Come Jan. 1, a state law requiring coverage of surgeries and other medical care for people with abnormalities affecting their faces and heads will take effect for the plans offered on Arkansas' health insurance exchange.
If the requirement results in higher premiums for those plans, the 2010 federal health-care overhaul law requires Arkansas to cover the increased cost.
That's because the federal Patient Protection and Affordable Care Act requires states to cover the cost of benefits that they mandate that are not considered "essential" under the federal law.
One insurer that offers plans on the Arkansas exchange doesn't expect higher premiums to result because its current plans include the coverage, but others are still working to determine the impact.
"It is possible the state would have a minimal exposure as a percentage of the premium that is associated with the craniofacial benefit," Insurance Department spokesman Alice Jones said in an email last month. "Since we do not have any claims data, it is impossible to determine what that cost would be at this time."
An average of about 25 babies per 10,000 births are born with cleft lips, cleft palates or craniosyntosis, in which the joints between the bones of the skull close prematurely, according to the Arkansas Children's Hospital Research Institute.
Set up in every state under the federal Patient Protection and Affordable Care Act, insurance exchanges allow people to shop for coverage and apply for subsidies to help them pay for it.
In Arkansas, those covered by exchange plans include more than 120,000 people enrolled in Medicaid-funded plans under the so-called private option as of March 31, as well as more than 40,000 people enrolled in non-Medicaid plans as of April 21.
In addition, 61 Arkansans were enrolled as of March 23 in plans on an exchange for small-business employees.
The federal health-care law requires exchange plans to cover certain "essential health benefits," including doctor visits, hospitalization, emergency services, and children's dental and vision care.
If a state requires the plans to cover benefits in addition to the ones considered essential, the federal law requires the state to cover the cost of the additional benefits.
Regulations issued by the U.S. Department of Health and Human Services in February 2013 make an exception for any state-mandated benefits that went into effect on or before Dec. 31, 2011. The regulations require states to cover the cost of benefits that they mandate after that date.
The regulations require insurance companies to calculate the cost of the benefits and for states to reimburse the enrollees, by either making direct payments to the enrollees or paying the insurance companies on the enrollees' behalf.
Asked how the regulations would apply to coverage purchased by the state Medicaid program under the private option, a spokesman for the Centers for Medicare and Medicaid Services referred a reporter to the Arkansas Department of Insurance.
Zane Chrisman, an attorney specialist with the Insurance Department, said last week that she was still waiting for guidance from the federal agency about what payments are required and how they should be made.
Amy Webb, a spokesman for the Arkansas Department of Human Services, said the issue is "something we'll be discussing with the Insurance Department and our attorneys in more detail."
Max Greenwood, a spokesman for Arkansas Blue Cross and Blue Shield, said the company and its national affiliate, the Blue Cross and Blue Shield Association, haven't determined what effect the state-mandated coverage will have on the premiums for the plans they offer on the exchange.
Mike Stock, chief executive of Little Rock-based QualChoice Health Insurance, said his company's plans already provide the required coverage, so he doesn't expect the law to result in a premium increase.
A spokesman for St. Louis-based Centene Corp., which also offers plans on the exchange, didn't return a call seeking comment.
According to the Arkansas Children's Hospital Research Institute, between 2006 and 2010, an average of about 95 babies a year were born with cleft lips, cleft palates or craniosyntosis.
Cosmetic or not
Even before the state law, Act 1226 of 2013, was passed, Arkansas insurers covered some surgeries to correct craniofacial anomalies.
Proponents of the law contended that claims for some types of treatment were denied because the insurance companies didn't consider them to be medically necessary.
The state law requires insurers to pay for surgery and related medical care necessary to "improve a functional impairment that results from the craniofacial anomaly as determined by a nationally accredited cleft-craniofacial team."
In addition to surgery, the law requires companies to pay for dental care, vision care and the use of at least one hearing aid associated with a craniofacial anomaly.
According to AmeriFace, a Las Vegas-based nonprofit organization that provides educational materials and other support to people with craniofacial anomalies, at least 15 other states also require coverage for treatment related to cleft palates, which occur when the tissue forming the roof of a baby's mouth does not join together completely.
The Arkansas law passed in the state House 88-0 and in the Senate 28-1. Gov. Mike Beebe signed the bill into law on April 15, 2013.
The law took effect Aug. 16, after insurance companies had already submitted the plans they are offering on the exchanges this year.
The benefit will be required for plans the companies submit to the Insurance Department for next year. Those plans must be submitted to the department by June 15.
The coverage mandate has already taken effect for insurance plans that are not offered on the exchanges. It does not apply to plans offered by employers that take on the risk of providing insurance, because those plans are exempt from state regulation.
Sen. Stephanie Flowers, D-Pine Bluff, the only legislator to vote against the legislation that became Act 1226, said she didn't remember why she opposed it, but that the effect on the private option and premiums was likely a concern.
"I'm not for just adding on a whole lot of costs that are not part of the Affordable Care Act," Flowers said. "I understand it was 10 essential health benefits, so let's deal with that."
The sponsor of Act 1226, Rep. Fonda Hawthorne, D-Ashdown, said she didn't know about the potential expense to the state at the time she sponsored the legislation.
She said she doesn't think the cost will be high because the anomalies affect a small number of people. It's an expense the state should be willing to bear, she said.
"These people have to have this surgery so they can eat and breathe," she said.
She said her inspiration for the bill came from Wendelyn Osborne, who grew up in Ashdown and suffers from craniometaphyseal dysplasia, a rare genetic disorder in which the growth of the bones in the head is excessive.
Osborne, 48, started pushing for a law requiring coverage for craniofacial anomalies after she was forced to cancel a surgery she had scheduled in 2001 to realign her jaw.
The day before the surgery was to have taken place, her insurance company notified her that it would not cover it because it was considered cosmetic, Osborne said.
"A lot of insurance companies don't want to pay for oral, they don't want to pay for visual and they don't want to pay for hearing aids," Osborne said.
Kirt Simmons, director of orthodontics at Arkansas Children's Hospital, said insurance companies have often paid for the cost of corrective surgery while refusing to pay for orthodontic work required to prepare the patient for the surgery.
In those cases, the patient may end up paying for the cost out of pocket, or the hospital may "eat" the charges because the patient can't afford to pay, he said.
Since the law was passed, he said, he hasn't heard about as many denials.
"We usually just send a copy of the [law] to the insurance company," Simmons said. "To my knowledge, that's been all we've had to do."
A Section on 05/26/2014