Health Care Reform -- What Does it Mean?

WHAT DOES IT MEAN?

HEALTH CARE REFORM

Bryan D. Bolton Funk & Bolton, P.A.

Twelfth Floor 36 South Charles Street

Baltimore, Maryland 21201-3111 Phone: 410.659.7754 Fax: 410.659.7773

email: [email protected]

Robert R. Pohls Pohls & Associates

10940 Wilshire Boulevard, Ste. 1600 Los Angeles, California 90024

Phone: 310.694.3092 Fax: 310.694.3093


Gary Schuman Sr. Counsel - Litigation

Combined Insurance Company, an ACE, Ltd. company

1000 N. Milwaukee Avenue Glenview, Illinois 60025

Phone: 847.953.1506 Fax: 773.506.5080


International Claim Association– 101st Annual Education Conference – October 4, 2010 – Renaissance Austin Hotel – Austin, Texas

HEALTH CARE REFORM

Program Overview

History of Health Care Reform

Patient Protection and Affordable Care Act

Summary of Key Provisions

Implementation Timeline

Analysis of Impact

Questions


HEALTH CARE REFORM



1912 Teddy Roosevelt endorses social insurance, and the “Bull Moose” Party adopts the proposal as part of its platform.

1915 American Association for Labor Legislation publishes draft bill for compulsory health insurance; American Federation of Labor opposes it.

1927 Committee on the Costs of Medical Care forms to study the economic organization of medical care.

1929 Great Depression begins.

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1934 FDR creates Committee on Economic Security to address old-age and unemployment issues, as well as medical care and insurance.

1935 Congress passes the Social Security Act, without a provision calling for compulsory health insurance.

1938 Technical Committee on Medical Care publishes its report: “A National Health Program.”

1939 Sen. Wagner introduces a National Health Bill which includes a national health program to be funded by federal grants and administered by state and local governments.

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1943 Wagner-Murray-Dingell Bill proposes compulsory national health insurance to be funded by payroll taxes.

1944 FDR outlines an “economic bill of rights” including the right to adequate medical care and the chance to achieve and enjoy good health.

1944 Social Security Board calls for compulsory national health insurance as part of the Social Security system.

1946 Bill calling for universal comprehensive health insurance is re-introduced, opposed by American Hospital Association and American Bar Association, and rejected as too “socialistic.”

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1947 Truman calls for a National Health Program, drawing opposition from American Medical Association.

1948 Final report by National Health Assembly endorses voluntary health insurance, but reiterates need for universal coverage.

1948 American Medical Association launches a campaign against national health insurance proposals.

1952 Federal Security Agency proposes enacting health insurance for Social Security beneficiaries. (Bill introduced again in 1956 and 1959).

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1954 Eisenhower proposes federal reinsurance to enable private insurers to cover broader groups of people.

1954 Revenue Act of 1954 excludes employers’ contributions to employee plans from taxable income.

1956 Military “medicare” program is enacted to provide government health insurance for dependents of people in the Armed Forces.

1957 AFL-CIO supports government health insurance.

1958 Congress proposes covering hospital costs for aged persons on Social Security; American Medical Association responds by proposing an “eldercare” plan.

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1960 Federal Employees Health Benefit Plan (FEHBP) provides health insurance coverage to federal workers.

1960 Kerr-Mills Act (precursor to Medicaid) uses federal funds to support state programs providing medical care to the poor and elderly.

1961 House introduces bill to create government health insurance plan for the aged. Draws support from organized labor and intense opposition from the American Medical Association and commercial health insurers. (Reintroduced in 1963).

1965 Medicare and Medicaid programs signed into law.

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1972 Supplemental Security Income (SSI) program begins providing cash assistance to elderly and disabled; Social Security amended to allow people under age 65 with long term disabilities or end-stage renal disease to qualify for Medicare coverage.

1971 Executive Order imposes wage and price freezes on entire economy, including health care sector.

1973 Congress passes HMO Act of 1973.

1974 Nixon proposes the Comprehensive Health Insurance Plan (CHIP), calling for universal coverage, voluntary employer contribution and a program for the working poor and unemployed.

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1978 Health care provider organizations launch voluntary effort to control health care costs; Initial goal (2% over inflation) met in 1978; All subsequent goals exceeded.

1977 Annual increases in hospital expenses exceed overall inflation rate by 8.7 percent; Carter proposes limiting hospital expense increases to 3 percent over inflation.

1980 The Boren Amendment required that Medicaid pay nursing home rates that were “reasonable;” states oppose the measure as impossible to operationalize.

1979 Senate passes bill with voluntary restraints on hospital cost growth and triggers for mandatory controls; Bill defeated in House of Representatives.

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1981 States required to make additional Medicaid payments to hospitals that serve disproportionate share of Medicaid and low-income people.

1981 States allowed to mandate managed care enrollment of certain Medicaid groups and to cover home and community based long-term care.

1982 States allowed to expand Medicaid to children with disabilities who require institutional care but can be cared for at home (the “Katie Beckett Option”).

1986 Hospitals participating in Medicare are required to screen and stabilize all emergency room patients regardless of their ability to pay.

1983 Social Security Amendments of 1983 change Medicare’s payments to hospitals to fixed prices based on diagnosis-related groups.

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1987 Census Bureau reports that 31 million people are uninsured (13% of the population).

1988 Medicare coverage expanded to include prescription drugs and cap beneficiaries’ out-of-pocket expenses. Repealed in 1989, but requirements that states pay Medicare premiums and share in costs of covering poor beneficiaries in Medicaid are kept.

1989 Budget reconciliation mandates coverage for pregnant women and children under age 6 at 133% of poverty level.

1990 Budget reconciliation mandates Medicaid coverage of children age 6-18.

1988 States required to extend 12 months of transitional Medicaid coverage to families leaving welfare.

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1993 Clinton convenes White House Task Force on Health Reform; appoints First Lady as chair.

1993 Health Security Act introduced in Congress. Would give every American a “health security card,” but gets little support.

1993 National health reform proposals (including single-payer health insurance, managed competition without universal coverage and a bipartisan bill to expand coverage) are introduced but fail to pass.

1993 Medicaid waivers approved to allow for test programs. Many states use managed care models and use savings to expand coverage.

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1996 Health Insurance Portability and Accountability Act (HIPAA) restricts use of pre-existing conditions in health insurance underwriting.

1997 Balanced Budget Act of 1997 changes provider payments to slow Medicare spending, permits mandatory Medicaid enrollment in managed care.

1996 States allowed to cover parents and children at AFDC levels.

1996 Mental Health Parity Act prohibits group health plans from having lower dollar limits for mental health benefits.

1997 Census Bureau estimates 42.4 million uninsured (15.7% of population).

1997 State Children’s Health Insurance Program (SCHIP) provides coverage for uninsured children, funded by cigarette taxes.

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2003 Medicare Drug, Improvement and Modernization Act creates voluntary, subsidized prescription drug benefit under Medicare, administered through private plans.

2003 Maine passes Dirigo Health Reform Act, providing subsidized coverage to individuals and small employers.

2003 Health Savings Accounts created to let individuals set- aside pre-tax dollars for medical expenses.

2006 Massachusetts passes legislation to provide health care coverage to nearly all state residents.

2006 Vermont passes comprehensive health care reform aimed for near- universal coverage.

2005 Senate fails to pass the Small Business Health Fairness Act, a measure which would let small businesses pool together as “association health plans” and negotiate for group health insurance.

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2007 Census Bureau estimates 45.6 million uninsured (15.3% of the population).

2006 City of San Francisco provides universal health services for city residents under program that requires employers to spend a minimum amount for employees’ health care.

2007 California fails to pass a health reform plan with individual mandate and shared responsibility for costs.

2007 Congress considers the Healthy Americans Act, requiring individuals to obtain private health insurance through state health insurance purchasing pools.

2007 Congress passes two versions of a bill to reauthorize the State Children’s Health Insurance Program (SCHIP). Bush vetoes both.

2007 Insurers required to treat mental health and physical conditions on equal basis.

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2009 Obama releases budget outlining eight principles for health reform and creating $634 billion health reform reserve fund.

2008 Sen. Baucus releases White Paper outlining a national health reform plan based on Massachusetts model.

2009 Children’s Health Insurance Program (CHIP) reauthorized to provide funding to cover 4.1 million children who would have been uninsured by 2013.

2010 Obama presides over Bipartisan Health Care Summit at “Blair House.”

2009 Obama establishes Office of Health Reform to coordinate efforts at national health reform.

2010 Obama signs the Patient Protection and Affordable Care Act (March 23, 2010) and the Health Care and Education Reconciliation Act of 2010 (March 30, 2010).

Timeline of Insurance Reforms - 2010

High-risk pool established to provide coverage to people with pre-existing conditions.

Provide dependent coverage for adult children to age 26.

Require minimum coverage without cost-sharing for preventive services, including recommended immunizations, rated A or B by the U.S. Preventive Services Task Force.

HHS and states begin annual review of unreasonable increases in health insurance coverage premiums. A health insurer cannot implement any unreasonable premium increase without prior justification to HHS and the relevant state.

Timeline of Insurance Reforms – 2014

Require guarantee issue and renewal, and allow rating variation based only on age, premium rating area, family composition and tobacco use. Limits out-of-pocket deductibles based on IRC.

Limits waiting period for coverage to 90 days. Prohibits Annual or Lifetime limits on essential benefits. No pre-existing condition exclusion permitted. Create state-based Health Insurance Exchanges. Requires OPM to contract with insurers to offer at least

two multi-state plans in each exchange. Create Essential Benefits Package providing

comprehensive services and must cover at least 60% of actuarial value of covered benefits and limit cost-sharing.

Essential Benefits Plan

Minimum essential benefits consists of the following: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services, and pediatric, including oral and vision care.

HHS is required to establish the complete list of essential benefits.

Essential benefit plans can differ by levels of coverage.

Essential Benefit Plan Coverage Levels

Bronze (Basic) Level Coverage – equals 60% of full actuarial value of the benefits provided by plan.

Silver (Enhanced) Level Coverage – equals 70% of full actuarial value of the benefits provided by plan.

Gold (Premium) Level Coverage – equals 80% of full actuarial value of benefits provided by plan.

Platinum (Premium Plus) Level Coverage – equals 90% of full actuarial value of the benefits provided by plan. Not required to offer Platinum coverage.

All plans must offer mental health parity.

Qualified Health Plan

A “qualified health plan” means a health plan that (A) has a certification that such plan meets the requirements of each Exchange through which the plan is issued; (B) provides the essential health benefits plan package; (c) is offered by a a licensed health insurer that (i) is licensed and in good standing to offer health insurance in each State where coverage is offered; (ii) agrees to offer at least one qualified health plan in silver and gold levels in each such Exchange; (iii) agrees to same premium rates inside and outside of Exchange; and (iv) complies with regulations.

Health Insurance Exchange

By 2014, States must establish exchanges to facilitate purchase of qualified health plans and are charged with enforcing standards.

States must establish Small Business Health Options Program (SHOP) Exchange to assist small employers in the process of enrolling employees in qualified health plans offered in the small group market.

Regulations will establish criteria for certification of health plans as qualified health plans, but minimum criteria are defined in statute.

Only qualified health plans may be offered through an exchange, but a health insurer can offer plans outside of exchanges.

Health Insurance Exchange Functions

An exchange will (1) establish procedures for certification and decertification of qualified health plans; (2) offer a toll free number; (3) maintain internet site for standardized comparison of information on plans; (4) assign a rating to each QHBP; (5) utilize standard format for presenting plan options; (6) inform individuals about eligibility for Medicaid CHIP; (7) establish a calculator to determine actual cost of coverage after any premium credit or cost-subsidy; and (8) provide procedures for certification for exemption from individual excise tax.

Health Insurance Exchange Programs

Office of Personnel Management (OPM) shall contract with health insurers to offer at least two multi-state qualified health plans through the exchanges to provide individual and small group coverage.

Medical loss ratios, profit margins, premiums and other terms and conditions shall be implemented in a manner similar to FEHBA Program.

States may offer additional benefits, but cannot add to Federal cost.

Small Employers (100 or fewer employees) may elect to make all full-time employees eligible for plans through the Exchange.

In 2017, Large Employers can participate in the Exchange

Health Insurance Exchange Insurer Requirements

Insurer must offer at least one silver and one gold level plan in the Exchange and charge same plan premium offered inside and outside of the Exchange.

Agents and brokers are permitted to serve as “Navigators” and may enroll individuals in plans offered through the Exchange.

Health insurers cannot serve as navigators and navigators cannot receive consideration from insurer in connection with participation or enrollment of individuals or employees.

HHS will establish standards for navigators by regulation.

Employer and Individual Mandates

Employers offering minimum essential coverage through employer-sponsored plan must offer free-choice vouchers to employees to purchase coverage through the Exchange. Voucher amount is determined by the most generous amount the employer would have contributed for coverage under employer’s plan.

If employer contributes less than 60% of costs of employer plan or premiums exceed 9.8 percent of employee’s income, then employee is not considered to have minimum essential coverage and is eligible for premium assistance.

Employers with more than 200 employees must automatically enroll new full-time employees in coverage with the opportunity to opt out.

Individuals are required to maintain minimum essential coverage beginning in 2014.

Insurance Market Reforms

HHS will award grants to states to establish or expand health insurance consumer assistance or a health insurance ombudsman.

A state office of health insurance consumer assistant or health insurance ombudsman shall: 1) assist with filing and complaints and appeals; 2) collect, track and quantify problems encountered by consumers; 3) educate consumers on their rights and responsibilities; 4) assist consumers with enrollment; 5) resolve problems with premium tax credits.

Coverage cannot be rescinded except in the case of fraud or intentional misrepresentation of a material fact.

Insurance Market Reforms - Continued

A group health plan or health insurance issuer must give at least 60 days notice if it makes any material modification in the terms of the plan or coverage.

Increases wellness incentive limit currently codified in HIPAA, but increases incentive from 20-30%.

Wellness incentive may be increased by regulation up to 50%.

Cannot require pre-authorization for emergency care in hospital or for female participants for OB/GYN care.

Cannot impose conditions for participation in clinical trial.

Plan Disclosures

Within 24 months of enactment, health plans must use HHS standards for provision of summary of benefits and coverage explanation. HHS will work with NAIC to develop standards.

Standards shall ensure that outline of coverage is: presented in uniform format, not more than 4 pages in length and in 12-point or larger font; in a manner understandable to average enrollee; includes definitions of standard terms; includes coverage limitations or exceptions, cost-sharing provisions, renewability and continuation provisions, examples of common benefit scenarios, a statement the outline is a summary and a web link to the actual coverage policy or group certificate.

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Certain provisions become Effective for calendar year Plans: • Coverage for adult children • No lifetime caps • Restriction on annual caps • No pre-existing conditions for children under age 19

Reinsurance Program for

Retirees becomes operative

• 0.9% additional Medicare tax becomes effective • 3.8% Medicare ta on unearned income becomes effective • Medicare Part D subsidiaries effectively become taxable • $2,500 limitation on health FSAs becomes effective

Patient Protection and

Act signed into law

“Cadillac” plan tax becomes

effective

• Exchanges become operative • Individual mandate provisions apply • Employer responsibility obligations apply

6/21/2010

3/23/2010 2011

2013

2014 2018

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Permitted Grandfathering of Existing Coverage

The Act grandfathers plans in effect on March 23, 2010

A grandfathered plan may provide that individuals who are covered on March 23, 2010 can continue coverage under the plan generally without regard to the requirements of the Act

Family members may enroll in the grandfathered plan in the future if family coverage was permitted under the terms of the plan as in effect on March 23, 2010

New employees may join the grandfathered plan in the future if the plan permitted new employees to join on March 23, 2010


.

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Permitted Grandfathering of Existing Coverage Even though existing plans are grandfathered, certain interim

requirements still apply:

• No lifetime limits (2011)

• Restrictions on annual limits (2011) • Restrictions on coverage rescissions (2011)

• Extension of dependent coverage to adult children (2011)

• Advance notice of material modifications (2011)

• Uniform summary of benefits (2011-2012)

• No pre-existing condition exclusions for enrollees under the age of 19 (2011)

• No pre-existing condition exclusions for enrollees of any age (2014)

• Maximum waiting period is 90 days (2014)

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Interim Requirements That Do Not Apply to Grandfathered Plans

Coverage requirements for preventive care services

Coverage requirements for emergency services

Non-discrimination rules that apply to insured plans

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Interim Requirements Effective Dates

The interim requirements first become effective for plan years beginning on or after September 23, 2010 (6 months after the law was enacted)

For calendar years plans, the interim requirements will begin to apply on January 1, 2011

For October, November and December fiscal year plans, the interim requirements will begin to apply on the first day of the plan year in 2010

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Lifetime and Annual Limits

No lifetime limits

No annual limits

Prior to 2014, plans may establish a restricted annual limit (to be determined by HHS) on the dollar value of benefits with respect to the scope of benefits that are “minimum essential benefits” under the Act

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Lifetime and Annual Limits

To the extent that a plan offers specific benefits that are not considered “minimum essential benefits” under the Act, the plan may impose annual or lifetime limits on such specific benefits that are otherwise permissible under federal law

Note: The Act does not define the specific benefits covered by this exception

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No Rescission of Coverage

A plan cannot rescind coverage unless the participant or beneficiary has engaged in fraud of intentional misrepresentation of material fact as prohibited by the terms of the plan

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Coverage for Adult Children

Adult children must continue to be eligible to be covered until they turn age 26

Adult children may be covered as dependents tax-free until the year they turn age 27

IRS has clarified that the tax-free status of this coverage runs from March 30, 2010, and that in 2010 cafeteria plans can permit adult children to be covered pre-tax mid-year (and make or change health care FSA contributions) as if their becoming eligible was a change in family status (IRS Notice 2010-38, 4/27/10)

Child is defined as a son, daughter, stepson, stepdaughter, eligible foster child, adopted child legally placed with the participant for adoption

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Coverage for Adult Children

Children of children are not required to be covered

For grandfathered plans prior to 2014, an adult child is only required to be offered coverage if such adult child is not eligible to enroll in another eligible employer-sponsored health plan

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Material Modifications

Notice of material modifications to plan benefits must be provided at least 60 fays before the modifications become effective

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Pre-Existing Conditions

A plan may not impose pre-existing condition limitations on enrollees who are under the age of 19

Note: This requirement expands to apply to all enrollees beginning in 2014

Coverage for Emergency Services

Participants may use emergency room services without the need for prior authorization. In addition, a plan may not impose any additional co-payment or co-insurance requirements if the emergency facility is not part of the plan’s network

Note: Grandfathered plans are not required to include this provision

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2014 Requirements

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Individual Responsibility

Individuals will be required to maintain health insurance (known as “minimum essential coverage”)

Individuals who do not maintain such coverage will be required to pay a penalty equal to the grater of $695 or 2.5% of the individual’s income

Families that do not maintain such coverage will be required to pay a penalty equal to the greater of $695 for each non-covered family member (capped at $2,085) or 2.5% of the family’s income

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No Pre-existing Conditions

Plans may not impose any pre-existing condition

As noted above, beginning in 2011, plans may not impose any pre-existing condition limitations on children under the age of 19

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Waiting Periods

Plans may not impose waiting periods that exceed 90 days

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No Health Status Discrimination

Plans may not impose coverage rules based on any health status related factor

Note: For employers, it is not clear how (or if) this requirement differs from the existing HIPAA non-discrimination rules that are applicable to employer-sponsored plans

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Wellness Programs

Wellness programs that do not depend on health status factors:

• Program must be made available to all similarly situated

individuals

• Can reimburse all or a part of the cost for membership in a

fitness center

• Diagnostic testing program that provides rewards for

participation, not outcomes

• Encourages preventive care related to a health condition

• Reimbursements for costs of smoking cessation programs

regardless of outcomes

• Rewards for attending periodic health education seminars

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Wellness Programs

Wellness programs currently in existence under existing regulations may continue to follow those regulations as long as those regulations remain in effect

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Insurance Company Required Pay-Outs

Insurers required to spend at least $.80 out of every dollar they collect in premiums on patient welfare

A critical Issue for the insurance industry's bottom line

What does this mean precisely ?

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Insurance Company Position

Include the cost of verifying the credentials of doctors in its networks

Ferreting out fraud by identifying doctors performing unnecessary operations

Typical business expenses such as insurance commissions to agents/brokers and taxes paid on investments

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Penalties for failing to meet 80% Rule

Medical-loss ratio is important because law requires a refund to consumers if too much is spent on administrative costs

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Consumer Advocacy Group Position

Insurance industry wants to "water down" the law by including too many administrative costs under the guise of patient care

If six largest for-profit insurers had been required to meet these new standards last year, they would have been required to refund $1.9 billion

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Interim Final Rules For Group Health Plans And Health Insurance Issues Relating To Coverage Of Preventive Services Under The Patient Protection And Affordable Care Act Promulgated By

Department of Treasury, 26 CFR Part 54;

Department of Labor, 29 CFR Part 2590; and

Department of Health and Human Services, 29 CFR Part 147.

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Interim Final Regulations Effective On

September 17, 2010

A) Interim Final Regulations apply to group health plans and group health insurance issuers for plan years beginning on or after September 23, 2020; and

B) These interim regulations generally apply to individual health insurance issuers for policy years beginning on or after September 23, 2010.

Comments on regulations due on or before September 17, 2010

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Stated Need For Regulatory Action

Identifies three reasons for current under-utilization

of preventive services.

1) Turnover in health insurance market offers no incentive for insurers to cover preventive services;

2) Preventive services often offer no immediate benefit, making it easy to postpone in the face of immediate cost; and

3) Some benefits of preventive services accrue to society as a whole and are not factored into individual decisions.

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1) Evidence-based items or services that have in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force (Task Force); 2) Immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention (Advisory Committee); 3) With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and 4) With respect to women, evidence-informed preventive care and screening provided for in comprehensive guidelines supported by HRSA (not otherwise addressed by the recommendations of the Task Force). Complete list of recommendations and guidelines that are required to be covered under the interim final regulations can be found at http://www.HealthCare.gov/center/regulations/prevention.html.

Interim Final Regulations Require A Group Health Plan and Health Insurance Issuer

Offering Group Or Individual Health Insurance Coverage To Provide Benefits For And

Prohibits Imposition Of Cost Sharing With Respect To:

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1) Individuals will experience improved health as a result of reduced transmission, prevention or delayed onset, and earlier treatment of disease;

2) Healthier workers and children will be more productive with fewer missed days of work or school;

3) Some of the recommended preventive services will result in savings due to lower health care costs; and

4) The costs of preventive services will be distributed more equitably.

Benefits Anticipated From Interim Final Regulations

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Preventive service

Population group

Percent utilizing

preventive

service in

2005

Lives saved annually if percent utilizing

preventive service increased to

90 percent

Regular aspirin use ……………………………… ………..

Smoking cessation advice and help to quit ……….

Colorectal cancer screening ……………………………..

Influenza vaccination ………………………………………

Cervical cancer screening in the past 3 years ……..

Cholesterol screening ……………………………………..

Breast cancer screening in the past 2 years ………..

Chlamydia screening ……………………………………….

Men 40+ and women 50+ ……………………

All adult smokers ……………………………....

Adults 50+ ………………………………………… Adults 50+ …………………………………………

Women 18-64 ……………………………….......

Men 35+ and women 45+ …………………….

Women 40+ ……………………………………….

Women 16-25 ………………………….. ………..

40

28

48

37

83

79

67

40

45,000

42,000

14,000

12,000

620

2,450

3,700

30,000

Projection of Lives Saved From

Increasing Utilization of Selected

Preventive Services To

90 Percent

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The Departments used BC/BS FEHBA standard plan for comparative purposes; BC/BS covers most of preventive services listed in the Task Force and Advisory Committee recommendations; The Departments estimated that adding coverage for genetic screening and depression screening would increase benefits an estimated .10 percent; Adding lead testing, autism testing and oral health screening would increase insurance benefits by an estimated .02 percent; and This results in a total average increase in insurance benefits for these services of .12 percent, or just over $4 per insured person.

Estimate Of Average Change In Health Insurance

Premiums Resulting From Interim Regulations

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Interim final regulations make clear that a plan or issuer is not required to provide coverage or waive cost-sharing requirements for any item or service that has ceased to be a recommended preventive service. Other requirements of Federal or State law may apply in connection with ceasing to provide coverage or changing cost-sharing requirements for any such item or service. For example, PHS Act section 2715(d)(4) requires a plan or issuer to give 60 days advance notice to an enrollee before any material modification will become effective.

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Pending Legal Challenges

Virginia: Passes Virginia Health Care Freedom Act, prohibiting any individual from being required to purchase health insurance.

Attorney General filed a lawsuit [Commonwealth v. Sebelius] challenging constitutionality of “individual mandate”

District Court denies motion to dismiss, ruling that constitutional issues must be resolved by hearing on the merits (currently set for October 18, 2010).

Other States: Twenty states, two individuals and the National Federation of Independent Business filed a separate lawsuit in the Eastern District of Michigan which makes similar challenges.

No Severability Provision: A successful judicial challenge to the constitutionality of any provision could invalidate the entire Act.

Health Care Reform -- What Does it Mean?

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