* Rules codify long-held health reform goals
* Sebelius says details should satisfy states
* Major step forward for healthcare consumers seen
By David Morgan
WASHINGTON, Nov 20 The U.S. administration on
Tuesday proposed new health insurance rules aimed at ending
discrimination against the sick and guaranteeing minimum
benefits for millions of Americans who are expected to obtain
coverage under President Barack Obama's healthcare reform law.
The rules, unveiled by Health and Human Services Secretary
Kathleen Sebelius, provide states and insurers with details
about how the Obama administration intends to achieve its
long-stated goals of guaranteeing access to those with
preexisting conditions and making affordable coverage available
to families through new online health insurance exchanges.
The administration also proposed rules laying out new
consumer protections for wellness and other preventive
healthcare coverage. The public has 30-60 days to comment on the
proposals before the government finalizes them.
The proposed measures were likely to come under fire from
healthcare reform opponents including a growing number of
Republican governors who have rejected the provisions calling on
states to operate their own healthcare exchanges beginning Jan.
States have until Dec. 14, under a newly extended deadline,
to tell the Department of Health and Human Services whether they
intend to pursue their own healthcare exchanges, which are
designed to offer consumers private insurance at subsidized
rates beginning in October with open enrollment.
About 17 states have told the administration they plan to
move ahead on exchanges, while at least eight Republican
governors in recent days have rejected the plan outright or
opted to cooperate with Washington in setting up a hybrid
federal partnership exchange.
Still more states, which delayed implementation in hopes
that Republican Mitt Romney would win the presidential election
earlier this month and repeal the law, are only now deciding
what to do and had called on the administration for more time
Meanwhile, the administration is moving ahead to complete
rule making to ensure timely implementation.
"The information we're putting out today will answer many of
the states' remaining questions, as will additional guidance to
be issued in the days and weeks ahead," Sebelius said in a
conference call with reporters.
"I'm confident states will have what they need to move
forward with creating these critical new health insurance
markets," she said.
Sebelius said she would "sit down" with governors to discuss
their concerns in the coming weeks, but provided no details.
State-level opposition and lethargy have raised concerns
about whether the administration can establish functioning
exchanges in states that need them. But administration officials
insisted on Tuesday that the system will be up and running in
all 50 states and the District of Columbia when the healthcare
law comes fully into force in 2014.
The Patient Protection and Affordable Care Act, the most
sweeping healthcare legislation since the 1960s, would extend
coverage to more than 30 million uninsured people with about
half that number obtaining insurance through the healthcare
exchanges. The remainder would receive benefits from an expanded
Medicaid program for low-income people.
To address regional inequities in the healthcare system, the
law requires insurers to provide benefits across 10 categories
in the individual and small-group markets, whether or not the
plans are part of an exchange.
The categories are: ambulatory patient services; emergency
services; hospitalization; maternity and newborn care; mental
health and substance use disorder services; prescription drugs;
rehabilitative and habilitative services; laboratory services;
preventive and wellness care and chronic disease management; and
The proposed benefits rule largely codifies the contents of
an administration bulletin last December that allowed each state
to select a private or public insurance plan already operating
in its market as a benchmark for benefits.
Dr. Arthur Kellermann of RAND Health, a think tank, said the
approach leaves in place state variations in insurance quality
the law was meant to eliminate. But he said the proposed rule
still represented a significant improvement.
"It is a major step forward for consumers in trying to bring
consistency to the insurance market in terms of covered services
and the value of policies," Kellermann said.
The only major benefits change from last December, according
to officials, is a richer prescription drug benefit. Instead of
requiring insurers to offer one drug per class, the rule calls
for either one drug or the same number as the benchmark plan,
whichever is greater.
However, critics said the new rules lack important details
and definitions about relatively new coverage for the disabled,
the mentally ill and substance dependent, which are subject to a
mandate that eliminates lifetime spending limits in health
"They're going out of their way to avoid doing what the law
envisioned, which is spelling out the details, because it's such
an ugly interest-group food fight," said Edmund Haislmaier of
the conservative think thank, Heritage Foundation.
Health insurance companies would be prohibited from denying
coverage because of a pre-existing condition, or from charging
higher premiums because of current or past health problems,
gender or occupation. The rules also would ensure access to
catastrophic coverage plans for young adults and others who
could not afford coverage otherwise.
The administration also proposed rules for expanding
employment-based wellness programs to help control healthcare
spending and to protect individuals from unfair underwriting
practices that could otherwise reduce benefits based on their
Gary Cohen, an administration official helping to oversee
implementation, said the wellness rules seek to protect
consumers from practices that could be used to reduce benefits
based on a participant's health status.