Unintended Consequences of PPACA

ProtectSeniors.Org was disappointed in Congress and the Administration's failed efforts to protect retiree earned benefits in the Patient Protection & Affordable Care Act (PPACA) signed into law in March 2010.  We were equally disappointed to read the bill and find several key issues that negatively affect retirees.

ProtectSeniors.Org is aggressively working to correct these failures by Congress and the Administration.Currently, only about 25 percent of employers with 500 or more workers offer their retirees health insurance and of those, only about half provide retiree-only health insurance. If you are in a retiree-only health plan, it does not have to comply with a host of consumer protections the new Patient Protection & Affordable Care Act now requires of most other types of plans. For example, retiree-only plans do not have to:

  • cover your children until age 26.
  • offer free preventive health benefits.
  • spend at least 80 percent of your premium on medical services.
  • remove annual and lifetime limits on how much they will spend on medical care.
  • remove limits on emergency health care.
  • offer a process inside or outside the plan to appeal a claim denial.

These provisions were effective as of September 23, 2010, and must be available in all 2011 group health care plans, except those for retiree only plans.

The exemption of retiree-only plans from the health-care overhaul can be changed only by amending the 1996 Health Insurance Portability and Accountability Act, or HIPPA. That isn't something regulators at the Department of Labor and the Treasury have the authority to do. Congress passed the law, and only Congress can revise it.

Enacted 14 years ago, HIPPA was intended to preserve coverage for workers who change or lose their jobs. It included a handful of safeguards for employees, such as a rule that employers cannot refuse to cover their employees' pre-existing conditions. Retirees generally weren't affected by the situations to which the HIPPA rules applied, and retiree-only plans were exempt from the rules.

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