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As healthcare law rolls out, its effects will depend on your state

People living in states that back the Affordable Care Act will get substantial help unavailable to those in states that are fighting it. The law kicks in next month.

September 06, 2013|By Noam N. Levey
  • Sen. Ted Cruz (R-Texas) speaks in Dallas on efforts to defund the healthcare reform law.
Sen. Ted Cruz (R-Texas) speaks in Dallas on efforts to defund the healthcare… (Mike Fuentes / Bloomberg )

WASHINGTON — Colorado residents shopping for health insurance next year will be able to compare health plans using a star system that ranks insurance companies on quality.

In Oregon and Maryland, consumers will save as much as 30% on some plans after state regulators forced insurers to lower 2014 premiums. Californians will get extra help selecting a health plan next year from a small army of community workers paid in part by foundations and the state.

As President Obama's healthcare law rolls out next month, even supporters acknowledge there will be problems. But Americans who live in states backing the Affordable Care Act will receive substantial protections and assistance unavailable to residents in states still fighting the 2010 law. That could mean confusion and higher insurance premiums for millions of consumers in states resisting the law.

Leaders in these resistant states have not set up consumer hot lines. Several state insurance regulators are refusing to make sure health plans offer new protections required by the law, such as guaranteed coverage for people who are ill. In response to the law, Florida suspended its authority to review how much insurance companies charge consumers.

"I would certainly rather be in a state that is trying than in one that is not," said Alan Weil, executive director of the National Academy for State Heath Policy. "There are going to be some big differences."

The Affordable Care Act was supposed to smooth out disparities in insurance coverage and healthcare quality between states, providing all Americans with a basic level of protection.

The law will still make some benefits available everywhere. Starting next year, all insurance plans will be prohibited from rejecting consumers who are sick. Plans cannot put annual or lifetime limits on what they cover. For the first time, all plans will have to provide a standardized set of health benefits.

And millions of low- and moderate-income Americans will qualify for government subsidies to help them buy health insurance if they cannot get coverage through their employers.

The new law will not make health coverage available to all Americans, however.

About half of the states, most with Republican leadership, have rejected federal aid to expand their government Medicaid programs next year, saying it costs too much and imposes too many regulations. That means as many as 5 million of the poorest residents in these states will still not be able to get coverage next year. (Several states are still debating whether to expand Medicaid.)

At the same time, 34 states have elected not to set up new insurance marketplaces, websites where consumers who don't get health benefits at work and don't qualify for Medicaid can shop for standardized health insurance plans.

In those states, the Obama administration will run the marketplaces. Consumers there will still be able to shop online for insurance plans. And Obama administration officials have pledged to help shoppers. But with the federal government stretched thin, the administration had hoped states would provide consumers with an added layer of protection.

Consumers in some states with federally run marketplaces will still get help from local officials who are cooperating with the Obama administration.

In Mississippi, for example, Insurance Commissioner Mike Chaney, a Republican, is helping the federal government to make sure rural residents have access to a health plan. And in Kansas, another state with a federally run marketplace, Republican Insurance Commissioner Sandy Praeger is working with the Obama administration to make sure health plans there meet the new federal standards.

"We're just trying to do what's best for our consumers," said Praeger, a former head of the National Assn. of Insurance Commissioners. "If state regulators are not going to do anything, then consumers will be the ones who suffer."

Consumers won't get the extra help in Alabama, Oklahoma, Texas or Wyoming, where insurance commissioners will not review health plans being offered on the new marketplaces to ensure they provide consumers with the required benefits and protections.

"The federal government will decide which health insurance plans will be certified and offered in Alabama," said Mark Fowler, a spokesman for that state's insurance department. "Likewise, the federal government will address consumer complaints."

In Missouri, state workers are explicitly forbidden from providing any assistance to the new health insurance marketplace under a 2012 initiative passed by voters.

And in Florida, the Legislature and governor stripped the insurance commissioner's authority to block rate hikes for two years. Since the new health law does not give the federal government this power, that effectively allows insurance companies to raise some premiums as much as they choose in 2014 and 2015, the first two years that Obama's healthcare law will be fully in effect.

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