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Health insurers adapt to new regulatory scheme [St. Louis Post-Dispatch]

By Jim Doyle, St. Louis Post-Dispatch
McClatchy-Tribune Information Services

March 02--A number of key provisions of the Affordable Care Act have gone into effect since the law was enacted in March 2010.

And the sky hasn't fallen, yet. The insurance industry appears to have adapted to the health overhaul's mandated changes without too much trouble.

Under the law, carriers were required to allow children to stay on their parents' health plans until age 26. Youngsters with pre-existing conditions, including costly cancers and chronic illnesses, have been granted insurance. Seniors have been provided free preventive care through Medicare. And insurers have been subject to new "medical loss ratio" rules to limit their administrative costs.

Insurance carriers "have complained a lot, and been pretty vocal about it," said Sherry Glied, a professor at Columbia University in New York and a former assistant secretary for planning and evaluation at the U.S. Department of Health and Human Services.

But, she added, increases in the price of health premiums since the law's enactment appear to be the result of rising medical claims costs rather than changes in the law.

Meanwhile, health insurers have maintained strong operating margins in the past three years. Wall Street analysts forecast continued growth for major health insurers in the next few years, but fairly flat profits. According to federal health officials:

-- More than $1 billion was returned to consumers last year via company rebates when insurers fell short of federal "medical-loss ratio" requirements to cap their administrative expenses.

-- About 6.1 million Americans with Medicare who reached the Part D coverage gap known as the "donut hole," have saved more than $5.7 billion on prescription drugs since the law's enactment.

-- An estimated 34.1 million Americans last year benefited from Medicare's coverage of preventative services with no payments out of pocket.

-- About 3 million dependents under age 26 have been added to their parents' health plans since the law's enactment in 2010.

Stephen Helmsley, CEO of UnitedHealth Group Inc., the nation's largest insurer, has told Wall Street analysts that these changes have been accomplished with "limited disruption," and the transition has been "manageable."


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