Insurers Moves Show No Turning Back on U.S. Health Law

Three of the top five U.S. health insurers sent a signal that many of the changes wrought by the 2010 health-care overhaul are here to stay, even if the Supreme Court decides the law itself must go.

UnitedHealth Group Inc., Aetna Inc. and Humana Inc. said this week they would save some of the law’s most popular provisions, including letting young adults stay on parents’ plans. Employers seeking to contain the cost of care will also press to keep other provisions, said Mike Tuffin, who represented insurers as executive vice president at America’s Health Insurance Plans while the law was being negotiated.

“One way or another, some of these pieces will either be re-instituted or remain in effect through the actions of the private marketplace,” Tuffin said in a telephone interview.

Insurers and regulators have begun implementing the law that will produce the biggest changes in health care since the advent of Medicare and Medicaid in the 1960s. Some provisions may be nullified when the Supreme Court rules this month on whether the law’s requirement that most Americans carry insurance is constitutional. UnitedHealth, Humana and Aetna were applauded by the head of the Robert Wood Johnson Foundation for refusing to “be held hostage by the political and judicial process.”

“I would hope that the others would follow suit,” Risa Lavizzo-Mourey, president and chief executive officer of the Princeton, New Jersey-based research and advocacy group, said in a telephone interview. The provisions the insurers plan to retain will expand coverage and “pay off in the long run.”

Lifetime Benefits

At stake is a law that would expand insurance to at least 30 million people and transform an industry that accounts for 18 percent of the U.S. economy. A ruling striking down all or part of the law may come on a 5-4 vote, with the Republican-appointed Supreme Court justices in the majority and the Democratic appointees in dissent. Republicans, including presidential candidate Mitt Romney, have called for a repeal.

UnitedHealth, Aetna and Humana said in separate statements that they would keep simplified, independent reviews of appeals of coverage denials regardless of the court’s decision. Minnetonka, Minnesota-based UnitedHealth and Louisville, Kentucky-based Humana said they would also end rescissions, or retroactive terminations of policies, except in cases of fraud, and eliminate dollar limits on lifetime benefits in their plans. The three companies have a total of at least 48 million customers on their commercial health plans.

The companies “want to send a strong message to their customers that their coverage, the benefits their customers have today, will remain in effect regardless of how the court rules,” said Tuffin, who is now managing director of the Washington office for APCO Worldwide, a consulting firm.

Young Adults

The part of the law that lets people stay on their parents’ insurance until age 26, one of the first provisions enacted, led 6.6 million young adults to join those plans in 2011, according to the Commonwealth Fund, a New York-based nonprofit that conducted the survey and supports expanded coverage.

The insurers won’t be obligated to stick by their pledges if the law is rejected, and large employers who insure themselves and only hire companies such as UnitedHealth to administer benefits for their workers could refuse to pay for the extra benefits.

“We can’t make anyone buy anything,” said Matt Stearns, a spokesman for UnitedHealth, in an e-mail. He said the company isn’t able to say how much the provisions may add to premiums.

Clearest Evidence

The statements by the insurers are the clearest evidence that measures of the law that have already been implemented may outlive the statute itself, said David Cutler, an economics professor at Harvard University who helped policy makers draw up the Massachusetts health-care law that formed the basis for President Barack Obama’s national policy.

“You can take away the law, but you can’t take away what’s gone on since,” Cutler, who advised Obama’s presidential campaign in 2008, said in an interview in Washington. “The idea that you’re going to wipe away Obamacare is both not practical and not even what anyone wants to do.”

Humana, which has 5.9 million customers in its commercial health plans, said in a statement yesterday that its customers “should have the peace of mind of knowing the company embraces and will maintain these common-sense provisions that add stability and security to health coverage.”

Future Decisions

The Blue Cross Blue Shield Association, whose 38 local member companies insure about 100 million people, will encourage the plans “to offer their customers the broadest set of protections possible at an affordable price,” said Kelly Miller, a spokeswoman.

WellPoint Inc., the second-largest insurer by market value and owner of Blue Cross Blue Shield plans in 14 states, will announce specific coverage plans after the court ruling, said Kristin Binns, a spokeswoman for the Indianapolis-based company.

Cigna Corp., the fourth-largest U.S. insurer, said in an e-mailed statement it would wait until after the court rules to announce its plans. The Bloomfield, Connecticut-based company said it’s “prepared to proceed as appropriate on behalf of our customers when the court deliberations reach their conclusion.”

The ruling will mark the first time the high court has ruled on a president’s signature legislative achievement in the middle of his re-election bid.

Obama’s almost $1 trillion, 10-year plan to overhaul the health system passed Congress without a single Republican vote. Parts of the law expanding insurance coverage were challenged as unconstitutional by 26 states, and the Republican-led House of Representatives has voted at least 29 times to repeal all or part of the law or reduce its funding.

Republican Lawmaker

The head of a caucus of 21 Republican lawmakers with medical backgrounds said last week that no matter the outcome of the court case, he will try to preserve coverage for young adults and for people with pre-existing medical conditions. Representative Phil Gingrey, an obstetrician-gynecologist from Georgia who is co-chairman of the group, said the young-adult provision is “a good policy.”

Insurers aren’t promising to continue a provision of the law that requires them to cover children with pre-existing illnesses and said nothing about covering sick adults, required beginning in 2014. Those policies, called “guaranteed issue,” can’t be preserved unless the Supreme Court retains the requirement that Americans carry insurance, or Congress replaces it with some other measure compelling coverage, said Karen Ignagni, president and CEO of America’s Health Insurance Plans, the industry’s primary lobbying group in Washington.

Medicare Experiment

In addition to the insurance mandate, the law authorized Medicare to experiment with new ways to pay hospitals and doctors that would encourage higher quality, more efficient care. One program, called accountable-care organizations or ACOs, awards hospitals and physician groups a share of any savings they can produce by streamlining care and reducing unnecessary or wasteful services.

Striking down the law and eliminating Medicare’s experiments in payment changes may harm insurers’ efforts to slow cost growth if hospitals and doctors decide to resist them, said John Rother, president and CEO of the National Coalition on Health Care, a nonprofit in Washington that advocates for expanded coverage and reduced cost growth. Medicare is the government’s health program for the elderly and disabled.

Presbyterian Healthcare Services, an eight-hospital chain in New Mexico, was one of the first participants in Medicare’s experiment in accountable care. In the event the court wipes out the measure, Congress and the next president are likely to find themselves re-creating many of the same programs because of budget pressure, said Jim Hinton, Presbyterian’s president.

“The basic need to rein in the cost of Medicare as a bellwether payer for the whole health-care system doesn’t change,” he said in a telephone interview.

Insurers, under pressure from employers to reduce health costs, have echoed many of Medicare’s adaptations, such as the accountable care groups, Ignagni said.

“That’s not going away,” she said. “We’re not turning back.”

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