Week In Review: Appealing Insurance Claim Denials; GOP Questions For Berwick And Kagan; What Fate For COBRA And FMAP?

The biggest story this week was the Obama administration’s release of new rules making it easier for consumers to appeal insurance claim denials.

Kaiser Health News /The Washington Post detailed the regulations and described them as part of the White House’s continuing effort to “boost political support” for the new health law. “The regulations guarantee consumers the right to appeal denials – directly to their insurers and then, if necessary, to external review boards.” The external-review requirement applies to companies that are self-insured – ones that pay their employees’ claims directly rather than buying insurance to cover their workers” (Galewitz and Andrews, 7/22). The Associated Press offered additional details: health plans “must pay the cost of outside appeals, and if they’re overruled, they must cover the disputed claim in full. Consumers can also use the appeals process if their coverage gets canceled. And the rules provide for expedited decisions in medically urgent circumstances” (Alonso-Zaldivar, 7/22).

USA Today outlined some key dates. “The regulations will apply to new health plans that begin on or after Sept. 23. Most health plans have policy years that start Jan. 1.” Existing plans won’t have to comply with the rules unless they change their benefits or cost-sharing significantly (Young, 7/22).

The Los Angeles Times reported that, now, rejection notices “are often unclear, as are the procedures for challenging them.” The new regulations are “designed to simplify the process and expand consumers’ rights” (Levey, 7/22). The Hill notes that not all plans are subject to the rules and quotes the adminstration’s estimate that 41 million people will benefit next year and as many as 88 million in 2013 — “making it the latest in a series of White House efforts to publicize each new benefit of the controversial reform law that comes along” (Lillis, 7/22).

(For more detailed coverage of the regulation, read KHN’s June 23 Daily Report.)

Politico reports on another aspect of the health law’s implementation: “states with the most progressive health policies are having a more difficult experience than others locking down a share of the $5 billion of federal funding for new high-risk pools. Five states – Vermont, Maine, New York, New Jersey and Massachusetts – have ‘guaranteed issue’ of insurance: individual subscribers cannot be turned away because of a health condition.” They also all have “some form of community rating, which bars insurers from charging exorbitant rates based on health, gender and other factors. … [so] there are likely to be fewer residents who have trouble obtaining insurance in these states and, therefore, less demand for the federally funded high-risk plan.” The states want to claim their share of the $5 billion, but “they will have to work much harder to comply with the program” (Kliff, 7/20).

Last week’s controversy about abortion coverage in high-risk pools created a backlash that stretched into this week’s headlines. NPR: “[T]he Obama administration said it would not allow funding for elective abortions in the new program, … despite claims to the contrary by anti-abortion groups. That set off a backlash by abortion-rights groups, who claim the administration is knuckling under to a few anti-abortion Democrats” (Rovner, 7/19). CongressDaily puts these developments into context. “As last week’s skirmish over abortion coverage in state high-risk pools made clear, some sort of legislative fix might be required as confusion remains over exactly what provisions the president’s March 24 executive order applies to. The order only explicitly prohibits federal dollars from being used in state insurance exchanges and the community health center fund”  (McCarthy, 7/23).

(KHN’s Daily Report provided more detailed news summaries on July 19 and July 20.)

The National Association of Insurance Commissioners met in Washington this week as its members shoulder a large burden in implementing the new law. Congress “has left some of the most difficult decisions” to state insurance commissioners, Politico reported in a separate story. The NAIC, “which is made up of the top insurance regulator from each state, must draft recommendations or consult on 10 of the reforms or programs enacted in the health care overhaul, such as restrictions on how much an insurance company can spend on overhead and the establishment of state insurance exchanges.” (Haberkorn, 7/22).

Other health policy highlights this week touched on the administration’s efforts to fill high-ranking positions. Roll Call reported that President Obama Monday submitted his nomination of Dr. Donald Berwick to head Medicare and Medicaid – “a move that comes two weeks after Obama bypassed Congress to put his stalled nominee in the post until the end of 2011.” Obama used the recess appointment after accusing Republican senators of stalling the nomination. But GOP leaders said the appointment “illustrated the president’s attempt to ‘arrogantly circumvent the American people”  (Bendery, 7/19).

The nomination of Supreme Court nominee Elena Kagan gained the Senate Judiciary Committee’s approval this week. On Monday, “Kagan responded to GOP questions that she would weigh stepping aside from hearing high court challenges to the new health care law on a case-by-case basis. She was replying to a list of questions from committee Republicans about her involvement as solicitor general in defending the health law,” according to The Associated Press (Sherman, 7/19). The Christian Science Monitor noted that Kagan said she attended “at least one meeting where legal challenges to the Obama health-care reform law were mentioned, but there was no substantive discussion of the litigation.” Republicans “were seeking clarification on what role, if any, Kagan played in formulating the administration’s response to lawsuits filed challenging the constitutionality of President Obama’s health care reform law” (Richey, 7/19).

(KHN’s June 20 Daily Report provides more detailed coverage of these developments.)

After multiple fits and starts, Congress passed legislation to extend unemployment benefits for laid-off workers. However, lawmakers did so without including two key health related provisions — one to extend the COBRA subsidy and the other to extend enhanced federal Medicaid contributions. 

Bloomberg bottom-lined what this meant: “U.S. workers who lost their jobs as of June 1 won’t be eligible for a 65 percent federal subsidy to help pay for health insurance under [the] unemployment bill.”  That provision and other assistance programs were stripped out because of concerns about how to pay for them. People laid off after June 1 aren’t eligible for the subsidy since it “expired May 31. … Those already receiving the benefit may continue to pay reduced premiums for up to 15 months, according to the Department of Labor.” Without the subsidy, the laid-off who wish to keep the health insurance their former employer offered must pay the entire cost of the premium, which is often cost-prohibitive (Collins, 7/22).

Regarding the extra Medicaid assistance, Kaiser Health News reported that governors “of both parties continue to argue that the current funding level is critical. Without it, they say they will face budgetary crises that will trigger state employee lay-offs and deep program cuts. …  [But] Ann Kohler, director of health services for the American Public Human Services Association and head of the National Association of State Medicaid Directors, said she hasn’t heard of any imminent legislative action. “I am worried that it may not be passed” (Villegas, 7/23).