ACA triggers insurer reforms...but the law is still necessary.

(First published on the National Physicians Alliance blog, June 12 2012)
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Yesterday, three major insurers announced that they would keep in place major insurance reforms introduced in the Patient Protection and Affordable Care Act (ACA), regardless of how the Supreme Court decides regarding the law's constitutionality.

UnitedHealth, Aetna, and Humana all announced that they would continue allowing children under age 26 to remain on parents' health insurance plans, allow independent appeals of insurance decisions, and cover certain preventive services.

Although this move by these for-profit insurers appears to be a good thing, there are two important considerations to remember. The first is that none of these insurers have agreed to issue insurance plans regardless of pre-existing conditions. If an individual with prior medical problems applies for insurance from these organizations, the insurers can still deny coverage. This would no longer be possible once the ACA is fully implemented. Therefore, the law is still critically important to make sure that all Americans will have access to health insurance coverage.

The second consideration is that the ACA was the catalyst for insurers to change their practices. For-profit insurers have been around for a long time, and had plenty of opportunity to implement these reforms on their own. However, none did until the ACA was passed and signed into law. The provisions that the insurers plan to keep in place are the law's most popular provisions, but they were not established by the insurers in a vacuum. The ACA put these reforms in place, the public realized that they were beneficial, and now the insurers have decided to reform their practices accordingly. If not for the ACA, I deeply doubt we would have seen any sort of insurance reforms of this sort. In fact, when the law was being developed, insurers defended their rights to rescind patients' coverage. The ACA deserves full credit for forcing insurers to enact these important patient protection reforms.

Despite the fact that insurers have belatedly agreed to support these patient protections, the law is still critically important:

• Not all insurers have agreed to sustain these important reforms. Blue Cross/Blue Shield, Wellpoint, and Cigna are hedging their bets until the Supreme Court's decision is known and declined to make any commitments in response to yesterday's announcements from UnitedHealth, Aetna and Humana. Considering the size of these insurers, this would place many Americans at risk of losing insurance coverage if the ACA's protections were lost.
• The ACA provides subsidies for Americans who cannot afford to pay for private insurance out-of-pocket. These subsidies make health insurance, which is otherwise prohibitively expensive for many Americans, affordable and available. Without the ACA, the insurers could claim to make their coverage available to many in the sense that it is technically available, but could price it at a level that places it out of reach.
• One of the major ways that the ACA will expand insurance coverage is by expanding Medicaid. This will provide access to health insurance for millions of low-income Americans, something that these actions by the insurance companies will not affect.
• The ACA requires private insurers to spend 80-85% of the money they receive in premium payments on providing health care services (instead of using this money for administrative costs, salaries, etc). This is known as the medical loss ratio (MLR). The ACA's MLR requirements will mean that the money individuals pay to ensure they have insurance coverage will actually be used to provide insurance benefits. None of the insurance companies have pledged to maintain this ratio heading forward should the ACA be overturned.

Although it is good to see insurers pledging to keep important patient-centered reforms in place, it is necessary to put this in context. The insurers are agreeing only to keep in place the ACA's most popular reforms and reform some of their most egregious practices. They are not pledging to make their products less expensive (or more affordable) to the average American, they are not agreeing to offer coverage to all Americans regardless of pre-existing medical conditions, they are not agreeing to follow the ACA's MLR guidelines. Finally, not all insurers have agreed to continue the new practices required by the ACA.

The ACA has forced insurers to make some meaningful changes in how they practice--changes the insurers had given no indication they would enact on their own. This shows the law's power and effectiveness: thanks to the ACA, millions of Americans will have more robust insurance coverage, regardless of the Supreme Court's decision. However, what the private insurers have omitted from their promises to extend the ACA's benefits shows why we still need this important piece of healthcare reform: it is a critical step to ensure affordable and accessible healthcare insurance for all.