One Month Later: Making Health Insurance Reform a Reality

. Through no fault of their own, these children were locked out of the insurance marketplace.

This year, provisions in the Affordable Care Act prohibiting health insurers from excluding coverage of children because of preexisting conditions take effect. When questions were raised about whether insurers would work to avoid covering children with pre-existing conditions, Secretary Sebelius called on the nation’s health insurance companies to provide coverage to these vulnerable Americans. On March 29, health insurance companies agreed to ensure children with pre-existing conditions were not denied coverage.

Adults with pre-existing conditions also suffered under the old insurance industry rules that allowed insurance companies to charge sky-high rates or deny coverage altogether. 

Discrimination based on pre-existing conditions will be banned in 2014.  In the meantime, a new temporary high risk pool program will provide immediate relief. The high risk pool program will offer affordable health insurance coverage to people who are uninsured because of pre-existing conditions. States may choose whether and how they participate in the program, which is funded entirely by the Federal government. If a state chooses not to participate, eligible residents of the state will be able to obtain insurance through a federal high risk pool.

Plans are underway to create the national and state high-risk pools by July 1st.  In early  April, the Department of Health and Human Services asked states to declare how they intend to participate in the program by April 30, 2010. We anticipate that many states will decide to offer their citizens the national high risk pool, but regardless of whether or how a state participates, all Americans who meet the eligibility criteria will have the opportunity to join a high risk pool.

We’re Protecting Your Premium Dollars
For too long, insurance companies could spend your premium dollars on things like CEO salaries, advertising and overhead – instead of improving care and improving patient health.

A new policy in the Affordable Care Act – called the medical loss ratio — creates new incentives for insurance companies to be more efficient, and ensure that consumer premiums are being used for medical care, not excessive and unnecessary administrative costs. 

The law requires large group plans to spend 85 percent of your premium dollars (80 percent in the small group market) on medical care.  It also calls for the National Association of Insurance Commissioners (NAIC) to establish uniform definitions and methods for calculating the medical loss ratio. While the law calls for NAIC to deliver recommendations on how to do this by December, 2010, Secretary Sebelius called on NAIC to deliver its recommendations by June 1, 2010. NAIC has agreed to the accelerated timeline.

Throughout our work to implement this legislation, we’ve made communicating with you one of our top priorities. From town hall meetings with President Obama, to webcasts with Secretary Sebelius and blog posts here on the White House blog, we have worked to answer your questions about this important new law. In the weeks ahead, we’ll be expanding our public education campaign and doing more to ensure you have the facts about reform.

Nancy-Ann DeParle is Director of the White House Office of Health Reform