising health care costs. Increasing utilization attributable to an aging population, obesity and chronic illnesses; new treatments; prescription drugs and expensive new technologies are the biggest causes of increasing health care premiums. The new law establishes a few pilot programs, but does not aggressively attempt to control rising health care costs.

BCBSAZ will continue to work with doctors, hospitals, employers and consumers to contain costs and insurance premiums while improving access to quality health care. To help accomplish this, BCBSAZ has initiatives in place to reduce unnecessary hospital readmissions, eliminate infections acquired during hospital visits and promote paying doctors and hospitals for quality outcomes to help achieve this goal.

How much premiums increase will depend on the further interpretations by the HHS and the extent to which those who are currently uninsured opt to get insurance coverage.

Q: How much will insurance premiums be for someone who was previously denied coverage?
A: There are too many unknown factors at this time to be able to answer this question. Premiums will depend on the further interpretations by the HHS and the extent to which those who are currently uninsured opt to get insurance coverage.

Q: How does the new health care reform law affect the current health insurance plan I have?
A: President Obama said that if you like the insurance you have, you can keep it. If you purchased a policy on or before March 23, 2010, the plan you purchased is now considered a “grandfathered” plan. It is possible that there will be some minor changes to your plan in order to make the plan compliant with some of the health care reform law requirements.

A policy can lose its grandfathered status. If it does, it becomes subject to all health insurance reforms under the new law. Unfortunately, it is unclear what types of changes trigger the loss of this status. These regulations are pending and will be issued by the United States Department of Health and Human Services (HHS) and other state and federal agencies. BCBSAZ will provide additional information about the impacts of grandfathering and the benefit changes required by reform as soon as possible.

Q: What does grandfathering mean?
A: A “grandfathered health plan” is any group health plan or individual coverage that was in effect on or before March 23, 2010, the date of the new health care reform law’s enactment. The law provides that grandfathered plans do not need to comply with certain reform provisions. Regulations are expected to clarify what changes can be made to plans without jeopardizing grandfathered status. BCBSAZ will provide additional information about the affects of grandfathering and the benefit changes required by reform.

High Risk Pool?

Beginning June 21, 2010, consumers with health problems who have been uninsured for six months and have a pre-existing condition may be eligible to obtain insurance coverage through a new high-risk pool program. The pool is intended to be a bridge to the health insurance exchanges that will be available in 2014. The U.S. Health and Human Service (HHS) department anticipates contracting with states to administer a new temporary high-risk pool program established under the health reform law. While some states already have high-risk pools, Arizona does not. Since Gov. Jan Brewer has already replied to the HHS Secretary Kathleen Sebelius that Arizona cannot afford to create one, it is anticipated that HHS will contract with another organization to operate Arizona’s high-risk pool so that it will be available as of June 21, 2010.