Louisiana Department of Insurance Office of Consumer Advocay
Volume 1, Issue 5
AUGUST 2010

Councilwoman Tara Wicker Community Grandparents Day/ Back to School
Health Fair
8/3/2010
10:00 a.m. - 12:00 p.m.
Leo S. Butler Community Center
950 East Washington Street
Baton Rouge, LA

BP/Cameron Parish Open House
8/3/2010
6:00 p.m. - 8:00 p.m.
Community Center
Creole, LA

Southeast LA American Red Cross Community Outreach Meeting
8/12/2010
9:30 a.m. - 12:30 p.m.
American Red Cross
Southeast Louisiana Chapter
2640 Canal Street
New Orleans,LA

Summer Fest 2010
8/14/2010
11:00 a.m. - 5:00 p.m.
Bethany United Methodist Church
4533 Mendez Street
New Orleans, LA

Louisiana Small Business Development Center
"Insuring Your Small Business"
8/26/2010
10:00 a.m. - 12:00 p.m.
South Regional Library
6101 Johnston Street
Lafayette, LA

Mt. Pilgrim Baptist Church Wellness Workshop
8/28/2010
9:00 a.m. - 1:00 p.m.
Mt. Pilgrim Baptist Church
9700 Scenic Highway
Baton Rouge, LA

To find out if Consumer Advocacy will be in your area or to request a speaker for your organization or group, call (225) 219-0619 or send an email to
consumeradvocacy@ldi.state.la.us

If you no longer wish to receive this newsletter please send an email to the following address with "REMOVE" in the subject line.
consumeradvocacy@ldi.state.la.us

Understanding the Patient Protection and
Affordable Care Act

In March 2010, Congress passed and President Barack Obama signed into law the Patient Protection and Affordable Care Act (PPACA). The law provides for comprehensive health insurance reforms that are intended to hold insurance companies more accountable, lower health care costs, guarantee more health care choices and enhance the quality of health care for all Americans.

Starting this year and continuing through 2014, the PPACA will be implemented with the intention of increasing access to affordable health care for individuals, families, seniors and businesses. Many important benefits begin this year, including cost savings for seniors, families, businesses both small and large, and coverage options for many Americans who have been locked out of the insurance market because of a pre-existing condition.

The following is a time line including effective dates for implementation of some of the provisions of the Act:

  • Providing Small Business Health Insurance Tax Credits – Effective January 1, 2010. Up to 4 million small businesses are eligible for tax credits to help them provide insurance benefits to their employees. The first phase of this provision provides a credit worth up to 35% of the employer’s contribution to the employees’ health insurance. Small non-profit organizations may receive up to a 25% credit.
  • Allowing States to Cover More People on Medicaid – Effective April 1, 2010. States will be able to receive federal matching funds for covering some additional low-income individuals and families under Medicaid for whom federal funds were not previously available. This will make it easier for states that choose to do so to cover more of their residents.
  • $250 Medicare Drug Cost Rebate – The first checks were mailed out in June 2010, and will continue monthly throughout 2010 as seniors hit the coverage gap.
  • Crack Down on Health Care Fraud – Many provisions are effective now. Current efforts to fight fraud returned more than $2.5 billion to the Medicare Trust Fund in FY 2009 alone. The new law invests new resources and requires new screening procedures for health care providers to boost these efforts and reduce fraud and waste in Medicare, Medicaid, and the Children's Health Insurance Program (CHIP).
  • Early Retiree Reinsurance Program – Applications were made available June 1, 2010. The program preserves employer coverage for early retirees until more affordable coverage is available in 2014. The new law creates a $5 billion program to provide needed financial help for employment-based plans to continue to provide valuable coverage to people who retire between the ages of 55 and 65, as well as their spouses and dependents.
  • Pre-Existing Condition Insurance Plan – Effective July 1, 2010. A Pre-Existing Condition Insurance Plan will provide new coverage options to individuals who have been uninsured for at least six months because of a pre-existing condition. States have the option of administering this new program in their state. If a state chooses not to do so, a plan will be established by the Department of Health and Human Services (HHS) in that state. This program serves as a bridge to 2014, when all discrimination against pre-existing conditions will be prohibited.
  • Consumer Website – Effective July 1, 2010. The law provides for an easy-to-use website where consumers can compare health insurance coverage options and choose the coverage that is best for them (www.healthcare.gov).
  • Extending Coverage for Young Adults – Effective for health plan years beginning on or after September 23, 2010. New law allows unmarried dependents to stay on a parent’s plan until they turn 26 years old except in the case of an existing group plan if the young adult is offered insurance on his/her job.
  • Providing Free Preventative Care – Effective for health plan years beginning on or after September 23, 2010. All new plans must cover certain preventive services such as mammograms and colonoscopies without charging a deductible, co-pay or coinsurance.
  • Prohibiting Insurance Companies from Rescinding Coverage – Effective for health plan years beginning on or after September 23, 2010. In the past, insurance companies could search for an error, or other technical mistake, on a customer’s application and use this error to deny payment for services when he or she got sick. The new law makes this illegal. After media reports cited incidents of breast cancer patients losing coverage, insurance companies agreed to end this practice immediately.
  • Appealing Insurance Company Decisions – Effective for new plans beginning on or after September 23, 2010. The law provides consumers with a way to appeal coverage determinations or claims to their insurance company as well as establishes an external review process.
  • Eliminating Lifetime Limits on Insurance Coverage – Effective for health plan years beginning on or after September 23, 2010. Under the new law, insurance companies will be prohibited from imposing lifetime dollar limits on essential benefits, such as hospital stays.
  • Annual Limits on Insurance Coverage – Effective for health plan years beginning on or after September 23, 2010. The new law restricts the use of annual dollar limits on essential benefits for new plans in the individual market and all group plans. Effective January 1, 2014, the use of annual dollar limits on essential benefits will be banned for new plans in the individual market and all group plans.
  • Denying Coverage of Children Based on Pre-Existing Conditions – Effective for health plan years beginning on or after September 23, 2010, for new plans and existing group plans. The new law includes new rules to prohibit insurance companies from denying coverage to children under the age of 19 because of a pre-existing condition.
  • Preventing Disease and Illness – Funding begins in 2010. A new Prevention and Public Health Fund will invest in proven prevention and public health programs that can help keep Americans healthy, from smoking cessation to combating obesity.
  • Strengthening Community Health Centers – Effective 2010. The law includes new funding to support the construction of and expansion of services at community health centers, allowing these centers to serve some 20 million new patients across the country.
  • Payments for Rural Health Care Providers – Effective 2010. The law provides increased payment to rural health care providers to help them continue to serve their communities.
  • Prescription Drug Discounts – Effective January 1, 2011. Seniors who reach the coverage gap will receive a 50% discount when buying Medicare Part D covered brand-name prescription drugs. Over the next ten years, seniors will receive additional savings on brand-name and generic drugs until the coverage gap is closed in 2020.
  • Free Preventative Care for Seniors – Effective January 1, 2011. The law provides certain free preventative services, such as annual wellness visits and personalized prevention plans for seniors on Medicare.
  • Reducing Health Care Premiums – The rebate program will begin January 1, 2011. The new law requires that at least 85% of all premium dollars collected by insurance companies for large employer plans and at least 80% of all premium dollars for plans sold to individuals and small employers, must be spent on health care services and health care quality improvement. If insurance companies do not meet these goals because their administrative costs or profits are too high, they must provide rebates to consumers.
  • Improvements to Medicare – Effective January 1, 2011. Today, Medicare pays Medicare Advantage insurance companies over $1,000 more per person on average than is spent per person in Medicare Parts A and B. This results in increased premiums for all Medicare beneficiaries, including the 77% of beneficiaries who are not currently enrolled in a Medicare Advantage plan. The new law levels the playing field by gradually eliminating this discrepancy.  People enrolled in a Medicare Advantage plan will still receive all guaranteed Medicare benefits, and the law provides bonus payments to Medicare Advantage plans that provide high quality care.
  • Improving Health Care Quality and Efficiency – Effective no later than January 1, 2011. By January 1, 2011, HHS will submit a national strategy for quality improvement in health care, including Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).
  • Improving Care for Seniors after they leave the hospital – Effective January 1, 2011. The Community Care Transitions Program will help high-risk Medicare beneficiaries who are hospitalized avoid unnecessary re-admissions by coordinating care and connecting patients to services in their communities.
  • Increasing Access to Services at Home and in the Community – Effective beginning October 1, 2011. The new Community First Choice Option allows states to offer home and community based services to disabled individuals through Medicaid rather than institutional care in nursing homes.
  • New Voluntary Options for Long-Term Care Insurance – Benefit plan no later than October 1, 2012. The law creates a voluntary long-term care insurance program called CLASS, to provide cash benefits to adults who become disabled.
  • Improving Preventive Health Coverage – Effective January 1, 2013. To expand the number of Americans receiving preventive care, the law provides new funding to state Medicaid programs that choose to cover preventive services for patients at little or no cost.
  • Additional Funding for the Children’s Health Insurance Program (CHIP) – Effective October 1, 2013. Under the new law, states will receive two more years of funding to continue coverage for children not eligible for Medicaid.
  • Health Insurance Exchanges – Effective January 1, 2014. Starting in 2014, if your employer doesn’t offer insurance, you will be able to buy insurance directly in an Exchange – a new transparent and competitive insurance marketplace where individuals and small businesses can buy affordable and qualified health benefit plans. Exchanges will offer you a choice of health plans that meet certain benefits and cost standards. Starting in 2014, members of Congress will be getting their health care insurance through Exchanges also.
  • Promoting Individual Responsibility – Effective January 1, 2014. Under the new law, individuals who can afford it will be required to obtain basic health insurance coverage or pay a fee to help offset the costs of caring for uninsured Americans. If affordable coverage is not available to an individual, he or she will be eligible for an exemption.
  • Ensuring Free Choice – Effective January 1, 2014. Employees meeting certain requirements who cannot afford the coverage provided by their employer may take whatever funds their employer might have contributed to their insurance and use these resources to help purchase a more affordable plan in the new health insurance Exchanges. These new competitive marketplaces will allow individuals and small businesses to buy qualified health benefit plans. Starting in 2014, members of Congress will be getting their health insurance through Exchanges, and all Americans will have the choice of buying insurance through them, too.
  • Increasing Access to Medicaid – Effective January 1, 2014. Americans who earn less than 133% of the poverty level [approximately $14,000 for an individual and $29,000 for a family of four] will be eligible to enroll in Medicaid. States will receive 100% federal funding for the first three years to support this expanded coverage, phasing to 90% federal funding in subsequent years.
  • Makes Care More Affordable – Effective January 1, 2014. Tax credits to make it easier for the middle class to afford insurance will become available for people with incomes above 100% and below 400% of the poverty level [$43,000 for an individual or $88,000 for a family of four in 2010] who are not eligible for other affordable coverage. These individuals may also qualify for reduced cost-sharing – e.g. copayments, coinsurance, and deductibles.
  • Ensuring Coverage for Individuals Participating in Clinical Trials – Effective January 1, 2014. Insurers will be prohibited from dropping or limiting coverage because an individual chooses to participate in a clinical trial. This applies to all clinical trials that treat cancer or other life-threatening diseases.
  • No Discrimination due to Pre-Existing Conditions or Gender – Effective January 1, 2014. The law implements strong reforms that prohibit insurance companies from refusing to sell coverage or renew policies because of an individual’s pre-existing conditions. Also, in the individual and small group market, it eliminates the ability of insurance companies to charge higher rates due to gender or health status.

As these provisions of the law become effective, it is important for you know if a provision will benefit you or not in your particular situation. Click here, Patient Protection and Affordable Care Act to view a copy of the Act.  You may also contact the Office of Health Insurance in the Louisiana Department of Insurance with questions you may have pertaining to a particular provision at (225) 219-4770.

First Party Property Prescription on Claims -
Homeowners Insurance

Prior to Hurricanes Katrina and Rita in 2005, Louisiana law only allowed 12 months for a policyholder to file suit on a homeowners insurance claim.  Given the unprecedented number of claims to be adjusted and the time needed to complete settlements, Commissioner Donelon encouraged the Louisiana Legislature to increase the one year time frame on certain property policies of insurance.  Act 43 of the 2007 Regular Session changed the law to read that no insurance contract may limit the right of action against the insurer to a period of less than 24 months after the inception of a loss when the claim is a first party claim, for certain property insurance policies (R.S. 22:868).

In times of a major catastrophe, this extension allows an insured and insurer time to work toward agreeable settlements of all aspects of the claims adjustment and resolution process.
 
If you should sustain a loss covered under your homeowners policy of insurance, it is important to know your duties after a loss, including the limitations on filing suit on a claim.

5 Year Anniversary of Hurricanes Katrina and Rita

August 29, 2005, 7:10 A.M.  EST was the beginning of a change in many people’s lives.  Hurricane Katrina made landfall in southern Plaquemines Parish as a Category 3 hurricane.  Maximum winds, estimated near 125 mph, ravaged and dismantled parts of the coast for days.  Hurricane Katrina would go on to be named the sixth strongest storm and one of the five most deadly hurricanes ever. It would be the cause of 1,836 people losing their lives in the actual hurricane and subsequent floods. The total property damage was estimated at $81 billion.  Three weeks after Hurricane Katrina ripped through causing havoc for residents along the Gulf Coast, Hurricane Rita followed with even more devastating winds that delayed recovery efforts. Rita would go on to cause $11.3 billion in damage along the Gulf Coast.

As the anniversary of Hurricanes Katrina and Rita nears, we should be reminded to be prepared for the worst.  Colorado State University’s Tropical Meteorology Project forecasters predict that 15 named storms will form during the 2010 Atlantic hurricane season.  Of those 15, eight are expected to escalate into hurricanes, with four becoming intense hurricanes, which are Category 3 storms like Katrina and Rita with sustained winds of at least 111 mph.  The Atlantic hurricane season runs from June 1, through November 30, so there are several potential storm months left this year.

Hurricane Katrina is the worst natural disaster the insurance industry has ever handled. Lessons from these storms have brought the state great improvements.  Stronger building codes, strengthened levees and increased insurance coverage are just a few things that have helped our insurance market.  Consumers are more knowledgeable about coverage limitations and storm deductibles.

EDITOR'S LETTER

Peak Months of Hurricane Season – Get flood insurance while it is available

Congress has recently passed legislation to reapprove funding for the National Flood Insurance Program (NFIP).  Homeowners can now renew flood policies, and prospective home buyers can get the flood insurance needed to complete their purchases.  This legislative passage will allow the flood program to continue through September 30, 2010, and is retroactive to cover the lapse period that started June 1, 2010.   For most mortgage loans, federal law requires anyone purchasing property in a flood zone have flood insurance in place before closing on the purchase and anyone living in a flood zone to maintain flood insurance for the life of the loan.  If purchasing a home in the near future and the home is located in a flood zone, consumers are encouraged to consider closing on purchases before September 30, 2010.  Once the program reauthorization expires, it is hard to tell when or for how long it will be reauthorized again.

Floods are one of the most common natural disasters in the United States, and standard homeowners insurance doesn’t cover damage caused by flooding.  It is important to ensure that risks have the proper property and flood coverage in place.  Consumers can purchase NFIP flood insurance policies that cover up to $250,000 in damage for the building and up to $100,000 for contents, or personal property. August and September are the peak months of the Atlantic hurricane season.  In August 2005, Hurricane Katrina caused $13.2 billion in flood claims and in September 2005, Hurricane Rita caused $207 million. Moreover, in August 2008, Hurricane Gustav caused $92 million in flood claims and in September 2008, Hurricane Ike caused $309 million in flood damage.   

According to the NFIP, there is normally a 30-day waiting period before flood insurance goes into effect. Exceptions to the waiting period would be if initial purchase of flood insurance is in connection with the making, increasing, extending or renewing of a loan, or if the initial purchase of flood insurance is made during the 13-month period following the revision or update of a flood rate map for a community. 

Don’t get caught without flood insurance this hurricane season.

Office of Consumer Advocacy P.O. Box 94214Baton Rouge, LA 70804-9214
(225) 219-0619 or (800)259-5300 www.ldi.la.gov consumeradvocacy@ldi.la.gov