Healthcare Reform Proving To Be A Calendar Challenge

Healthcare reform is a significant administrative, clinical, financial and technical undertaking. As the nation

moves forward to implement the mandates, the critical resource of time is proving harder to find and pay for.

As 2013 comes to an end, the changes expected for 2014 will become more apparent and as we move

through the year into 2015, more changes and challenges can be expected.

Coverage Requirements

In the original provisions, employers with 50 or more employees working more than 30 hours per week were

required to offer healthcare benefits to their staff. This was to bolster the drive to improve access to healthcare

through insurance coverage across the nation. Washington has dropped this requirement until January, 2015,

giving insurance companies, managed care organizations and small employers time to think through their

decisions and more smoothly plan and promote the benefit programs. This will also allow for the states more

time to organize how they will manage employer accounts through their web-based insurance exchanges

which are also required to be operational in late 2013.

A primary issue pertaining to the delay is that individuals are still required to obtain health insurance to be in

compliance with healthcare reform regulations. They may have to wait another year to get coverage from their

employer and will have to find other means to obtain it or risk financial penalties. This also means that once

their employer does offer healthcare coverage, the employees may have to change over from the one they

signed up for just a year prior.

Income Verification

Income verification is another requirement dropped until at least 2015. This was required for the web-based

insurance exchanges operated by each state. The technical interfaces between individuals, states and the

Internal Revenue Service are not in place for the web-based insurance exchanges to facilitate the flow of

information to complete income verification of applicants. Under the original provisions, when individuals sign

up for coverage, they needed to provide verifiable income details to the exchanges to determine coverage

eligibility for different plans and the systems will verify what applicants are able to sign up for based on their

IRS records.

This accommodation does allow individuals to still obtain healthcare insurance through the exchanges. The

issue is what happens if the person was not really eligible? How will their claim costs be covered and who will

be responsible for the shortfalls? What are the options for the person to move into a plan under which they will

be eligible if this occurs?

Deductibles And Out-Of-Pocket Caps

The legislation requires that an employer's group health plan or a health insurer offering group or individual

health insurance coverage cannot establish lifetime limits on the dollar value benefits of an enrolled member.

There are further prerequisites mandating deductibles are limited to $2,000 annually for individuals and $4,000

annually for families. These mandates will not go into effect for another year due to technical challenges

involved with compiling medical, pharmacy and other benefits which involve out-of-pocket costs like

prescription copays/coinsurance, office visit bills and other charges.

Some employers use different vendors to manage major medical billing. Others employers may have separate

healthcare benefit plans and utilize a pharmacy benefit manager for the prescription plan. In other cases, a

third party administrator (TPA) is involved with managing the medical and/or pharmacy benefit of an

employer's insurance programs. These vendors do not have systems that openly link to one another or funnel

data into a single database to continually combine/track out-of-pocket costs. There is also confidentiality

considerations involved with the sharing and security of the data passed between different vendors and

employers.

What this means is for at least another year, beneficiaries will likely be faced with high deductibles. For

patients who are high utilizers of benefits, such as those with advanced healthcare needs, they are still

considerably at risk for high copays and/or paying upwards to satisfy the high deductible. A separate concern

regarding the no lifetime cap on benefits is premiums will rise significantly to cover setup costs and ongoing

risk management requirements.

Outlook

Moving into 2014, a sizable portion of the healthcare reform mandates required for the year will be in place.

Segments which are not launched will be delayed until at least 2015. For employers, managed care plans,

insurers, PBMs and TPAs, they will have considerable resources deployed to get the 2014 changes underway

and operating efficiently. They will then have to turn their focus on another year of healthcare reform

implementation. The extended activity adds to administrative costs as will communicating the upcoming

changes to beneficiaries for 2015.

Time and money will continue to be an important resource for beneficiaries as well. For enrollees, they will

have to monitor their medical, pharmacy benefits closely for 2014 as errors in eligibility data, coverage

assignments, plan design and claim adjudication can be expected. Once 2014 is running smoothly, they will

have to re-engage their benefit plan choices, finances and eligibility once again as 2015 promises to be

another of expected and unexpected change.