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Vol. 5, No 3 May/June 1997 |
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Financing Assistive Technology: Highlights of the Kennedy-Kassebaum Bill
The Health Insurance Portability and Accountability Act of 1996 (H.R. 3103) limits insurance companies' ability to discriminate against children and adults with health problems. The legislation is effective on July 1, 1997. The following are some of the key provisions:
PRE-EXISTING CONDITION EXCLUSIONS
For no more than twelve months, group health plans may exclude treatment of someone's pre-existing condition—i.e., a medical condition diagnosed or treated within the past six months.
This twelve month exclusion period is reduced by periods of prior, continuous coverage, whether through private insurance, Medicaid, Medicare, state risk pools, or other programs or plans. Put differently, while someone maintains continuous coverage, pre-existing condition exclusions last at most twelve months, no matter how often the covered person changes jobs or insurance plans. This addresses the problem of job-lock, because people can change jobs without triggering a new exclusion of treatment. This rule applies not only to standard group health insurance and HMOs, but also to self-insured plans (ERISA plans).
- To qualify as continuous, coverage may have no gap longer than 63 days;
- Group health insurers cannot apply pre-existing condition exclusions to newborns or adopted children who are covered within 30 days of birth, adoption or placement for adoption (In this context, placement for adoption means the assumption and retention of a legal obligation for total or partial support of a child in anticipation of adoption) and who are covered continuously thereafter;
- Pregnancy cannot be excluded as a pre-existing condition.
While insurers may not flatly EXCLUDE coverage based on pre-existing conditions, they may charge more for groups that include many people with pre-existing conditions.
SMALL GROUP PROTECTIONS
Insurers that cover small employers (with two to 50 employees) must agree to cover any such small employer and their employees, regardless of potentially costly health problems.
- While insurers may not DENY coverage to any such employers or employees, insurers may charge more for groups with higher health costs.
GROUP TO INDIVIDUAL COVERAGE
Insurers must offer individual coverage to people who lose group coverage, whether through job termination, a change in employment to a job not offering health insurance, or other factors.
- To qualify for guaranteed conversion from group to individual coverage, the individual must meet the following requirements: (a) 18 continuous months of prior coverage under a group plan; (b) exhaustion of full COBRA coverage (if available); and (c) ineligibility for other coverage through programs like Medicare and Medicaid.
NON-DISCRIMINATION AND GUARANTEED RENEWABILITY
Group plans and employers may not deny an individual coverage based on health status, medical condition, claims experience, medical history, genetic information, disability, or status as a victim of domestic abuse.
- Insurers must offer to renew group and individual policies except for non-payment of premiums, fraud, non-compliance with material plan provisions, or other specified factors.
ELECTRONIC TRANSFER OF MEDICAL RECORDS
The legislation encourages the development of a system for the electronic transfer of health information by delegating to the Administration the responsibility to adopt standards and requirements for such a system.
- The system would allow for the transfer of much confidential medical information about Medicare and Medicaid beneficiaries and the privately insured. Many are concerned about how effectively privacy will be maintained.
HOW DOES THE LEGISLATION HELP CHILDREN AND PREGNANT WOMEN?
Families with employment-based health insurance can change jobs without triggering new exclusions in coverage of children with pre-existing conditions. After a family has twelve months of continuous coverage, insurers may no longer exclude treatment of children’s pre-existing conditions.
- Children born with serious medical problems are not subject to pre-existing condition exclusions, if they are covered by a group plan within 30 days of birth and have continuous coverage thereafter.
- Children adopted or placed for adoption are not subject to pre-existing condition exclusions, if they are covered by a group plan within 30 days of birth and have continuous coverage thereafter.
- When a family loses group health insurance, because a parent was laid off or for other reasons, the family must be offered individual coverage, without new pre-existing condition exclusions.
- Group health plans and employers may not deny coverage to families with children who have medical problems.
- Companies may not refuse to renew a family’s health insurance policy because a child develops health problems.
- Group health insurers may not exclude coverage of pregnancy as a pre-existing condition.
WHAT'S NOT IN THE BILL?
The bill does not include a provision the Senate adopted that would have required parity in insurers’ coverage of mental health and physical health benefits. The legislation likewise excludes House provisions that would have exempted many small businesses from state regulation of insurance benefits and quality of care.
House proposals for tax-exempt, medical savings accounts were greatly scaled back in the final version of the legislation.
The bill does not help more than 10 million uninsured children and millions of others who do not receive health insurance through work and cannot afford to purchase it on their own.
Children's Defense Fund, Health Division, 25 E Street, NW, Washington, DC, 20001, Tel: 202-662-3551, Fax: 202-662-3560, Internet E-Mail: sdorn@childrensdefense.org.
