By Allison Bell, SENIOR EDITOR/WEB EDITOR, National Underwriter Life & Health.
When President Obama signed the two big health bills into law in March, he may have changed the U.S. disability insurance market in ways that providers, producers and customers cannot yet start to imagine.
Drew King, president of JHA, Portland, Maine, a disability reinsurance and consulting firm, talked about the potential impact of a health reform bill in March, before the bills had become law.
"What happens there has a huge impact on our business," King said at JHA's annual disability insurance conference. "How often are people going to be able to go to the doctor? Who's going to pay for that?"
Other speakers asked what the health system change might do to disability insurers, and disability insurance producers, if small employers suddenly start buying health coverage through a new health insurance exchange system, rather than through agents and brokers.
Many in the disability insurance industry are still struggling to learn enough about the Patient Protection and Affordable Care Act and its companion, the Health Care and Education Reconciliation Act, to come up with questions.
William Schiffbauer, a Washington lawyer, says even health policy experts are just starting to shift from skimming bill summaries to reading and analyzing the actual language of PPACA and HCERA.
Some Republican groups and business groups still hope to find a way to block implementation of PPACA and HCERA.
If the Obama administration succeeds at implementing PPACA and HCERA, then state and federal agencies will create:
--a new "health insurance exchange" insurance distribution system;
--the CLASS voluntary long term care benefits program;
--incentives for states to provide more services for people with severe disabilities who live outside institutions; and
--rules that are supposed to help people with health problems have easier access to health coverage.
Most of the provisions of interest to disability insurers appear to be in PPACA.
The drafters of PPACA took pains to distinguish PPACA programs from private insurance programs.
In the CLASS Act part of the law, for example, "nothing in this title or the amendments made by this title are intended to replace or displace public or private disability insurance benefits, including such benefits that are for income replacement," according to CLASS Act Section 3210(f) in PPACA Section 8002.
Section 9010 of PPACA seeks to raise revenue from health insurers by imposing an "annual fee" on health insurance providers.
In connection with the annual fee, "the term 'health insurance' shall not include insurance for long-term care or disability," according to PPACA Section 9010(h) (3).
Starting in 2014, when PPACA will require health insurers to sell coverage to people with health problems on a mostly community-rated basis, PPACA could help private disability insurance claimants by increasing their ability to buy private health coverage.
Today, many DI claimants must pay high rates to hold on to the health coverage they had before they became disabled, get coverage through a spouse, or fight to get Social Security Disability Insurance so they can qualify to enroll in Medicare.
Even outside the exchange system, during open enrollment periods, "each health insurance issuer that offers health insurance coverage in the individual or group market in a state must accept every employer and individual in the state that applies for such coverage," according to General Reform Section 2702(a) in PPACA Section 1201.
The entities that will sell coverage through the health insurance exchange system may "not make coverage decisions, determine reimbursement rates, establish incentive programs, or design benefits in ways that discriminate against individual," according to PPACA Section 1302(b)(4)(B).
Low-income individuals who buy coverage through the exchange system are supposed to qualify for coverage subsidies, and PPACA could affect the way disability insurers pay benefits, by changing the rules states use when determining whether nonelderly people are eligible for medical assistance.
"A state shall not apply any assets or resources test for purposes of determining eligibility for medical assistance," according to PPACA Section 2002(a).
The CLASS LTC and home aid programs in PPACA also could affect disability insurers and their claimants by covering extra services for some people with private disability insurance benefits-or possibly by not paying for services for otherwise-eligible people who are getting private LTC or disability benefits.
The National Clearinghouse for Long-Term Care Information is supposed to give "information regarding how benefits provided under a CLASS Independence Benefit Plan differ from disability insurance benefits," according to CLASS Act Section 3210(d)(C) in PPACA Section 8002.
But Section 3207(b) in PPACA Section 8002 says the 15-member CLASS Independence Advisory Council should include "individuals with expertise in long-term care or disability insurance, actuarial science, economics, and other relevant disciplines."
Other provisions might affect disability insurers' access to data on people with disabilities.
The secretary of Health and Human Services is supposed to start collecting information about access problems and medical personnel training problems that affect the ability of people with disabilities to get health care, according to Data Collection Section 3101(a)(2)(D) in PPACA Section 4302(a).
The HHS secretary also is supposed to ensure that the Centers for Medicare and Medicaid Services Integrated Data Repository includes data on the Social Security disability insurance program as well as Medicare parts A, B, C and D, to help the Social Security commissioner, the Veterans Affairs secretary, the Defense secretary, and the Indian Health Service director identify potential fraud, waste, and abuse, according to PPACA Section 6401.
Members of Congress and Obama administration officials are hoping PPACA will cut overall health care costs by encouraging people to get the right preventive care and taking better care of themselves. In theory, success in this area could help disability insurers reduce claims costs.
PPACA will establish a National Prevention, Health Promotion and Public Health Council that is supposed to "develop a national prevention, health promotion, public health, and integrative health care strategy that incorporates the most effective and achievable means of improving the health status of Americans and reducing the incidence of preventable illness and disability in the United States," according to PPACA Section 4001.
This article has been reprinted with permission of National Underwriter Life and Health.© Copyright 2010 National Underwriter Life & Health. A Summit Business Media publication. All Rights Reserved.
Allison Bell is Senior Editor of National Underwriter Life & Health, with responsibility for covering health and disability insurance as well as employee benefits. She is also Web Editor for the online National Underwriter L&H Daily News. She can be reached at firstname.lastname@example.org.