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Policy and Regulatory Framework for Private Health Insurance. Gary Claxton Vice President, Kaiser Family Foundation April, 16, 2010. Market Segments. Private health insurance (PHI) has distinct segments: Direct purchase coverage (nongroup and some associations) Employer-sponsored coverage
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Policy and Regulatory Frameworkfor Private Health Insurance Gary Claxton Vice President, Kaiser Family Foundation April, 16, 2010
Market Segments • Private health insurance (PHI) has distinct segments: • Direct purchase coverage (nongroup and some associations) • Employer-sponsored coverage • Small group • Larger group • Insured • Self-funded • Supplemental and limited benefit coverage • Segments are regulated differently • State and federal roles vary by segment • HIPAA and ERISA • Other federal laws (e.g., ADA) may apply to aspects of employer-provided coverage
Benefit standards • States generally establish the minimum levels of required benefits for PHI • Offer or provide • Vary by state and by market segment • State laws do not affect self-funded plans • About ½ of people with PHI are in self-funded plans • Federal law can (and sometimes does) set standards for PHI • Benefits in self-funded plans are determined by federal law • Most federal standards aimed at process and ensuring that plans sponsors deliver what they promise • Very few federal standards regarding benefits that must be provided • Health reform bills would give the federal government a substantial role in determining benefits that would be offered by PHI
Some Policy Considerations • Purpose for covering a benefit • Financial protection • Encourage use • Insurance v. direct subsidy • Permit cost-sharing? • Insurers generally have significant discretion in how they provide a covered benefit • Network • Reimbursement • Management of use