The Institute of Medicine on Friday released guidelines for the Obama administration to decide what constitutes an “essential benefits package” for the Affordable Care Act, also known as Obamacare. The report is expected to form the basis for what most insurance companies will be required to cover by federal law starting in 2014.
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“This new federal requirement is just one more example of the legal issues lurking in Obamacare. Until now, required health insurance coverage has been set exclusively by the states, and policies have been sold entirely intrastate. States haven’t hesitated to mandate coverage of diseases du jour, but these coverage requirements vary widely from state to state. This is one reason health insurance is so expensive, leading many health care experts to advocate for insurance to be sold across state lines. From that standpoint, the federal government’s new role is likely welcome.
“But the states are not likely to give up their state mandates lightly. So the open legal question is whether all the varying state requirements still remain in place or whether they are pre-empted by the federal law. Still another reason why health insurance premiums will rise until this issue is resolved.”
“This raises questions some of us have been debating as we’ve seen Obamacare develop: How will contract disputes be resolved? In federal court? In the state court of the buyer? In the state court where the seller is located (assuming an out-of-state carrier)? By the Department of insurance? By the exchange itself?
“It would seem if HHS is determining required benefits, the federal courts would have jurisdiction for violations for coverage disputes. But would that also be true for other issues, such as timely payment of claims or misleading marketing? Is the carrier exempt from state litigation – for some of this, all of this, none of this? What a mess.”
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