Words Have Consequences

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Download ACA PDF file >>> Affordable Care Act

Download HIPAA PDF file >>> Public Health Service Act

Illinois appears to follow guidelines for enrolling individuals into the state’s Affordable Care Act’s (ACA) pre-existing condition insurance plan, but Illinois’ interpretation of  the  ACA’s wording may be questioned. In its interpretation, Illinois does not allow enrollment if a person has insurance coverage even though it excludes pre-existing conditions.

A virtually contradictory interpretation can be found on the federal government’s website HealthCare.gov.  The federal government sets conditions of who is eligible to apply to the government for pre-existing condition insurance plans in states that opted out of participation. To apply, you will need to provide a copy of one the following documents:

  • A denial letter from an insurance company licensed in your state for individual insurance coverage (not health insurance offered through a job) that is dated within the past 6 months.  Or, you may provide a letter dated in the past 6 months from an insurance agent or broker licensed in your state that shows you aren’t eligible for individual insurance coverage from one or more insurance companies because of your medical condition.
  • An offer of coverage from an insurance company licensed in your state for individual insurance coverage (not health insurance offered through a job) that is dated within the past 6 months. This offer of coverage has a rider that says your medical condition won’t be covered.
govt pre-existing condition insurance apply

It is not logical that if a state runs the program, it can exclude people, while if the federal government runs the program, those same people could be included in the plan.

This analysis explores in more detail how Illinois and by extension, other states may have come to the conclusion they did and why that may not be the correct interpretation.

Illinois Pre-existing Condition Insurance Plan (IPXP)

To qualify for insurance in IPXP, a person must meet three conditions that seem to mirror the text of the Affordable Care Act. The Affordable Care Act (ACA) established eligibility criteria for federally funded high risk pools like the IPXP.  The pertinent wording of the Affordable Care Act that states in section 1101 (d).  An individual shall be deemed to be eligible … if such individual:

  1. Is a citizen or national of the United States or is lawfully present in the United States
  2. has not been covered under creditable coverage (as defined in section 2701(c)(1) of the Public Health Service Act as in effect on the date of enactment of this Act) during the 6-month period prior to the date on which such individual is applying for coverage through the high risk pool; and
  3. Has a pre-existing condition

These same provisions in IPXP require that
To enroll, a person must:

  1. Be a U.S. citizen, national, or legal resident;
  2. Be uninsured for 6 months; and
  3. Have a preexisting condition.”

The IPXP application specifically notes regarding item 2, “that if you currently have insurance coverage that doesn’t cover your medical condition, you are not eligible for IPXP”.

This raises the question of how Illinois adopted their meaning of ACA’s wording. Words have consequences and so it is important to determine what the Public Health Service Act (HIPAA) actually said and meant by its use of the phrase “creditable coverage” and did Illinois misinterpret it?

Public Health Service Act (HIPAA)

HIPAA’s opening paragraph sets forth its purpose: “… to improve portability and continuity of health insurance coverage in the group and individual markets, to combat waste, fraud, and abuse in health insurance and health care delivery …”

HIPAA contains five main components or “Titles”, the first of which is “HEALTH CARE ACCESS, PORTABILITY, AND RENEWABILITY”.  That title is divided again into two subtitles, “Group Market” and “Individual Market”.

In general, under Individual Market Section 2741(a)(1) health insurers may not decline coverage to or impose any pre-existing condition exclusion on “eligible individuals”.  However, Section 2741(a)(2) allows states to implement an “acceptable alternative mechanism”.  One acceptable alternative is a state managed high risk pool which Illinois has, so private health insurers in Illinois may deny coverage or include pre-existing exclusions in their policies since an alternative is available.

However, the act does not change the definition an “eligible individual” which is one who (a) has 18 or more months of “creditable coverage” and (b) whose most recent prior “creditable coverage” was under a group health plan.

CREDITABLE COVERAGE DEFINED

HIPAA defines “creditable coverage” in Section 2701(c)(1) to mean with respect to an individual, coverage of the individual under any of the following:  a group health plan; health insurance coverage; or… any of 8 other government health insurance plans.  “Such term does not include coverage consisting solely of coverage of excepted benefits (as defined in section 2791(c))”.

GROUP HEALTH PLAN DEFINED

Creditable coverage refers to coverage in a “group health plan” that also needs definition. A group health plan Sec. 701(a)(1) means an employee benefit plan that provides payment for medical care directly through insurance, reimbursement, or otherwise.  In short, what most people think of as basic group health insurance.

EXCEPTED BENEFITS DEFINED

Creditable coverage also introduces another concept – “excepted benefits”. Including this definition allows a contrast to group health plans that provide creditable coverage.  Given the number of excepted benefits, of which only a sample is shown below, it is clear that HIPAA intended only a few basic types of basic health benefits to be considered creditable coverage.

Excepted benefits as defined in Section 2791(c) includes but is not limited to:

  • Coverage only for accident, or disability income insurance, or any combination thereof.
  • Coverage issued as a supplement to liability insurance.
  • Liability insurance, including general liability insurance and automobile liability insurance.
  • Workers’ compensation or similar insurance.
  • Limited scope dental or vision benefits.
  • Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof.
  • Coverage only for a specified disease or illness.
  • Medicare supplemental Insurance.

Combining references and definitions from HIPAA, to be eligible for ACA’s pre-existing condition insurance plan, prerequisite #2 requires an individual to:

  • have 18 or more months of a group health plan that provides payment for medical care, AND
  • have not been covered for 6 months under either a group health plan or a health insurance coverage

Now if an adult person is unemployed, has recently graduated or lost a job, that individual is not likely to be covered by a group health plan. Such individual, however, may be insured under individual health insurance coverage of which there are several types, of which one of the more common is “short-term limited duration insurance.”

INDIVIDUAL HEALTH INSURANCE COVERAGE

Section 2791 (b) (5) states: The term ‘individual health insurance coverage’ means health insurance coverage offered to individuals in the individual market, but does not include short-term limited duration insurance. Oops.  This means that HIPAA considers one of the more common forms of individual health insurance not to be insurance at all.

PULLING IT ALL TOGETHER IN ILLINOIS

Recall from the beginning of this essay, the IPXP application form specifically states “that if you currently have insurance coverage that doesn’t cover your medical condition, you are not eligible for IPXP”. This requirement is NOT one of the ACA requirements.  And ACA in turn, references HIPAA that pointedly declares “short-term limited duration insurance” does NOT constitute insurance coverage at all. Conclusion: Illinois may have incorrectly defined short-term limited duration insurance as health insurance which definition specifically contradicts HIPAA definition.

CONCLUSION

It is clear that both the intention as well as the wording of the ACA  and HIPAA acts allow persons who once had but were later denied health coverage or who have coverage but with pre-existing exclusions, to apply for and receive coverage under the ACA pre-existing condition insurance plans.

Allegedly, enrollment in state ACA pre-existing condition insurance plans has been running behind projections. Is it possible states are restricting enrollment in a manner similar to Illinois?  It is something worth investigating further.

Disclaimer: While having extensive years of legal experience demonstrated in this analysis, the author is not a licensed attorney. What has not been verified is whether later amendments to the HIPAA changed any of the provisions mentioned above.

 Download PDF Report >>>  Words Have Consequences

Download ACA PDF file >>> Affordable Care Act

Download HIPAA PDF file >>> Public Health Service Act

Affordable Care Act Revisited

Now that Republicans have introduced in Congress a law to repeal ACA, it is fair to ask what is in this legislation that is so objectionable.  Critics have complained that the 2,400 page Affordable Care Act (ACA) is too over-reaching and must be repealed. While the ACA is admittedly large, the sample page (standard 8.5 inch wide paper) is indicative of the 2,400 pages. The actual content is but a small fraction of a typical page of text. 

AHA legal text sample

One is encouraged to read the article Affordable Care Act – Contents that provides an outline of all the provisions of the AHA. Less than 20% of the act deals with health insurers and insurance coverage where most of the controversial issues exist. Over 80% of the act is relatively non-partisan, non-controversial that attempts to solve many less obvious though not less serious  issues facing America’s health care system.

A good review of the contents themselves was published by the Association of American Medical Colleges (AAMC).  As a note of caution, these articles are aimed at their members and may prove a bit technical to the general reader. A number of different reports that can be viewed Analysis of Health Care Reform Provisions or downloaded. Take politics out of the discussion and the provisions don’t seem nearly as objectionable.

Sure, the ACA has faults and can certainly be improved. But no legislation is ever perfect.  Finally, one can ask in light of pressing national issues of  jobs, whether Americans want to revisit the long drawn out process to carry out Republicans’ promise to “repeal and replace” the entire act.

New York Times Deficit Reduction Puzzle

There has been much talk about deficit reduction as of late.  Now deficits are affected by both spending and revenue receipts. One of the big spending items is government health care programs.  The puzzle below shows a number of components of both spending and receipts that one can adjust and see the effect on deficits.

In November, 2010, two columnists from the New York Times, David Leonhardt and Bill Marsh created an on-line interactive Deficit Reduction Puzzle wherein the user can select from a list of spending reduction items and revenue raising items to visually see their impact on the deficit.  This author has created an Excel spreadsheet version of this puzzle that further separates the deficit reduction effects into the two components as shown in the screen shot below.

New York Times Puzzle to Tackling the Deficit

Tackling The Deficit Puzzle from the New York Times

While only a sample of items are shown above, the actual puzzle includes all the options from the NY Times puzzle for both reducing spending and raising revenue.

Download Microsoft Excel Puzzle >>> NYT Deficit Reduction Excel Puzzle

Inequality of Wealth and Income

Download PDF Report >>> Income-Wealth

This article is related to health care costs because new sources of revenue will be needed to help balance the federal budget.  There simply are not enough reasonable cuts in spending to close the deficit gap.  Tax increases will be necessary and this analysis examines effects of past tax policies.

SUMMARY

After years of neglect, political America has awakened to the problems of rising deficits that are developing  at all levels of government. Economists and politicians may argue endlessly about  causes and solutions.  Cutting spending, raising taxes, growing the economy all have their place.  This essay examines income, wealth, and taxes, not just in terms of rates but also where those rates have affected income growth.

By every measure, U.S. wealth and income have skewed heavily and continue to tilt to the top 1%, approaching an unhealthy situation. A robust middle class will spend more of its earnings than the wealthy, and in this country consumer spending constitutes the largest economic component.

METHODOLOGY OF REPORT

All the data used in this report are derived from government sources. Income and tax data are from Congressional Budget Office (CBO).  CBO published tax and income data from 1979 through 2007, dividing data of households into five quintiles (20% each) as well as the top 10%, 5%, and 1%. Wealth data come from the Federal Reserve’s 2007 Survey of Consumer Finances Chartbook divided into four quartiles plus top 10%.

DISCUSSION – Tax Rates

Beginning in the Reagan administration, there has been an overall trend towards lower tax rates as shown in the graph below.  Despite differences in timing, the total average tax rate for middle America has declined virtually the same as for the highest 1% of households.

The next graph shows trends in who is paying how much in total federal taxes.  Here clearly shows tax rate reductions have brought down the share of lower 80% of all taxpayers from 45% of total taxes to 35%. One group that has an increased share is the top 1%, rising from 15% to a 28% share.  With declining rates and overall increases in share of tax payments can mean only one thing.  The top 1% are increasing income at a significantly faster rate than other taxpayers. Continue reading

Inequality of Wealth and Income – Paged

Download PDF Report >>> Income-Wealth

This article is related to health care costs as new sources of revenue will be needed to help balance the federal budget.  There simply are not enough reasonable cuts in spending to close the deficit gap.  Tax increases will be necessary and this analysis examines effects of past tax policies.

SUMMARY

After years of neglect, political America has awoken to the problems of rising deficits being incurred at all levels of government. Economists and politicians may argue endlessly of causes and solutions.  Cut spending, raise taxes, grow the economy all have their place.  This essay examines income, wealth, and taxes, not just rates but where those rates have affected income growth.

By every measure, U.S. wealth and income has skewed heavily and continues to tilt to the top 1%, approaching an unhealthy situation. A robust middle class will spend more of its earnings than the wealthy and in this country consumer spending constitutes the largest economic component.

METHODOLOGY

All the data used in this report are derived from government sources. Income and tax data are from Congressional Budget Office (CBO).  CBO published tax and income data from 1979 through 2007, dividing data of households into five quintiles (20% each) as well as the top 10%, 5%, and 1%. Wealth data come from the Federal Reserve’s 2007 Survey of Consumer Finances Chartbook divided into four quartiles plus top 10%.

GO TO DISCUSSION – Tax Rates

GO TO DISCUSSION – Household Income

GO TO DISCUSSION – Household Wealth

CONCLUSION

The wealthy always had the lion’s share of income and assets.  At some point, however, excessive accumulation of wealth can tend to stymie economic growth.  A robust middle class will spend more of its earnings than the wealthy and in the US economy, consumer spending constitutes the largest economic component.

Download PDF Report >>> Income-Wealth

 

Surgical “Check Lists” Improve Quality, Lower Costs

Read Full Analysis at >>> New England Journal of Medicine – Check Lists

As most anyone who has ever looked into an airplane cockpit while boarding, the pilot and crew were going through a check list to insure nothing in preparation for the flight was overlooked, assuring safety to the crew and all the passengers.

This check list method, it was found, can similarly provide favorable impacts on surgical outcomes. A January 29. 2009 article by the New England Journal of Medicine noted some of the benefits from using this process.  To quote from the background of the article:

“Data suggest that at least half of all surgical complications are avoidable. Previous efforts to implement practices designed to reduce surgical-site infections or anesthesia-related mishaps have been shown to reduce complications significantly. A growing body of evidence also links teamwork in surgery to improved outcomes, with high-functioning teams achieving significantly reduced rates of adverse events.

In 2008, the World Health Organization (WHO) published guidelines identifying multiple recommended practices to ensure the safety of surgical patients worldwide.  On the basis of these guidelines, we designed a 19-item checklist intended to be globally applicable and to reduce the rate of major surgical complications.”

Read Full Analysis at >>> New England Journal of Medicine – Check Lists

Leapfrog Group Rates Hospitals

Additional consumer information regarding healthcare choices is one step in improving the healthcare system.  Among the organizations providing this type of data is Leapfrog Group.  Their website says it best.

From Leapfrog website:

The Leapfrog Group is a voluntary program aimed at mobilizing employer purchasing power to alert America’s health industry that big leaps in health care safety, quality and customer value will be recognized and rewarded. Among other initiatives, Leapfrog works with its employer members to encourage transparency and easy access to health care information as well as rewards for hospitals that have a proven record of high quality care.

The Leapfrog Hospital Survey is the gold standard for comparing hospitals’ performance on the national standards of safety, quality, and efficiency that are most relevant to consumers and purchasers of care. Hospitals that participate in The Leapfrog Hospital Survey achieve hospital-wide improvements that translate into millions of lives and dollars saved. Leapfrog’s purchaser members use Survey results to inform their employees and purchasing strategies. In 2009, 1206 hospitals across the country completed The Leapfrog Hospital Survey.

Go to Website >>> Leapfrog Group