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Three of the Largest U.S. Insurers Plan to Offer Key Benefits Even if Supreme Court Strikes Down Health Law

Source: WSJ - Anna Wilde Mathews

Posted on 12 Jun 2012 by Neilson

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Health benefitsThree of the biggest U.S. health insurers said they plan to keep offering some benefits now required under the federal health overhaul legislation, even if the Supreme Court strikes down the entire law.

Humana Inc., Aetna Inc. and UnitedHealth Group Inc.  all said they would continue to allow young people to stay on their parents' plans until the age of 26, offer a third-party appeals process for coverage denials, and provide preventive benefits such as immunizations without any out-of-pocket expense for consumers.

Humana and UnitedHealth also said they would continue the law's ban on lifetime maximums on most benefit payouts, as well as a promise that policies can generally be rescinded only in cases where a consumer was deliberately misleading in an application.

It is widely believed that it would be tough for the industry and policy makers to backtrack on provisions that consumers have already grown to expect, but some insurers said they planned to reveal their plans after the court ruling, expected later this month. WellPoint Inc., the nation's second-largest health insurer, said it is "fully committed to providing stability in coverage for our members" and will announce its plans after the high court's ruling. Cigna Corp. said it "believes in respecting the court's process" and its leaders "are prepared to proceed as appropriate on behalf of our customers when the court deliberations reach their conclusion."

The Blue Cross and Blue Shield Association said it is encouraging its members to "offer their customers the broadest set of protections possible at an affordable price."

The decision to continue certain provisions aligns the insurers with parts of the law that were designed to be most consumer-friendly. However, the companies stopped short of promising to sell coverage to children regardless of pre-existing health conditions, another requirement under the law. UnitedHealth said in a statement that "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." Humana said it would provide more information after the Supreme Court rules.

Aetna said in a statement that the provisions it flagged were among those it intended to continue, and it would offer more detail after a court ruling.

The insurers also didn't pledge to stick with another feature of the health law that is already in effect, the requirement that insurers spend at least 80% of premium dollars from individuals and small companies, and 85% of those from big employers, on health-related costs.

One limit to the promises of continued consumer features that aren't required by law is that self-insured clients, which are mostly big employers that pay their own health costs, typically have the ability to opt out of benefits they don't want to fund.

In the wake of the new under-26 family plan requirement, about 2.5 million young adults gained coverage, according to federal figures. Researchers at the Commonwealth Fund, a private foundation that supports the health overhaul, recently estimated that around 6.6 million people ages 19 to 25 who received coverage through their parents' plans likely wouldn't have been eligible without the federal law. Its estimate is higher because it includes people who might have previously received insurance from another source, such as an employer.

So far, it isn't clear the new requirements are a major factor driving increased health-insurance costs. Last year's survey of employers by the Kaiser Family Foundation and the Health Research and Educational Trust found that premiums for family coverage went up 9% in 2011, and the foundation's researchers attributed 1.5 percentage points of that boost to provisions of the federal overhaul. However, most covered workers were in plans that had been "grandfathered," or kept largely unchanged so that certain provisions of the federal law wouldn't affect them.

The health overhaul's major provisions are set to take effect in 2014, including requirements that insurers sell coverage to adults regardless of pre-existing health conditions and stop pegging premium rates to health status, as well as a mandate for most people to obtain health coverage.