The U.S. Supreme Court decision upholding the constitutionality of the nation’s health reform law bodes well for Connecticut, where the Affordable Care Act has funneled $192 million in federal funds to implement the law and impacted the lives of millions of residents as of June 2012.
The 5-4 decision upheld a key component of the law – the “individual mandate” that most Americans purchase health insurance or face a penalty by 2014. The justices said the federal government could, under existing tax laws, tax those who do not purchase health insurance.
In Connecticut, the Supreme Court decision means plans now underway – from establishing a state health insurance exchange to implementing community transformation grants to build healthier communities – can move forward with certainty. Since the law’s enactment in 2010, millions of Connecticut residents of all ages have benefited from prescription drug discounts, free preventive care, business tax credits, community wellness initiatives and more.
Here’s a look at the provisions already in effect, the steps Connecticut has taken to implement reform, and how these developments may impact you and your family.
Coverage for pre-existing conditions
Insurers cannot deny coverage to children under the age of 19 who have a pre-existing condition. All discrimination against pre-existing conditions (children and adults) will be banned in 2014. Meantime, people with pre-existing conditions who have been uninsured for at least six months can get coverage with the Pre-Existing Condition Insurance Plan (PCIP) created by the law. As of April 20, 2012, a total of 322 previously uninsured Connecticut residents who were locked out of the coverage system because of a pre-existing condition are now insured through this new plan.
Expanded coverage for young adults
Young adults up to age 26 who do not have job-based health insurance can stay on their parent’s plan whether or not they live at home or attend school. As of December 2011, an estimated 23,000 young adults in Connecticut gained insurance coverage under this provision. Connecticut law requires insurance companies to extend coverage to adult children up to age 26, but self-insured benefit plans are exempt. The federal law, however, applies to self-insured plans.
Prescription drug savings for older adults
Older adults with Medicare who reach the prescription coverage gap receive a 50 percent discount when buying prescription drugs and a 14 percent discount on generic drugs. Known as the “donut hole,” the gap is the point where people must start paying for their medications. Since the law’s passage, Connecticut residents with Medicare have saved $44.8 million on prescription drugs. In just the first five months of 2012, 11,131 state residents with Medicare have saved $8.1 million for an average savings of $731 per person. The gap disappears by 2020.
Free prevention care
Free mammograms, colonoscopies, flu shots, wellness visits and other preventive services are covered without charging a deductible, co-pay or coinsurance. In 2011, a total of 422,154 people with Medicare in Connecticut received free preventive services and another 195,297 people have received preventive care in just the first five months of 2012. A total of 710,000 Connecticut residents were among the 54 million Americans with private health insurance who gained coverage for preventive services in 2011.
Since 2010, Connecticut has received $23.8 million in grants from the Prevention and Public Health Funds created by the new law to prevent illness and promote health.
Connecticut will receive $493,891 each year for five years in “community transformation grants” to address chronic disease and health disparities in five rural counties (Litchfield, New London, Tolland, Windham and Middlesex).
A total of 137,452 Connecticut consumers (individuals, small businesses and large employers) could receive up to $12.9 million in rebates from insurers that spent too much money on administrative costs rather than on health care. The average rebate is $168 for the 77,100 families in Connecticut covered by a policy. The law holds insurance companies accountable by requiring them to issue rebates unless they spend 80 to 85 percent of premium dollars on health care and quality improvements. Insurers who do not meet this standard – known as the “medical loss ratio” or MLR – must issue rebates by August 1. State officials expect the 1 million Connecticut residents who have private insurance will receive greater value for their premium dollars under this provision. The rebates do not apply to people with self-insured plans.
Scrutinizing premium increases
Insurance companies must publicly justify premium increases with rate requests of 10 percent or more triggering an automatic review to determine whether the increase is reasonable. Connecticut has received $1 million under the new law to help fight unreasonable premium increases. In May, Aetna Health submitted two 14 percent rate increases that are now under review by the Connecticut Insurance Department.
Removing lifetime limits
The law bans insurance companies from imposing lifetime dollar limits on health benefits. Already, 1.4 million Connecticut residents – including 525,000 women and 367,000 children – no longer need to worry about lifetime dollar limits on coverage. The law also restricts annual limits on coverage and bans them completely in 2014.
Insurers cannot cancel coverage or deny payment for services because of a technical mistake on the application. Plus consumers can appeal coverage determinations with their insurance company and, if necessary, take an appeal to an independent reviewer. Easy-to-understand information about health care reform is available at www.healthcare.gov.
The Office of Healthcare Advocate (OHA), the independent state agency that helps consumers with health insurance issues, received $396,400 in federal funds to assist additional residents. OHA estimates it generated $1.7 million in savings for Connecticut health care consumers in the first quarter of 2012.
An estimated 36,620 small businesses that employ 192,400 people in Connecticut are eligible to receive up to $166 million in tax credits to offset the cost of providing health insurance to employees. Small businesses are eligible for a 35 percent tax credit (up to 50 percent by 2014), while non-profit organizations can receive a 25 percent credit (up to 35 percent by 2014). More than a third of Connecticut’s small businesses are eligible for the maximum 35 percent tax credit. To qualify, a small business must pay at least 50 percent of their employees’ health insurance costs and have fewer than 25 employees with average wages of less than $50,000 per year. The Internal Revenue Service has no record of the number of Connecticut businesses that have applied for the tax credit so far.
Health insurance exchanges
The law requires states to establish health exchanges by 2014 for individuals and small businesses to compare and purchase health plans. Most Americans will be required to purchase health insurance or pay a penalty beginning in 2014. State lawmakers established the Connecticut Health Insurance Exchange in July 2011. Connecticut has received $7.6 million in grants for research, planning, information technology development and implementation of its health insurance exchange. Connecticut is also among the New England states that received a $35.6 million federal grant to develop and share insurance exchange technology. Based at the University of Massachusetts Medical Center and the Massachusetts Executive Office of Health and Human Services, the multi-state consortium also includes Massachusetts, Rhode Island, Maine and Vermont.
Community health centers
The law increases funding available to community health centers nationwide, including the 183 community health centers in Connecticut. Connecticut has received $45.3 million to create new health center sites in medically underserved areas, increase the number of patients served, expand health care services and support construction and renovation projects.
Information for this story came from: The Connecticut Office of Health Reform and Innovation, the Connecticut Office of Healthcare Advocate, the Kaiser Family Foundation, U.S. Department of Health and Human Services, the Centers for Medicare and Medicaid Services, Families USA and Small Business Majority.