Insurance lawyer Frank Darras: Health care not ‘a stock or commodity’
If you haven’t read every word of the health care reform law enacted by Congress in 2010, don’t feel bad. After all, 2,000-plus pages of legalese are quite a bit more daunting than a best-selling murder mystery.
But something with such a major effect on something as important as your health care should not be ignored. The reform package has numerous provisions scheduled to kick in at various times over the coming years. Meanwhile, legal challenges and repeal attempts are going forward. Could it get any more confusing?
To help clear things up, InsuranceQuotes.com went to Frank Darras, founding partner of DarrasLaw, a California-based law firm that specializes in representing insurance policyholders. Darras is one of the most prominent insurance lawyers in the United States.
InsuranceQuotes.com: The health care reform legislation embodies some pretty big changes, even for those who are already insured.
|Insurance attorney Frank Darras warns consumers against holding off on health insurance decisions because of the continuing debate in Washington, D.C., over health care reform.|
Frank Darras: The health care reform law will enact drastic changes in almost all insurance coverage, including the employer plans that currently are working best. About 177 million people, or 62 percent of those under age 65, are receiving health insurance today through their jobs. Starting in 2014, employers that have 50 workers or more will be mandated to offer health insurance to their employees or be charged a hefty fine. If even just one worker ends up getting coverage that is subsidized by the federal government rather than from their workplace, the employer will owe a $2,000 penalty for every full-time employee on the payroll.
InsuranceQuotes.com: In other words, more people may receive health insurance through work after reform takes effect. One thing people may not realize is that employer-provided insurance usually falls under the Employee Retirement Income Security Act (ERISA). This places tough restrictions on, for example, the ability to sue your insurer for denying a treatment you may have needed.
Darras: Since ERISA was enacted, it has been used as a tool for insurance companies to wrongfully deny insurance coverage and has harmed those it was initially intended to protect. There is great concern that health care reform will force so many people onto ERISA plans that this will lead to limited care and the unintended consequence of rationing.
InsuranceQuotes.com: And what about those who don’t get insurance through work?
Darras: Employees who lost their health insurance when they lost their jobs are finding themselves in a new and, at times, challenging situation. By 2014, all U.S. citizens will be required to have at least basic health insurance coverage or be subject to a phased-in tax penalty that will increase every year a person is not covered.
Beginning in 2014, state-run exchange programs called American Health Benefit Exchanges will offer health insurance to U.S. citizens and legal residents. The costs are based on individual or family income – the more you make, the more you pay for health care coverage. Those at the lower end of the scale will receive credits and subsidies that cover some or all costs for coverage. This group is estimated by the Congressional Budget Office to be 20 million people — including those who live at up to four times the national poverty level, earning $88,000 annually for a family of four.
InsuranceQuotes.com: Another important aspect of the reforms is that a special “grandfathered” status is given to group health plans that were in existence before reforms were enacted. But a plan can lose grandfathered status. What are some things that might cause that to happen?
Darras: There are specific requirements for maintaining grandfathered status as well as certain disclosure and recordkeeping requirements on group health plans that intend to maintain grandfather status. Entering into a new policy or changing insurance carriers after March 23, 2010, even if the benefits remain the same, will nullify the grandfathered status. Eliminating benefits to treat or diagnose a particular condition, raising the cost sharing requirements of the plan, increasing co-payments in excess of the sum of medical inflation plus 15 percent or decreasing the contribution rate of the employer toward coverage will cause the grandfathered status to be lost.
InsuranceQuotes.com: Political and legal challenges still face the reform legislation. Should people hold off on making insurance changes until things shake out?
Darras: The Patient Protection and Affordable Care Act is a hot topic for debate because it effectively reshapes major facets of our health care industry. However, waiting is never a good idea when it comes to protecting yourself and the ones you love. Health care cannot be seen as an optional purchase like a stock or commodity. Being proactive by making sure you have adequate health care insurance before a crisis is more important than holding out for a chance at a better price quote.