Health insurer's compliance likely carries a cost
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With the news that the nation's largest health insurer, UnitedHealthcare, plans to keep in place some of the most popular consumer provisions of the 2010 health insurance overhaul -- regardless of the Supreme Court's opinion on the matter -- other insurers may feel pressured to do the same, according to industry analysts.
But the voluntary compliance won't come free of charge and leaves out other key provisions of President Barack Obama's controversial health care law, experts said.
On Monday, Minnesota-based UnitedHealth Group announced that it would cover preventive care without charging a co-payment; would continue to offer dependent coverage to adult children up to age 26 through their parents' health plans; and won't impose lifetime dollar limits on how much an insurance policy pays out to cover claims.
All of those provisions were part of the federal health care overhaul known as the Affordable Care Act. The law and its constitutionality have been argued before the Supreme Court, which is expected to issue a ruling on its legality this month.
"The protections we are voluntarily extending are good for people's health, promote broader access to quality care and contribute to helping control rising health care costs. ... It is important to ensure they know these provisions will continue," Stephen J. Hemsley, president and CEO of UnitedHealth Group, said in a statement.
The fact that the announcement came from UnitedHealth, with 14 percent U.S. market share and more than 80 million policyholders, means that its benefits will be far-reaching.
"This is a positive development. A significant number of people will gain the benefits of these protections," said Ron Pollack, executive director of Families USA, a health care consumer group that favored the 2010 law.
"But let's not exaggerate the protections," he said.
The Monday announcement made no mention of offering coverage to people with preexisting conditions, the practice of medical underwriting (charging higher insurance rates based on gender, age and other medical risk factors) or limiting the amount of premium revenue that is spent on overhead.
"So while what United has promised is helpful, it's at best one-third of a loaf," he said.
Mr. Pollack and Paul Fronstin, director of the Employee Benefit Research Institute's Health Research and Education Program, both said that United's embrace of certain elements of the health law could lead to other large health insurers making the same commitment, and offering the same protections.
Yet "offering" does not mean the same thing as "providing for free."
"All they are doing it is offering it," Mr. Fronstin said. "Somebody else is going to have to pay for it."
The provisions being voluntarily preserved by United are, in some ways, a public relations gambit, because there's a good chance that those provisions will be kept in place by the Supreme Court. Even if the court strikes down the part of the law known as the "individual mandate," which requires uninsured Americans who can afford to do so to pay for coverage or pay a fine, other elements of the law could remain intact.
Still, United's embrace is a signal of the popularity of certain portions of the Affordable Care Act, a point that the Obama administration has been trying to illustrate for months.
For example, the number of uninsured between the ages of 19 and 25 decreased by nearly 1 million from 2010 to 2011 due, in part, to the federal law (and similar state laws) allowing young adults to stay on parents' insurance coverage longer.
And on Monday, the Centers for Medicare & Medicaid Services issued a bulletin saying the Affordable Care Act had helped more than 570,000 Medicare beneficiaries in Pennsylvania "receive at least one preventive service at no cost to them during the first five months of 2012," including more than 32,000 who have had a free "annual wellness visit."
Highmark Inc., Pennsylvania's largest health insurer and one of the 10 largest in the U.S., will "evaluate the Supreme Court's decision when it is published and [will] continue to ensure that the products and services we provide meet the needs of the communities that we serve," said spokesman Aaron Billger.
"While we are preparing for a number of scenarios that could come from the court, our greatest concern is the impact on consumers and businesses if the link between the responsibility of individuals to have insurance and the insurance market reforms is broken.
"If that's the case, the remaining reforms could backfire on consumers unless significant changes are made," he said.
Bob Laszewski, a consultant and former insurance executive, called UnitedHealth's move a "very smart business decision."
The provisions that United has said it will stick with are relatively inexpensive, they're already factored into the coverage price and the announcement makes the insurer look good -- plus if insurers cut these benefits, customers probably will expect a corresponding premium drop, he noted.
First Published June 12, 2012 12:00 am