Although it’s much too soon to tell how the federal healthcare overhaul will affect the way the insurance industry conducts business, the bill may have done a few things right. “Immediate Effects of Health Reform Bill.” A few provisions go into effect in six months; others won’t be enforceable until 2014.
• People whose policies are rescinded through no fault of their own are now protected under federal law. Even though rescission is regulated under the law of most states, carriers tend to ignore the laws and do as they please until they are caught, then pay moderate fines. How the federal government will enforce this provision remains to be seen.
• People with pre-existing conditions can no longer be denied coverage; however, because the bill doesn’t regulate caps and increases, insurers can change as much as they want and increase when they feel like it. The federal plan does provide a government program for people whose health problems make them uninsurable now.
• Insurers can no longer place lifetime caps on benefits and annual limits on coverage.
If insurers don’t find a way to wriggle out of these three reforms, the bill imposes important measures that are necessary to rein in abusive industry practices. But we don’t expect the industry to embrace reform without a fight.
Rather than criticizing the bill for its flaws, which many say include an inability to contain costs, industry and enterprise could turn this into an opportunity to provide products and services both affordable and sustainable for this century.