July 1st: A Big Day for Health Reform

As you know, President Obama signed into law health insurance reform legislation in March 2010. The first big events are about to occur, so I wanted to give you a head's up so you'll have accurate information.

First, the federal web portal will go live on July 1st. It will be at www.healthcare.gov. (NOTE: The link won't work until the site goes live on Thursday). When it's fully populated, it will tell you what plans are available to you in your state, what they cost, what they cover -- all the info you need to be able to compare and choose a plan. However, don't expect it to be fully up and running on day one; October 1 is the target date for the portal to have all the information that you will need. But July 1 will be a starting point.

What should be available on July 1 is information about the new Pre-Existing Condition Insurance Plans (PECIP), or what traditionally are known as high risk pools. Under the new law, pre-existing condition exclusions are illegal for children up to age 19 starting at the beginning of the next plan or policy year after September 23, 2010. Thus, if your employer's insurance plan works on a calendar year basis, so your plan year starts on January 1, the prohibition against pre-existing exclusions for children to age 19 is effective on January 1, 2011, the beginning of the plan year following September 23, 2010.

For adults, the rule banning pre-existing condition exclusions does not take effect until 2014. Until then, if you have been without insurance for at least 6 months, and if you can produce evidence that you were turned down for individual insurance due to a pre-existing condition, you will be eligible to enroll in a PECIP, which will cover your pre-existing condition from day one. About 30 states will run their own PECIP; the remaining 20 -- most of which are suing to try to stop the new law from taking full effect -- will allow the federal government to run their PECIP. Premiums will be based on the norm in your state, whereas existing high risk pools tend to be more expensive than the average individual insurance plan.

PECIPs are supposed to begin enrollment on July 1 and coverage on August 1. However, at least some of the states that are running their own PECIP will be delayed a bit; it is no small task to design a whole insurance plan in only three months. I can't tell you what the PECIPs will cover, what (exactly) they will cost, or even what state agency to contact since some states are running them through existing high risk pools and others are organizing them differently. What I can tell you is that, if you can afford the average price of insurance -- not cheap, but not astronomical -- and you haven't had insurance for 6 months, you will qualify . . . IF you get a letter from an insurance company denying you coverage due to a pre-existing condition. So step one is to apply NOW for ANY individual plan, disclose your pre-existing condition on the application, and get that letter turning you down. Once you have that, you will be ready to go when the plan in your state becomes available.

What we believe will be the case with the web portal, then, is that the federal PECIP will be up in some detail on July 1st, along with coverage information, pricing, and instructions on how to sign up in your state. State PECIPs are going to be added as soon as the state has provided the information to the federal government, so in some cases, that will happen on July 1, as well. In addition, the government will be adding information about EVERY SINGLE PLAN available to you in your state. By October 1, you should be able to plug in your zip code and come up with all of your options. This is a very exciting opportunity.

This won't take the place of intelligent shopping. If you read our Comments on the web portal regulations, you know that HHS is still considering how much detail to put on the web portal. Consumer advocates like Advocacy for Patients, in partnership with Lybba, are urging HHS to provide as much information as possible. but the web portal -- like most aspects of early health reform implementation -- is a work in progress.

Still, even if all the i's aren't dotted and the t's aren't crossed, July 1st will be a big day for health reform. Keep checking back here; as always, we'll provide you with information as it becomes available. Jennifer