Feds finalize ACA rules on discriminatory insurance practices

New rules prohibit insurers from denying individuals with pre-existing conditions

HHS Secretary Kathleen Sebelius on Friday released the final rules outlining how insurers can implement individual and group health insurance policies under the Affordable Care Act (ACA).

The rules—which were first proposed in November and will govern how insurers can vary premiums, require preventive coverage in catastrophic coverage plans, and mandate statewide, high-risk pools—regulate insurance plans providing coverage beginning in 2014.

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Rules regulating cost of insurance premiums

Under the finalized rules, insurers will be prohibited from denying coverage to individuals with pre-existing conditions or varying premiums based on factors of pre-existing conditions, health status, claims history, gender, or occupation.

However, insurers will be permitted to vary premiums within certain limits based on age, tobacco use, family size, and geography.

Within those limits, insurers can charge regular tobacco users—defined as anyone who has used a tobacco product four times a week within the previous six months—up to 50% more than nonsmokers. The rules also limit insurers from charging older beneficiaries premiums that are more than three times what younger beneficiaries pay.

The rules also cap the number of children that insurers can take into account when computing family premiums. The cap applies to the three oldest "covered children" under age 21.

Rules on catastrophic coverage, high-risk pools

The rules also mandate that insurers provide a catastrophic coverage plan in the individual market for young adults and others who would otherwise find coverage unaffordable. Although such plans typically come with a high deductible, the new rules require that many preventive services be offered to enrollees at no out-of-pocket cost.

In addition, the rules require that insurers create a single, statewide risk pool for the individual market and another for the small-group market. The alteration means that rate changes will be based on the health risk of the entire pool. Further, states are allowed to merge the two pools into one pool, but student health coverage will be exempt from the risk pool requirements (Baker [1], "Healthwatch," The Hill, 2/22; Daly, Modern Healthcare, 2/22 [subscription required]; Morgan, Reuters, 2/22; Frieden, MedPage Today, 2/23).


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