Health insurance exchanges 101: Westport broker demystifies pending reforms
Published 4:57 pm, Thursday, April 26, 2012
As the fate of President Obama's health-care law hangs in the balance before the U.S. Supreme Court, a Westport health insurance broker has been appointed to a state agency designed to facilitate implementation of health insurance exchanges that will offer coverage options to the public under the act.
Matthew Fair, regional sales director for Norwalk's Pierson & Smith, a subsidiary of First Niagara Risk Management, was recently appointed to the Brokers, Agents & Navigators Advisory Committee of the Connecticut Health Insurance Exchange. The committee is responsible for identifying the role brokers and agents will play in the exchange and will also evaluate licensing and educational requirements.
Prior to his current position with Pierson & Smith since 2003, Fair spent 12 years with UNUM Insurance Co. and Fortis Benefits in group sales for Fairfield County working with brokers to implement short- and long-term disability insurance programs, life insurance and voluntary products. Fair, who has a master's degree in business administration from New York University's Stern School of Business, served on the nominating committee for the 2011 Healthy Workplace Awards, hosted by the Business Council of Fairfield County, and currently serves on the National Association of Health Underwriters' board of directors for the Connecticut chapter.
Fair said his experience on the health underwriters' board, which works to help lawmakers understand complicated health insurance issues, was a factor in his selection for the state committee.
The Supreme Court in June plans on ruling on the constitutionality of the federal health-care reform law, known as the Patient Protection and Affordable Care Act -- and widely nicknamed, "Obamacare" -- given the law's mandate that all Americans have health insurance or face a penalty. If the court decides the act is unconstitutional, the insurance exchanges, poised to take effect in 2014, may never come to fruition.
In the following interview, Fair discusses the complex health-care legislation and, in simple terms, how it will affect the average American.
Q: What are these health exchanges?
A: In a simple answer, what Connecticut and each state is charged with is the creation of a structured marketplace for individuals and small employers, starting in 2014, to access health insurance, compare plans, enroll in coverage competitively, plenty of choices -- that type of thing. So, small businesses and individuals will be able to access health insurance through the exchange. A couple of other pieces with the exchange is what they're creating would be a one-stop shop for subsidized health programs like Medicaid or what we call Husky in this state for your under-served or underprivileged. ... That's a real tall order trying to pull all that information together, and then on top of it, tracking who's eligible, who's not for subsidy and what have you. And then the last is a source -- a clearinghouse of all information for carriers, for plan performance, ratings. The big push is for transparency.
Q: How will these exchanges work for the consumer?
A: There are some big goals with any exchange and really with health-care reform, and that is to increase access for under-insured. Roughly 8 percent of the Connecticut population ... do not have health insurance, and one of the goals of the exchange is pulling those folks into it because what happens is when they don't have health insurance, they may end up going to an emergency room with no coverage and no ability to pay for that. Ultimately, that feeds into our system. The hospital will not turn them away; they will take them in.
Q: What parts of the health-care reform law are in effect now, given that it is a phased roll-out?
A: It started out as a 2,300-page document that explained what this health-care reform was. It's well over 120,000 pages of law now. ... In reality, what's happened is many things have been changed, pushed out, stopped. ... (The Department of Health and Human Services) has been the body in the federal government that has continually either changed, adopted, pushed out, said, "Look, further guide this down the road." Some of the good things that have happened that I can tell you about are there's no more maximums on your health insurance plans. That's a basic change, but a really important one. The health insurance companies used to be able to cap you at $1 million or $2 million, and sometimes with really serious illnesses, you can get up to that level. Another thing was dependent age 26. In some states that was a big deal. Connecticut had that already, so that wasn't as big of a splash for us. Children under 19, there will be no medical underwriting if they're applying for coverage. They used to be able to be denied. That's another positive change.
Q: What other parts of health-care reform are in effect now?
A: There's a limit on flexible spending accounts now at $2,500. There's a new guide that's coming out this year on summary plan descriptions and benefits of coverage that employers and primarily insurance providers will need to provide an eight-page document with 12-point font with easy-to-understand examples describing their plan. This will be coming out on or after September for renewals going forward.
Q: How will the exchanges help people?
A: I think they will help in the sense that for those that can't afford coverage or have dropped coverage at a particular income level, they've expanded that access. Hopefully the goal is to make that access easier and not filled with loopholes or any medical underwriting because, as of Jan. 1, 2014, there will be no medical underwriting. That's a big change. Right now, if you and I were to go in and you were perfectly healthy and I was not, on an individual basis Anthem or Aetna or whoever the insurance company is could deny me because I was unhealthy and accept you. That goes away. The concern from my professional opinion is the cost. It's still a big concern of mine because what we've addressed is we're going to open up access, we're going to open up a marketplace for everyone in a fair and just way to access health care, but what we're also going to do is help people pay for it who can't afford it. My concern is that the cost is still driving completely out of control for many different reasons.
Q: Who then assumes the financial burden for those who cannot afford insurance to get insurance through the exchange?
A: That will be largely funded in Connecticut for the first two years through federal funds.
Q: And then after that?
A: That's a good question. That's got to be done by the state, which is a real concern. As you very well know, the state and every municipality in the state are struggling with where the money is going to come from for that.
Q: Can you comment on the constitutionality of the act, on which the Supreme Court plans to rule in June?
A: Your guess is as good as mine as where the decision will end up. There's a series of possible outcomes. It could get shot down entirely or they could shoot down the constitutionality piece, but in fact instruct Congress to go back to the table and revise the program and keep some of the good things that are rolling along. I don't know ... I think the funding is the big question. Where do we come up with the funds? That's the big question.
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