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WASHINGTON — States are taking steps to initiate health insurance exchanges while businesses mull over the future of their benefit offerings at the same time that some insurers are increasing rates by double digits.
Health and Human Services (HHS) Secretary Kathleen Sebelius said earlier this month that more states are on track to implement the health care reform law and establish health insurance marketplaces (exchanges). California, Hawaii, Idaho, Nevada, New Mexico, Vermont and Utah are the latest among those conditionally approved to operate state-based exchanges, and Arkansas was conditionally approved to operate a state partnership exchange.
“States across the country are working to implement the health care law and build a marketplace that works for their residents,” said Sebelius. “In 10 months consumers in all 50 states will have access to a new marketplace where they will be able to easily purchase affordable, high-quality health insurance plans.
According to HHS, at least 20 states (as well as the District of Columbia) have been conditionally approved to partly or fully run their marketplaces — with the remaining states having until February 15 to apply for a state partnership exchange.
In the private sector a major dilemma for many companies this year will be what to do about their health benefits. Businesses have 12 months before the major provisions of the federal overhaul law take effect on January 1, 2014. Employers with at least 50 workers will owe penalties if they don’t cover full-time employees.
Some employers could see health-related costs rise as a result of the law’s requirements. One option would be to opt out of providing health coverage altogether, as employees will have new coverage options outside the workplace — for the employer, the penalties are lower than the typical cost of insurance. However, many employers are believed to be considering more moderate steps.
The large segment of employers that already provide relatively rich benefits will feel only limited immediate impact from the law. Such companies are not expected to take radical action this year, although they could consider longer-term changes.
Among groups monitoring the evolving health care reforms has been the Retail Industry Leaders Association.
“RILA applauds the Treasury Department for including flexible solutions in the proposed rules, which were developed with input from our member companies and the Employers for Flexibility in Health Care Coalition,” said Christine Pollack, vice president for government affairs. “With the law’s effective date less than a year away, employers still face enormous challenges and costs to comply with the health law.”
In a December letter to President Obama RILA highlighted the effect that it says the rules would have on employers. Specifically, RILA argued that “transition relief’’ is needed to allow employers to adapt existing benefits and design future benefits to comply with the law.
“RILA appreciates the inclusion of transition relief in the proposed rules for non-calendar year employer-sponsored health plans. However, relief is still needed for the employer-sponsored plans that must comply with the law in less than a year. Without it, well-intentioned employers will be subject to a variety of penalties, and coverage for millions of Americans could be jeopardized,” said Pollack.
Meanwhile, some health insurance companies are winning double-digit increases in premiums for certain customers despite the fact that a prime objective of the health care law is to stem the rapid rise in insurance costs for consumers.
Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own, reports the New York Times. It says that in California, Aetna is proposing rate increases of as much as 22%, Anthem Blue Cross 26% and Blue Shield of California 20% for some of those policy holders.
