Health Plans to Keep Some Reforms, However Court Rules

Published June 11, 2012

| Reuters

Three major U.S. health insurers that provide coverage to millions of Americans said they would keep some protections included in President Barack Obama's healthcare overhaul regardless of how the Supreme Court rules on the law.

The Supreme Court is expected to decide later this month whether to strike down all or portions of the law, Obama's signature domestic policy achievement that was passed in 2010.

UnitedHealth Group Inc, the largest health insurer by market value, announced its intention early on Monday to preserve some of the provisions that have already taken effect. Rivals Aetna Inc and Humana Inc made similar pledges later in the day.

All three said they would still offer coverage for dependents up to age 26 under their parents' plans. The companies will also continue to offer certain preventive healthcare services without out-of-pocket cost-sharing.

"The protections we are voluntarily extending are good for people's health, promote broader access to quality care and contribute to helping control rising health care costs," UnitedHealth Chief Executive Officer Stephen Hemsley said in a statement. "These provisions make sense for the people we serve and it is important to ensure they know these provisions will continue."

The law, known as the Affordable Care Act, represented the biggest overhaul to the $2.6 trillion U.S. healthcare system in nearly 50 years. The three health insurers committed to maintaining some of the provisions that are already in place, although many of the more sweeping changes are due to take effect in 2014.

The law is designed to expand coverage to more than 30 million uninsured Americans, by establishing insurance exchanges and broadening the Medicaid program for low-income people.

Shares of UnitedHealth, Aetna and Humana fell about 1 percent, in line with a decline for the broader Standard & Poor's 500 Index

KEEPING POPULAR POLICY IN PLACE

The provision allowing children to stay on their parents' plans up to age 26 is perhaps the law's single most popular component. It has already helped about 6.6 million young adults to join their parents' health insurance plans last year, according to The Commonwealth Fund, a non-profit organization that analyzes healthcare issues.

Should the law be struck down, Republican lawmakers who opposed Obama's health reform efforts may seek to reinstate the extension of young adults dependent coverage.

The three insurers also said they will maintain a provision that provides clear ways for members to appeal coverage claim decisions.

UnitedHealth and Humana said they will keep two other provisions: forgoing lifetime dollar coverage limits on policies and eliminating rescissions, which are generally considered to be retroactive policy cancellations, except in the case of fraud.

It was not immediately clear where Aetna, the No. 3 health insurer, stood on those provisions.

Cigna Corp, another large national insurer, said it was "prepared to proceed as appropriate on behalf of our customers when the court deliberations reach their conclusion."

UnitedHealth, which serves more than 38 million members, said the protections are effective immediately and will be available to current and future plan members.

At the heart of the Supreme Court case is a requirement in the law that individuals buy health insurance coverage or face a penalty, known as the individual mandate. In return, health plans will have to provide coverage to patients with pre-existing medical conditions that would have disqualified them in the past.

Should the mandate alone be struck down, and the companies are still required to cover people regardless of health status, the insurers have said people will buy insurance only when they become ill, causing premiums to rise.

The law already bars insurers from denying coverage to children up to age 19 with pre-existing medical conditions.

UnitedHealth said it recognized the value of this provision, but said "one company acting alone cannot take that step, so UnitedHealthcare is committed to working with all other participants in the health care system to sustain that coverage."

The ban on denying coverage to those with pre-existing conditions will apply to adults starting in 2014, under the law.

DeAnn Friedholm, director for health reform at Consumers Union, said if a single company "declared they would take any comers, and their competitors do not, then they will immediately attract the sickest population, which would disadvantage them in trying to compete on prices."

"It requires a level playing field so that all the companies have to play by the same rule," Friedholm said.

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