Federal Appeals Court Dismisses Two Challenges to the Individual Mandate

Posted on Sep 9, 2011 in Health Care Reform

On September 8, 2011, the U.S. Court of Appeals for the 4th Circuit in Richmond, Virginia issued rulings on two appeals. They dismissed lawsuits by the State of Virginia and Liberty University that challenged the constitutionality of the Patient Protection and Affordable Care Act’s (PPACA) individual mandate.

Both cases were dismissed on procedural grounds, so the court did not consider the constitutional challenges to the individual mandate in the PPACA. So don’t believe what you hear that the courts ruled on the issue of constitutionality in these cases.

In the State of Virginia case, the court ruled that the state did not have the legal right to challenge the constitutionality of the individual mandate. Virginia was challenging the individual mandate on the grounds that Virginia has a state law that individuals cannot be forced to buy health insurance.

In the Liberty University case, the court ruled that a federal tax law prevented them from considering the case because the mandate imposes a tax that has not yet been collected.

In June, the 6th Circuit Court of Appeals in Cincinnati upheld the constitutionality of the individual mandate. In August, the 11th Circuit Court of Appeals in Atlanta ruled it unconstitutional. This issue is expected to eventually be decided by the Supreme Court.

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Rate Review will Apply to Insurance Policies Sold Through Associations

Posted on Sep 6, 2011 in Health Care Reform

On September 1, 2011, the Department of Health and Human Services (HHS) released an amendment to the rate review provisions of the Patient Protection and Affordable Care Act (PPACA). The amendment extends the rate review process to coverage sold to individuals and small groups through associations effective November 1, 2011. No other changes to the current rate review process were announced.

The rate review process under PPACA went into effect on July 1, 2011. Rate review applies to increases of 10% or more for non-grandfathered individual and small group products (not individual policies). States that have “effective” rate review programs provide the review, while for states identified as having “ineffective” rate review, HHS may review rate increases.

Insurers requesting rate increases of more than 10% are now required to post an explanation of the increase on their website. Beginning in mid-September, consumers will be able to go to HealthCare.gov to view information explaining proposed increases of 10% or more. Consumers will see a summary of the key factors driving rate increases and an explanation provided by the insurance company for why the proposed increase is needed.

For more information on rate review and this announcement, visit: http://www.healthcare.gov/news/factsheets/ratereview09012011a.html

For state-by-state information on rate review, visit: http://www.healthcare.gov/news/factsheets/ratereview09012011b.html

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