How the New Health Care Law Benefits People with Disabilities Feb 4, 2013

Originally published in EP Magazine August 2012

By Jerry Levinson

The health care law, which the U.S. Supreme Court upheld in major part as constitutional on June 26, contains a number of provisions that benefit individuals with disabilities. Officially named the Patient Protection and Affordable Care Act ("ACA" for short), the law bars group health plans and health insurers from rescinding individuals' health care coverage except in very limited situations, prohibits group plans and insurers from denying coverage to children younger than age 19 based on their pre-existing conditions (this applies to everyone regardless of age beginning in 2014), and prevents insurers from placing lifetime and annual dollar limits on most benefits. Here's a closer look at these and other ACA disability-friendly provisions.

Pre-Existing Condition Exclusions Eliminated

Until the health care law was enacted, plans could refuse to accept anyone because of a pre-existing health condition, or they could limit benefits for that condition.

Under the ACA, most health plans cannot limit or deny benefits or deny coverage outright for a child younger than age 19 simply because the child has a "preexisting condition," including a disability. Estimates put the number of children with pre-existing conditions and disabilities at over 17.6 million. And in 2014, the law will prohibit insurance companies from denying coverage or charging more to anyone based on their medical history. This prohibition relating to children under age 19 applies to insured and self-insured plans for plan years beginning on or after September 23, 2010, and will apply for people of all ages for plan years starting on or after January 1, 2014.

This rule applies whether or not a child's health problem or disability was discovered or treated before the application for insurance coverage was made, but doesn't apply to "grandfathered" individual health insurance policies (those in existence on or before March 23, 2010, when the ACA was passed). [ACA § 1201, amending Public Health Service Act (PHSA) § 2704].

As a person who's had a debilitating, chronic disease for a number of years, and has had to cope with pre-existing condition exclusions while trying to obtain insurance protection for his family, I can attest to the fact that this ACA change alone is worth the price of admission and represents a huge change for the better for people with disabilities.

Extension of Dependent Coverage

Before the health care law, insurance companies could remove enrolled children usually at age 19, sometimes older for full-time students.

Under the ACA, a group health plan and a health insurance issuer offering group or individual health insurance coverage that provides dependent coverage of children is required to continue to make such coverage available for an adult child, including those with disabilities and chronic conditions, until the child turns 26 years of age. Both married and unmarried children qualify for this coverage, as do children attending school or not financially dependent on their parents. This rule applies to all plans in the individual market and to new employer plans. It also applies to existing employer plans unless the adult child has another offer of employer-based coverage (such as through his or her job). Beginning in 2014, children up to age 26 can stay on their parent's employer plan even if they have another offer of coverage through an employer.

Children who become eligible to enroll because of this coverage requirement must be provided written notice of their enrollment rights with 30 days to enroll, by no later than the first day of the first plan year beginning on or after September 23, 2010 [ACA § 1001, amending PHSA § 2714].

No Arbitrary Cancellations of Coverage

The Affordable Care Act stops health plans from retroactively canceling or discontinuing insurance coverage (called a rescission) solely because the insured or their employer made an honest mistake on an insurance application.

Under the ACA, group health plans and health insurance issuers generally are prohibited from rescinding health care coverage of individuals covered under the plan or coverage. Rescissions, however, are permitted in very limited circumstances – where the covered individual has committed fraud or made an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage. However, inadvertent omissions and unintentional misrepresentations are not grounds for rescission.

When rescissions are permitted due to fraud or intentional misrepresentation, prior notification to the individual enrollee is required.

All plans, including grandfathered plans, must comply for plan years beginning September 23, 2010.

This provision essentially provides 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 named in the Public Health Service Act (that is, nonpayment of premiums; fraud or intentional misrepresentation of material fact; withdrawal of a product or withdrawal of an issuer from the market; movement of an individual or an employer outside the service area; or, for bona fide association coverage, cessation of association membership). [ACA § 1001, amending PHSA § 2712].

Insurance for the Uninsured with Pre-Existing Conditions

The Affordable Care Act created the Pre-Existing Condition Insurance Plan (PCIP) to make health insurance available to people who have been denied coverage by private insurance companies because of a pre-existing condition. Before the ACA, Americans with pre-existing conditions who did not receive health coverage through their employers had few affordable options to get the care they needed. In most states, insurance companies could refuse to sell them coverage, charge higher premiums, or offer them coverage that excluded benefits for their health conditions.

The PCIP program is temporary and was created to make health coverage available and more affordable to people who qualify. To be eligible for the program, a person must:

• be a U.S. citizen or reside in the U.S. legally;
• have been without health coverage for at least 6 months; and
• have a pre-existing condition, or have been unable to obtain health coverage because of a health condition.

The U.S. Department of Health and Human Services (HHS), with the help of the U.S. Office of Personnel Management and the U.S. Department of Agriculture's National Finance Center, runs the PCIP in 23 states and the District of Columbia. The Federal government contracts with a national insurance plan to administer benefits in those states. In the other 27 states, the state or a state-designated nonprofit organization runs the program. The PCIP program may vary depending on what state you live in.

The state or nonprofit must submit an application; and agree to utilize contract funding to establish and administer a qualified high risk pool for eligible individuals that must:

• provide to all eligible individuals health insurance coverage that does not impose any preexisting condition exclusion with respect to such coverage;

• provide health insurance coverage in which the issuer's share of the total allowed costs of benefits provided under such coverage is not less than 65 percent of such costs; and that has an out-of-pocket limit not greater than the applicable amount described in section 223(c)(2) of the InternalRevenue Code of 1986 for the year involved, except that the Secretary of HHS may modify such limit if necessary to ensure the pool meets the actuarial value limit;

• ensure that with respect to the premium rate charged for health insurance coverage offered to eligible individuals through the high risk pool, such rate shall:

i. except as provided in clause (ii), vary only as provided for under section 2701 of the Public Health Service Act (as amended by the ACA and notwithstanding the date on which such amendments take effect);
ii. vary on the basis of age by a factor of not greater than 4 to 1; and
iii. be established at a standard rate for a standard population; and

• meet any other requirements determined appropriate by the Secretary of HHS. [ACA § 1101].

No Lifetime or Annual Dollar Limits

Many Americans with disabilities, and others who suffer from costly medical conditions, are in danger of having their health insurance coverage vanish when the costs of their treatment hit lifetime limits set by their insurers and plans. These limits can cause the loss of coverage at the very moment when patients need it most. It is estimated that over 100 million Americans have health coverage that imposes such lifetime limits.

Regulations under the ACA, released jointly by the Departments of Treasury, Labor and HHS on June 28, 2010, prohibit the use of lifetime limits in all health plans and insurance policies issued or renewed on or after September 23, 2010.

The regulations also prohibit plans and health insurance issuers offering group or individual health insurance coverage from imposing annual limits on the dollar value of health benefits. Annual dollar limits are less common than lifetime limits, involving 8% of large employer plans, 14% of small employer plans, and 19% of individual market plans.

The rules phase out the use of annual dollar limits until 2014 when the ACA bans them for most plans. Plans issued or renewed beginning September 23, 2010, will be allowed to set annual limits no lower than $750,000. This minimum limit will be raised to $1.25 million beginning September 23, 2011, and to $2 million beginning on September 23, 2012. These limits apply to all employer plans and all new individual market plans. For plans issued or renewed beginning January 1, 2014, all annual dollar limits on coverage of essential health benefits will be prohibited

Employers and insurers that want to delay complying with these rules will have to win permission from the Federal government by demonstrating that their current annual limits are necessary to prevent a significant loss of coverage or increase in premiums. Limited benefit insurance plans – which are often used by employers to provide benefits to part-time workers — are examples of insurers that might seek this kind of delay. These restricted annual dollar limits apply to all insurance plans except for individual market plans that are grandfathered. [ACA § 1001, adding PHSA § 2711].

Free Coverage of Preventive Services

The use of preventive services results in a healthier population and reduces health care costs by helping individuals with disabilities and others avoid preventable conditions and receive treatment earlier.

The ACA, and regulations issued jointly by the Departments of Treasury, Labor, and HHS on February 15, 2012, require that non-grandfathered group health plans (those not in existence on March 23, 2010), and health insurance issuers offering group or individual health insurance coverage, provide benefits for certain preventive health services without the imposition of cost sharing, such as a copayment, coinsurance, or deductible. Recommended preventive health services, such as screenings, vaccinations, and counseling, include:

• evidence-based items or services that have in effect a rating of 'A' or 'B' in the current recommendations of the United States Preventive Services Task Force (see http://www.ahrq.gov/clinic/pocketgd.htm);

• immunizations that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved (see http://www.cdc.gov/vaccines/pubs/ACIP-list.htm); and

• with respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration.

This preventive services provision applies only to people enrolled in job-related health plans or individual health insurance policies created after March 23, 2010. A doctor may provide a preventive service, such as a cholesterol screening test, as part of an office visit. In such cases, note that the ACA allows a plan to charge for some costs of the office visit if the preventive service is not the primary purpose of the visit, or if the doctor bills for the preventive services separately from the office visit. [ACA § 1001, adding PHSA § 2713].

Expansion of Medicaid for People with Disabilities

The Affordable Care Act expands the Medicaid programs by creating a minimum Medicaid income eligibility level across the country. This expansion also helps low-income adults who have disabilities but don't meet the disability requirements of the Social Security Supplemental Security Income (SSI) program—the program that pays benefits to disabled adults and children who have limited income and resources.

Beginning in January 2014, individuals under 65 years of age with income below 133 percent of the federal poverty level (by 2014 forecast to be about $15,000 for a single individual; higher for families) will be eligible for Medicaid. For the first time, low-income adults without children will be guaranteed coverage through Medicaid in every state without need for a waiver and without regard to whether they have a disability, and parents of children will be eligible at a uniform income level across all states. Medicaid and Children's Health Insurance Program (CHIP) eligibility and enrollment will be simplified and will be coordinated with newly created Insurance Exchanges.

The Insurance Exchanges are designed to provide marketplaces for individuals and small employers to directly compare available private health insurance options on the basis of price, quality, and other factors. The Exchanges will become operational by January 1, 2014.

The ACA also expands options for community-based care for people of all ages who have a disability to get help with daily activities while remaining in their homes. The Medicaid program continues to move toward providing more community-based care options as an alternative to nursing homes. [ACA § 2001].

Note that the Supreme Court struck down that part of the ACA [§ 2001(b)(2)] that would have required states to exit the Medicare program entirely if they refused to implement the proposed expansion of Medicaid coverage to certain low-income persons.

Examination Equipment Accessible to the Disabled

The Affordable Care Act improves access to medical diagnostic equipment so people with disabilities can receive routine preventive care and cancer screenings by establishing exam equipment accessibility standards. These standards will be set by the Architectural and Transportation Barriers Compliance Board (Access Board) in consultation with the Food and Drug Administration and, as already proposed (see http://www.access-board.gov/mde/nprm.htm#summary), contain minimum technical criteria to ensure that medical diagnostic equipment, including examination tables, examination chairs, weight scales, mammography equipment, and other imaging equipment used by health care providers for diagnostic purposes are accessible to and usable by individuals with disabilities. The standards will allow independent entry to, use of, and exit from the equipment by individuals with disabilities to the maximum extent possible. The standards do not impose any mandatory requirements on health care providers or medical device manufacturers. However, other agencies, referred to as an enforcing authority in the standards, may issue regulations or adopt policies that require health care providers subject to their jurisdiction to acquire accessible medical diagnostic equipment that conforms to the standards. [ACA § 4203, adding § 502 to the Rehabilitation Act (29 U.S.C 792)].

Other ACA Disability-Friendly Provisions

The ACA contains other provisions that either directly or indirectly benefit people with disabilities, including

• A new Medicaid State Plan option called "Community First Choice" gives States an increase of 6 percentage points in their federal matching rate for providing community-based attendant services and supports as an alternative to nursing home and institutional services for people with Medicaid, including those with disabilities. States must develop "person-centered plans" that allow the individual to determine how services are provided to achieve or maintain independence. [ACA §2401].

• Under the ACA's "Balancing Incentive Program," $3 billion in Medicaid matching funds are available to States that have spent less than 50% of total Medicaid long term care medical assistance dollars in home and community based settings. In March 2012, New Hampshire and Maryland were the first states to receive this new funding [ACA § 10202].

• The law improves data collection on health disparities for persons with disabilities, as well as training and cultural competency of health providers. On October 31, 2011, the U.S. Department of Health and Human Services released final standards to more consistently measure race, ethnicity, sex, primary language, and disability status, in order to improve its ability to highlight disparities in health status in order to reduce such disparities. [ACA § 4302].

• The new law also invests in innovations such as care coordination demonstrations in Medicare and Medicaid to help the one in 10 Americans today who experiences a major limitation in activity due to disability and/or chronic conditions. Thirty-eight States and the District of Columbia expressed interest in developing strategies for implementing person-centered care models that fully coordinate primary, acute, pharmacy, behavioral health and long-term supports and services for Medicare-Medicaid enrollees. Fifteen of these States were awarded up to $1 million to support design of such an approach. States will work with beneficiaries, their families and caregivers, and other partners and stakeholders to develop their demonstration proposals [ACA § 1001].

• Under the ACA's Medicaid Health Home option, States can submit a State Plan Amendment to develop health homes, which are person-centered systems of care that facilitate access to and coordination of the full range of services and supports for people with disabilities and chronic conditions who meet eligibility requirements, including dual eligibles. Participating States get a temporary 90% match for payments to home health providers for these care management, coordination, and related services for the first eight fiscal quarters home health services are offered. [ACA § 3602].

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