The Looming Insurance Reform Bill: Unraveling The Proposed Changes And Their Impact

The new insurance reform bill could refer to a number of different pieces of legislation. For example, the Affordable Care Act (ACA) was signed into law by President Obama in 2010 and provides comprehensive health insurance reform in the United States. Another example is the Competitive Health Insurance Reform Act of 2020, which was passed to prevent unfair methods of competition in the business of health insurance. Alternatively, you may be referring to the 2022 bill summary from the Florida Senate, which addresses the lack of access and affordability of property insurance in Florida.

Health insurance marketplaces

The Health Insurance Marketplace is a service that helps people compare and buy health insurance plans. It also helps people find out if they are eligible for tax credits for private insurance or programs like Medicaid or CHIP. The Marketplace is available in every state and offers four categories of plans: Bronze, Silver, Gold, and Platinum. The higher the category, the lower the out-of-pocket costs and the higher the premiums tend to be.

The Affordable Care Act (ACA) was signed into law in 2010 and includes a number of provisions that reform the health insurance market. The ACA aims to put American consumers back in charge of their health coverage and care, ensuring they receive value for their premium dollars. The law bans annual dollar limits and health plans cannot deny coverage or charge more to people with pre-existing conditions. It also expands Medicaid and supports innovation to lower healthcare costs.

The ACA has decreased the number of uninsured Americans and ensured that millions of people have access to benefits and services that meet their healthcare needs. However, there are still challenges, with 20 states not expanding their Medicaid programs, leaving many low-income, uninsured adults without affordable coverage options.

The ACA has made strides in improving the affordability and transparency of health insurance. It has also simplified the consumer shopping experience by establishing standardized plan options with maximum out-of-pocket limitations, deductibles, and cost-sharing features. These changes will make it easier for consumers to compare plans and choose the best option for their needs.

Protections for people with pre-existing conditions

The Affordable Care Act (ACA) has been instrumental in providing protections for people with pre-existing conditions. Under the ACA, insurance companies are prohibited from denying coverage or charging higher premiums to individuals with pre-existing health conditions. This ensures that people with pre-existing conditions have access to affordable health insurance.

The ACA's New Patient's Bill of Rights is specifically designed to help children and eventually all Americans with pre-existing conditions gain and maintain coverage. It also protects Americans' choice of doctors and eliminates lifetime limits on the care they can receive. These protections apply to almost all health insurance plans.

Additionally, the ACA requires insurers to spend a minimum percentage of premium dollars on direct medical care and improving the quality of care. This limits spending on overhead, salaries, and bonuses for insurance company executives. Insurers must also publicly disclose their rates on HealthCare.gov, providing transparency for consumers.

The ACA also allows young adults to stay on their parents' insurance plans until the age of 26, ensuring continuous coverage during a critical period of their lives. Furthermore, the Pre-existing Condition Insurance Plan (PCIP) offers insurance without medical underwriting to those who have been previously denied coverage due to their pre-existing conditions.

The Protect Act, introduced by Senators Tom Cotton and Thom Tillis, further strengthens protections for Americans with pre-existing conditions. It amends the Health Insurance Portability and Accountability Act (HIPAA) to guarantee health insurance coverage regardless of pre-existing conditions and prohibits discrimination based on health status, including higher premiums. The Protect Act ensures that insurance companies cannot exclude coverage for treatments related to pre-existing conditions.

Expansion of Medicaid coverage

The Affordable Care Act (ACA) was signed into law by President Obama in March 2010. The Act was designed to address systematic health inequalities for millions of Americans who lacked health insurance. Expansion of Medicaid was a key component of the legislation, as it was expected to provide coverage to low-income individuals, a population at greater risk for disparities in access to the health care system and in health outcomes.

The ACA's Medicaid expansion extended eligibility to all Americans earning up to 138% of the federal poverty level (FPL; $16,243 for individuals and $33,465 for families of four in 2015). However, as a result of a 2012 Supreme Court ruling, this extension is optional for states to implement. As of May 2024, 41 states (including Washington, D.C.) have adopted the expansion, while 10 states have not.

The impact of Medicaid expansion varies across states, depending on their previous Medicaid eligibility rules. States that have expanded Medicaid have seen a significant increase in the number of enrollees with newly identified diabetes. Research by the RAND Corporation estimates that between 2013 and 2015, 9.6 million Americans gained coverage through the Medicaid program. According to a White House report, in states that have expanded Medicaid:

• 1 million people have gained a regular source of primary care
• Beneficiaries are able to make an additional 11.6 million physician office visits each year
• 5,000 deaths per year can be avoided

Several studies highlight the potential benefits of Medicaid expansion on healthcare access, health outcomes, and financial peace of mind for the poor. In states that have expanded Medicaid coverage, individuals can qualify based on their income alone. If a household's income is below 133% of the federal poverty level (calculated to be 138%), they qualify.

However, it is important to note that even with Medicaid expansion, certain groups may still fall into a "`coverage gap." This includes adults in states that have not expanded Medicaid, with incomes below 100% of the federal poverty level, who don't qualify for Medicaid based on other factors. Their incomes are too high to qualify for Medicaid but too low to qualify for savings on a Marketplace insurance plan.

Overall, the expansion of Medicaid under the ACA represents a significant step toward mitigating health insurance-related disparities and improving access to healthcare for low-income individuals.

Requirements for employers to offer health insurance

The Affordable Care Act (ACA) is a health reform bill that was signed into law by President Obama in March 2010. The ACA is designed to make health insurance accessible and affordable for nearly everyone in the United States. While the ACA does not require businesses to provide health benefits to their workers, certain employers are mandated to offer health insurance to their employees or face penalties.

• Employers with 50 or more full-time employees and/or full-time equivalent employees (FTEs) are required to offer health insurance to their employees. This includes businesses with a combination of full-time and part-time employees that is equivalent to 50 or more full-time employees.
• Employers must offer health insurance that is affordable and provides minimum value to 95% of their full-time employees and their children up to the age of 26. Coverage is considered affordable if employee contributions for employee-only coverage do not exceed 9.78% of an employee's household income (as of 2020).
• A plan provides minimum value if it covers at least 60% of the cost of covered services (deductibles, copays, and coinsurance).
• Employers that do not offer health insurance or offer insurance that does not meet the minimum standards may be subject to a fine. The penalty amount is $2,570 per full-time employee, excluding the first 30 employees.
• If an employer offers coverage but does not meet the minimum value and affordability requirements, they may be subject to a penalty of $3,860 per full-time employee receiving a federal subsidy for coverage purchased on the Marketplace, or $2,570 per full-time employee minus the first 30 employees.
• Employers must provide employees with a Summary of Benefits and Coverage (SBC) form, explaining what their health plan covers and what it costs.
• Employers with over 50 employees may have to make a Shared Responsibility Payment if they do not offer coverage that meets certain standards.
• Small businesses with fewer than 50 full-time employees and FTEs are not required to offer health insurance but may choose to do so through the Small Business Health Options Program (SHOP).

It is important to note that the requirements and penalties for employers regarding health insurance may change over time, and it is recommended to refer to the most up-to-date information available.

Regulation of insurers and insurer transparency

The new insurance reform bill creates a Property Insurer Stability Unit within the Office of Insurance Regulation (OIR) to aid in the detection and prevention of insurer insolvencies in the homeowners' and condominium unit owners' insurance market. Insurers must be referred to the unit for enhanced monitoring upon the occurrence of specified events. The unit must:

• Provide enhanced monitoring when the OIR identifies significant concerns about various aspects of the insurer.
• Conduct a target market exam when there is reason to believe the insurer may be in an unsound financial condition.
• Closely monitor insurer financial data.
• Conduct annual catastrophe stress tests of domestic insurers.
• Update wind mitigation credits.
• Review the causes of insolvency and business practices of insurers referred to the Division of Rehabilitation and Liquidation within the Department of Financial Services.
• Twice annually, provide a report on the status of the homeowners' and condominium unit owners' insurance market.

The bill requires the OIR to publish all orders, specified insurance industry data, and reports issued by the newly created Property Insurer Stability Unit. The scope of the Property Insurer Stability Unit is limited to matters related to homeowners' and condominium unit owners' insurance.

The OIR must include within the annual statistical report an analysis of the availability of reinsurance to domestic insurers selling homeowners' and condominium unit owners' insurance in Florida. The OIR must include within its annual report additional data regarding property insurers against which delinquency or similar proceedings were instituted, a concise statement of the circumstances that led to each insurer’s delinquency, a summary of actions taken by the insurer and the OIR to avoid delinquency, and the results or status of each delinquency proceeding. The OIR must maintain and make available upon request reports relating to the health of the homeowners' and condominium unit owners' insurance market that include specified information regarding market trends and the percentage of policies written by voluntary carriers and the Citizens Property Insurance Corporation.

The bill directs the OIR to make data publicly available detailing the statewide number of policies, amount of premium, number of cancellations, and other data for each property insurer, and specifies that such information is not a trade secret.

The bill requires the OIR to execute an affidavit identifying the grounds for initiating delinquency proceedings against an insurer.

For an insolvency involving a domestic property insurer, the bill provides that the Department of Financial Services must:

• Begin an analysis of the history and causes of the insolvency no later than the initiation of delinquency proceedings against the insurer;
• Review the OIR’s regulatory oversight of the insurer;
• Submit an initial report analyzing the history and causes of the insolvency no later than two months after the initiation of the delinquency proceeding;
• Provide a special report within ten days of identifying any condition or practice that may lead to insolvency in the property insurance marketplace; and
• Submit a final report analyzing the history and causes of the insolvency and the OIR’s regulatory oversight within 30 days of the conclusion of the insolvency proceeding.

Frequently asked questions