HARRISBURG – When the state General Assembly considers any health care legislation in the new 2015-16 session, its members will need to know how those new policies will impact the health care marketplace and the federal Affordable Care Act (ACA), one of the state’s largest health care insurance companies told members of the House Insurance Committee Wednesday, said Rep. Tina Pickett (R-Bradford/Sullivan/Susquehanna).
Independence Blue Cross (IBC), which serves more than 2.5 million customers in southeastern Pennsylvania, outlined for committee members a brief history of the ACA and explained the individual and employer mandates, essential health benefits and exchanges, along with the future of health care coverage.
“Since the ACA was passed five years ago, this massive federal mandate continues to cause confusion, not only among our residents who may not be fully knowledgeable about all of the regulations and requirements, but even among professionals within the industry,” said Pickett, who serves as chairman of the House Insurance Committee. “That’s why this briefing was informative, in that it gave us insight into some of the challenges being faced by individuals, employers and even the industry itself.”
IBC executives Kimberly Kockler and Alison Beam said that, regardless of anyone’s political views on the ACA, all sides agreed that the status of health care coverage before 2010 was unsustainable and something needed to be done to ensure coverage for more residents.
The ACA has been difficult to understand from a consumer’s point of view since the types of policies available on the exchange vary by coverage, premiums and cost sharing. Even though all plans on the exchange must cover essential health benefits, customers can choose a plan based on a lower premium with higher cost sharing – known as a bronze plan – or a plan with a high premium and lower cost sharing – known as a platinum plan, and two levels in between.
Also the executives said the market has yet to see the effects of the individual mandate, whether customers will change insurance plans during a yearly open enrollment period or pay the IRS penalty. Additionally, 2015 is being called the “year of the employer” in that it will be interesting to see how the employers will handle their requirements and if they will drop coverage for employees and face the growing financial penalty.
From a state perspective, the ACA still allows states to impose additional insurance coverage mandates but some questions remain about how much states would have to pay for those additional lines of coverage. In addition, many state laws regarding insurance do not apply to employers that self-insure – meaning they pay premiums, take shared risk and pay out claims, etc. Self-insured employers make up a significant portion of the insurance marketplace.
The ACA also limits the amount of profit insurance companies can make on the exchange plans, making it the only industry within health care to require rebates to individuals if they are not spending a certain amount on health care. One of the upcoming debates will be on the impact of that mandate and if other industries will be subject to similar rules.
Even though the U.S. House of Representatives has voted successfully to repeal the ACA, everyone agrees that there still needs to be a structure in place to provide health care coverage to residents.
“This meeting was informative in that it shows us where we are and where we’re headed,” Pickett noted. “As additional requirements roll out for individuals, employers and insurance companies, it’ll be incumbent upon us to make sure we’re fully informed of the implications on our own state policies and if there is anything we can do at the state level to ease those impacts.”
Watch the full hearing here
Representative Tina Pickett
Pennsylvania House of Representatives
Media Contact: Jennifer Keaton