Reform’s impact on state plan unclear
May 7, 2010
Consultants told the Public Employee Benefits Program board Thursday that no one yet knows the impact the federal health care reform bill will have on the state program.
Tim Nimmer of Aon Consulting said there are a couple of changes that will come in about a year but that guidelines for implementing other changes mandated by the legislation haven’t been drafted yet.
Member Julia Teska questioned how they will adapt to those changes mandated in fiscal 2013 pointing out that those decisions must be made by the administration and Legislature in the 2011 session.
“We’re not like other plans,” she said. “We can’t make changes on the fly between 2012 and 2013.”
Nimmer agreed that will be a problem, saying federal Health and Human Services officials have said guidelines may not be available for as long as 18 months.
Chairman Randy Kirner said that, unfortunately, the health care legislation “is a shell.”
“There are a lot of regulations needed,” he said.
“The state will pay what the state will pay,” he said. “Anything over that will transfer to the participant.”
Nimmer there are several legal changes the state must deal with by July 2011.
First is the extension of parental benefits to children up to age 26. The state’s current cut-off is 19 for non-students and 24 for those attending college full time. He estimated dependent eligibility will cost the plan 1 to 1.5 percent.
Second is removing the lifetime maximum benefits cap, currently $2 million in the state plan. That, he estimated, will add up to a half percent in costs to the state plan.
The final one on the list is not allowing insurance coverage to be denied for pre-existing conditions, which takes effect immediately for those under 19 and for everyone in a year. The board was told that doesn’t really impact PEBP because the program doesn’t bar coverage for pre-existing conditions.
Nimmer and Justin Kindy of Aon both said the real challenges will come a several years down the road as other parts of the health care reform bill take effect. But they said they really can’t tell the board the impact those things will have until the federal government starts issuing guidelines and regulations.