New ACA requirements for insurance companies kick in

Rebate checks go out to consumers; more women's preventive services now offered without copays

After the U.S. Supreme Court’s ruling that the Affordable Care Act (ACA) was mostly constitutional, implementation of the controversial health care reform law marches on. Two more provisions likely to be popular among patients went into effect August 1. Health insurance companies who didn’t pay enough money out on benefits and kept too much in administrative costs and profit in 2011 had to send rebate checks to consumers or their employers. And many women now have free access to eight preventive services, including contraception.

This year, 12.8 million Americans benefited from $1.1 billion in rebates from health insurance companies, White House Press Secretary Jay Carney told reporters aboard Air Force One on August 1, the deadline for sending the checks, according to a transcript. A day earlier, U.S. Department of Health & Human Services (HHS) Secretary Kathleen Sebelius announced that an estimated 47 million American women will benefit from insurance companies being required to offer these preventive services without cost sharing such as copays or deductibles, when their plans renew or if they get new insurance.

Rebate checks

Most people think they pay insurance companies too much, Brian Gallagher, BSPharm, JD, APhA Senior Vice President of Government Affairs, told “If they get a check back from their insurance company, health care reform just got a lot more palatable to a lot of people.” More money paid out in benefits means more money for patient care as well as for pharmacists, physicians, and other health care providers, he pointed out.

The rebate checks are a part of the law’s medical loss ratio provision. The medical loss ratio is a formula used to calculate how much insurance companies must spend for health care services out of each premium dollar. ACA requires insurance companies in the individual and small group markets to spend 80% and companies in the large group market to spend 85% of premium money on health care instead of on administrative costs and profit—or pay a rebate to their customers by August 1 of the following year.

CMS published the medical loss ratio final rule on December 7, 2011, which categorized services similar to medication therapy management (MTM) services as health care, not as administrative costs. The final rule was mostly unchanged from the interim final rule on which APhA commented January 31, 2011, recommending that MTM be mentioned by name. This was important to pharmacy because insurance companies can count money paid to pharmacists for MTM as part of the money paid in benefits rather than from their profits under the medical loss ratio calculation.

Free preventive services for women

The eight services that now have no cost sharing were recommended by the Institute of Medicine to HHS last year. They are the following:

  • Well-woman visits
  • Gestational diabetes screening
  • Domestic and interpersonal violence screening and counseling
  • FDA-approved contraceptive methods and contraceptive education and counseling
  • Breastfeeding support, supplies, and counseling
  • HPV (human papillomavirus) DNA testing for women 30 years or older
  • Sexually transmitted infection counseling
  • HIV screening and counseling

Whether a woman has a copay for contraception depends on whether her insurance plan is new or has been renewed after August 1. Checking whether to charge the copay would not be difficult, said Michael Kim, PharmD, President, Grubb’s Care Pharmacy and Grubb’s NW Specialty Pharmacy in Washington, DC. “It would take a staff member about 30 seconds to check the insurance copay if the prescription is already on file at the pharmacy,” Kim told “If the patient brings in a new prescription, then it would take a bit longer to enter all of the prescription information and submit the claim to the insurance company to verify the prescription copay.”

Kim cautioned that two things may be considered a burden by some pharmacies: the time it takes a staff member to check patient eligibility and copay, and the cost of transmitting a test claim to check for eligibility and copay (the estimated cost is 5 cents to 25 cents per electronic transmission).

Regarding the hoped-for positive impact on women’s health of no cost sharing for these preventive services, Sebelius wrote in a July 31 blog post that “women often take care of their families first and put off their own health care needs. Too often, they have gone without preventive services, worrying about what even a $20 insurance copay would mean to their families’ budgets and choosing to pay for groceries or rent instead.”

Meanwhile, nearly 99% of women have used contraception, but more than one-half of women aged 18 years to 34 years have trouble affording it, according to the White House.

In a policy intended to address controversy around women using contraception, the Obama administration announced on February 10 that women can access free contraception “no matter where she works,” but if she works for a religious employer who objects, the employer won’t have to “provide, pay for, or refer for contraception coverage, but her insurance company will be required to directly offer her contraceptive care free of charge.”

The above services are included in the Obama administration’s list of preventive services for women for which coverage is required by the health care reform law.

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