HHS details overhaul rules and required benefits

[November 21, 2012]  YOKOTA AIR BASE, Japan (AP) -- The Obama administration has strengthened the prescription drug coverage that will be available to the millions of people who will get insurance through the nation's new health care overhaul starting late next year.

The increase in prescription benefits was part of a long-awaited package of rules to implement the law formally announced on Tuesday by the Health and Human Services Department. The government laid out minimum requirements for health insurance coverage and banned denying coverage to people with pre-existing health problems.

The new rules, once made final, will govern the operation of new health insurance marketplaces, called exchanges, that will debut in 2014.

Having the federal government set minimum standards for what health insurance must cover is a departure from normal practice. Usually, insurance companies, their state regulators and employers play that role. But the Affordable Care Act requires that Washington establish a baseline for minimum coverage in areas that include inpatient and outpatient care, emergency services, maternity and childhood care, prescription drugs, preventive screenings and lab work.

It must also cover mental health and substance abuse treatment, as well as rehabilitation for physical and cognitive disorders, and dental and vision care for children. Such additional benefits are often not fully covered by frugal plans that are now the best that many small businesses can afford.

Many of the details the administration released on Tuesday had been previously announced, but Dan Mendelson, CEO of the market analysis firm Avalere Health, saw one key change: Health insurance plans will now have to cover the same number of prescription drugs as the benchmark plan in their states. That basically means there will be a higher number of prescription drugs covered in each class, such as antipsychotics or antidepressants, than had previously been required.

"It's going to dramatically increase access to pharmaceuticals in the exchanges," Mendelson said. "It's a big deal. This makes the exchange offerings more consistent with what employers offer."

The administration also laid out more details behind previously announced rules that govern how insurers cover people. The rules prevent insurers from denying coverage to someone because he or she has a pre-existing or chronic condition, and they also limit how much insurers can vary premiums by age.

Starting in 2014, the overhaul will expand coverage to millions of people in part by offering tax credits that help them buy coverage on the exchanges. Enrollment for plans sold on the exchanges will start next October, and HHS officials said Tuesday they were confident the exchanges and the coverage sold on them will be ready.

"Now that the law is here to stay, I'm hopeful that states and other partners will continue to work with us to implement the law," ealth and Human Services Secretary Kathleen Sebelius said.

The latest update from the administration seems to be keeping "with the spirit of providing comprehensive benefits at an affordable price," said Neil Trautwein, a vice president of the National Retail Federation, a business group whose members will be heavily affected by the law.

"Of course, the proof is in the price tag of the policy," he said, noting that it's still unclear how the required benefits will affect premiums.

HHS and the Labor Department issued the proposed rules and will take feedback or comments on them for the next 30 days. After that, the government will issue the final rules.

Mendelson said the Obama administration is filling in details of the law that will help insurers and government officials plan for the coverage expansions.

"The administration has to get specific about what the rules of the road are going to be for 2014," he said. "What they're doing now is coming out with all those details."

[Associated Press; By TOM MURPHY]

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