CarolynBahm.com

I’m reading up on The Patient Protection and Affordable Care Act (PPACA, aka “ObamaCare”). That includes the act itself, amendments passed shortly afterward, and the recent Supreme Court ruling. It’s a lot of pages (906, 55, and 193 respectively), but I want to understand it. I’m documenting my read-through here. I am not a lawyer or a healthcare professional, just a common college-educated person. These are my thoughts, not advice to you. Read the act yourself like the free person you are. ;o).

No-No’s on Rescinding Coverage

The Patient Protection and Affordable Care Act (PPACA) has protections against the insurer yanking away coverage for no good reason. This is called “prohibition on rescissions.”[1] But there are limits. Your coverage CAN be rescinded if you:

• Use fraud, and/or
• Intentionally misrepresent material facts as prohibited by the plan or coverage. (Why do they use blah-blah language like this? What’s the difference in “plan” and “coverage”? Meh.)

They also have to give you prior notice. (I didn’t see any details yet about how MUCH prior notice, however.)

Notice that is ONLY talking about coverage being “rescinded[2]” (terminating the contract for insurance coverage from the beginning, as if the policy had never been issued) – it doesn’t mention cancelling your policy going forward from a certain date, or just failing to renew coverage. (Slippery dudes, aren’t these legislators.)

The way I’m reading “rescission” (the act of rescinding), it refers to the insurance company playing “take-back”: You get your premiums refunded, but you have to give back what benefits you got under the policy, as in anything the policy paid during that coverage period to your doctor, hospital, etc. Yikes.

No-No’s on Cancelling Coverage

Rescinding your coverage isn’t the only way your insurance company can give you the kiss-off: It can also cancel or fail to renew your coverage for certain reasons. For details on this, the PPACA points to two specific sections of ye olde Public Health Service Act: Section 2702(c) and Section 2742(b).  I wavered over a momentary impulse to tear at my hair at the thought of undergoing the tortuous (to me) process of looking something up in that gigantic act again, but I found a different and delightfully authoritative source without having to go bald in fits and snatches. The Internet is my SAVIOR sometimes.

Instead of locating those original texts, I cheated and read summaries in the Federal Register, which said, “These provisions generally provide that a health insurance issuer in the group and individual markets cannot cancel, or fail to renew, coverage for an individual or a group for any reason other than those enumerated in the statute.”

The Register then was nice enough to summarize those reasons, so here you go.

Why your insurer CAN cancel your butt (or fail to renew your policy covering said butt):

• Nonpayment of premiums
• Fraud or intentional misrepresentation of material fact
• Withdrawal of a product or withdrawal of an issuer from the market (I assume this means their company no longer offers that kind of insurance … or the company itself withdraws from the market. You agree?)
• Movement of an individual or an employer outside the service area
• Cessation of association membership (applies to bona fide association coverage only)

For overachievers: You don’t have to hit all of these; one is enough.

Bona Fide Associations

That last one threw me for a loop. (The word “bona fide” always makes me giggle and think of Jethro Bodine trying to sound fancy about ciphering and such.) So I looked it up, with the help of our recurring guest, that good ol’ attention whore, the Public Health Service Act.[3] Basically, it just means groups that are formed for legit reasons, not solely to glom onto some insurance coverage. See details below if you want the fancy lawyer talk.

When you’re talking about a state’s health insurance coverage, a bona fide association has to meet all six of these criteria:

• Has been actively in existence for at least five years;
• Has been formed and maintained in good faith for purposes other than obtaining insurance (emphasis mine)
• Does not condition membership in the association on any health status-related factor relating to an individual (including an employee of an employer or a dependent of an employee);
• Makes health insurance coverage offered through the association available to all members regardless of any health status-related factor relating to such members (or individuals eligible for coverage through a member);
• Does not make health insurance coverage offered through the association available other than in connection with a member of the association; and
• Meets such additional requirements as may be imposed under State law.

I’m going to go soothe my brain with a well-earned diet Coke now.

Footnotes! We Have Footnotes!

I’m reading up on The Patient Protection and Affordable Care Act (“ObamaCare” … although I supposed I really should start using the real acronym, PPACA, instead of the nickname conservatives gave it). That includes the act itself, amendments passed shortly afterward, and the recent Supreme Court ruling. It’s a lot of pages (906, 55, and 193 respectively), but I want to understand it. I’m documenting my read-through here. I am not a lawyer or a healthcare professional, just a common college-educated person. These are my thoughts, not advice to you. Read the act yourself like the free person you are. ;o).

Different levels of healthcare coverage are defined in the Affordable Care Act: bronze, silver, gold and platinum.^[1]

Fretful writer side note: I wish that authors of legislation (and authors in general) would get more original than using metals or jewels (*yawn*) to create memorable scales of intensity. Why not go with increasingly hard woods? Balsa, Magnolia, Pecan, Ebony. Besides, I’d love to hear a Republican defend a “balsa plan” as being good enough for the poor — or see a white conservative gladly signing on for an “ebony plan.”

Ahem. Anyway …

I attempt to translate legalese into people-speak, below. Note that “actuarial value” means “the percentage of total average costs for covered benefits that a plan will cover.” So if your plan has an actuarial value of 70%, then you have a 70/30 plan (you pay the 30% for all covered benefits). (Thank you, healthcare.gov, for coming to my rescue again with your understandable definitions.)

Levels of Coverage

Level of Coverage	What They Say	What I Think It Means(WHY don’t they just write it this way?)
Bronze	A plan in the bronze level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan.	Your bronze plan gives you 60/40 coverage.
Silver	A plan in the silver level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 70 percent of the full actuarial value of the benefits provided under the plan.	Your silver plan gives you 70/30 coverage.
Gold	A plan in the gold level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 80 percent of the full actuarial value of the benefits provided under the plan.	Your gold plan gives you 80/20 coverage.
Platinum	A plan in the platinum level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 90 percent of the full actuarial value of the benefits provided under the plan.	Your platinum plan gives you 90/10 coverage.

 

So, basically, every state that manfully sucks up its frothing “states rights” outrage and signs on for the Affordable Care Act has to run the gamut from bronze to platinum coverage.

Why Have Levels?

I did a cursory search through the act to get a sense of why these definitions are needed. I think it is because states need to provide healthcare plans with different levels of coverage. If you choose to get less (bronze, 60/40 coverage), you pay less. This makes healthcare more affordable for poor people, gives them options to choose, and probably reduces the cost of coverage in general for the state because some people will choose the cheaper levels.

Health Savings Accounts Can Be Considered

The Secretary of Health and Human Services has the option of considering the money your employer pays into health savings accounts[2] when “determining the level of coverage for a plan of the employer.” Here’s what I *think* that means: If you choose to use a health savings account, whatever the company pays into that account for you will count toward the employer’s contribution for your health insurance. Now that’s cool. I didn’t even know employers COULD pay into your health savings account.

Healthcare.gov explains that a health savings account lets taxpayers squirrel away some pre-tax money to use for qualified medical expenses. Funds roll over each year if you don’t spend them (unlike a flexible spending account).

Meh, Just Come Close

There can be “allowable variance” in the bronze, silver, gold, and platinum plans’ coverage as long as the variations aren’t big[3]. For example, instead of the bronze plan offering 60/40 coverage in your state, it could be 58/42 or 62/38. Look for standards to develop on how big the variation can be. A quick search online tells me it may be about +/- 2%.

Catastrophic Plan

Section 1302 (e) seems to offer an alternative to the bronze, silver, gold, or platinum levels of coverage. It’s entitled “Catastrophic Plan.”  Here’s what I *think* it means:

A health plan that does NOT provide the bronze, silver, gold or platinum levels of coverage is still cool as one of the acceptable plans under the Affordable Care Act if it meets ALL of these conditions:

• The only people who can enroll in it are under 30 or have an exemption based on poverty or other hardship[4], AND
• People get the essential healthcare benefits[5] after they’ve paid their share of costs,[6] AND
• There is coverage for at least three primary care visits, AND
• It’s offered only in the “individual market.” (I guess this means catastrophic healthcare plans for individuals, not for families.)

Child-Only Plans

Section 1302 (f) just says that the whole bronze-silver-gold-platinum plan levels must also be offered as child-only plans (under age 21 at the beginning of a plan year).

Time to Flip Back to Earlier Pages

This concludes my look at Section 1302 of the Affordable Care Act. (One section down!) Next, I’ll go BACK to Section 2711 where I started. (Remember that? I was looking at it when the act started referring me hither and yon.)

Footnotes! We Have Footnotes!