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Changes related to the Patient Protection and Affordable Care Act, commonly known as Obamacare, roared on as March led in to April Fools' Day. The slow rollout of the health care program gives us a steady stream of adjustments and finalizations.
This week saw Vermont become the first state to release a premium rate proposal. The Department of Health and Human Services clarified that not all states will receive a waiver for Medicaid expansion alternatives. And some top insurers have a trick up their sleeve to avoid Obamacare requirements until late next year.
Vermont's premium proposal
Vermont became the first state to release proposed premium rates (link opens PDF) for its health insurance exchange, Vermont Health Connect. The story was notable because the rates were flat with the average rates available in the state prior to Obamacare. But as The Washington Post's Ezra Klein pointed out, the lack of change was due to Vermont having strict insurance requirements even before the ACA passed.
Average price for individual coverage ranges from $374.18 to $609.47,
but many beneficiaries will receive federal subsidies to help cover some of the cost. The proposal came from the two participating insurers: Blue Cross Blue Shield of Vermont and MVP Healthcare. State officials will now review the rates and either suggest changes or finalize. Health insurance exchanges will open in October, offering coverage plans that will begin at the start of 2014.
Medicaid expansion stays complicated
The HHS released a document (link opens PDF) further clarifying the potential waivers, or premium assistance that states may receive for Medicaid expansion alternatives.Here's the key bit:
HHS will consider approving a limited number of premium assistance demonstrations since their results would inform policy for the State Innovation Waivers that start in 2017. As with all such demonstrations, HHS will evaluate each proposal that is submitted and consider it on a case by case basis relative to this standard.
The HHS clarification might calm the frenzy states stirred when Arkansas received a waiver to allow federal money to purchase private insurance for the newly eligible. Tennessee recently found out the hard way that HHS will express caution in approving submitted plans.
Insurers avoid Obamacare requirements?
The Los Angeles Times reports that top insurers including WellPoint (NYSE: ANTM ) and UnitedHealth (NYSE: UNH ) may delay their full exposure to the stricter coverage requirements of Obamacare. A loophole allows the insurers to renew existing policies that expire before the end of 2013. Renewal would make the plans, which don't meet Obamacare standards, stretch well into 2014.
WellPoint told the paper that its renewal plans would vary by state. UnitedHealth admitted that some of its renewals would stretch until the end of March.
What's the big deal about some insurance plans lasting a bit longer than anticipated? The health insurance exchanges depend on as many healthy people enrolling as possible. Presumably those who would want to renew before January are people in good health with lower premiums. That means the exchanges will carry more risk burden since insurers can no longer deny people with previously existing conditions.
Foolish final thoughts
Vermont's rate plan earned notice for being the first, but proposed prices from states with inferior insurance laws will provide more insight. The Medicaid expansion debacle remains topsy-turvy, but several more states will undoubtedly attempt waiver applications. Stay tuned -- some of Obamacare's most important changes haven't even started.
A closer look at one big insurer
When President Obama was reelected, shares of UnitedHealth and other health insurers fell immediately. Is Obamacare a death knell for health insurers, or is the market missing out on some of the opportunities the law presents? In this brand new premium report on UnitedHealth, The Motley Fool takes a long term view, honing in on prospects for UnitedHealth in a post-Obamacare world. So don't miss out -- simply click here now to claim your copy today.