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Health overhaul will dictate changes for employer plans

WASHINGTON — Over and over in the health care debate, President Barack Obama said people who like their current coverage would be able to keep it.

But an early draft of an administration regulation estimates that in just three years, 51 percent of workers will be in plans subject to new federal requirements, according to midrange projections in the draft.

It is more evidence that the law will raise costs, said the U.S. Chamber of Commerce. But the Business Roundtable, representing CEOs of major firms, saw encouraging signs of flexibility.

The types of changes that employers could have to make include offering preventive care without copayments and instituting an appeals process for disputed claims that follows new federal guidelines. The law already requires all health plans to extend coverage to young adult children until they turn 26. Such changes can nudge costs up.

The Obama administration said the draft is undergoing revision. Nonetheless, the leaked document got widespread interest Friday from lobbying firms that represent employers and insurance companies and on Capitol Hill.

Speaking of proposed changes, James Gelfand, health policy director for the U.S. Chamber of Commerce, said, "From an employer's point of view, that's a bad thing. These changes, whether or not they're good for consumers, are most certainly accompanied by a cost."

Senate Republican leader Mitch McConnell of Kentucky said it showed that Obama's assurance that Americans would be able to keep the plans they currently have was "a myth" all along.

Employer-provided coverage is the mainstay of the nation's health insurance system. The main issue in the 83-page regulation is how to deal with what the government calls "grandfathered" health plans.

Those are plans that predated the health care law and are exempt from many of its consumer protections.

Lawmakers asked regulators to spell out how much an employer can change a plan and still claim it to be grandfathered, exempting it from closer federal regulation.

Generally, plans can lose their protected status by increasing copayments and deductibles above certain limits, which Gelfand, the Chamber of Commerce expert, said were too narrow.

But Maria Ghazal, health policy director for the Business Roundtable, said she saw signs that the administration is trying to be responsive to employers. For example, plans that only cover retirees would be exempt from the new regulatory requirements.

Health overhaul will dictate changes for employer plans 06/11/10 [Last modified: Friday, June 11, 2010 11:13pm]
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