Fundamentals in Healthcare Law Webinar Series - May 18, 2022

1. Fundamentals in Healthcare Law Curriculum
2021 – 2022 WEBINAR SERIES
PA R S O N S B E H L E . C O M
N AT I O N A L E X P E R T I S E . R E G I O N A L L AW F I R M .
Commercial Health Insurance
Wednesday, May 18, 2022

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Legal Disclaimer
This webinar is based on available information as of May 18, 2022, but
everyone must understand that this webinar is not a substitute for legal
advice. This presentation is not intended and will not serve as a
substitute for legal counsel on these issues.

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Presenters
• Lee Radford
208.528.5252
lradford@parsonsbehle.com
• Kelsie Kirkham
208.528.5234
kkirkham@parsonsbehle.com

5. US Health Insurance Coverage

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How Americans Get Health Insurance
Source: www.axios.com

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Private Coverage vs. Public Coverage vs. Uninsured
Source: USHHS, CDC, National Center for Health Statistics, Health Insurance Coverage: Early Release of Estimates from
National Health Interview Survey, 2020(8/2021)

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Private Coverage vs. Public Coverage vs. Uninsured
Source: USHHS, CDC, National Center for Health Statistics, Health Insurance Coverage: Early Release of Estimates from
National Health Interview Survey, 2020(8/2021)

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Private Coverage vs. Public Coverage vs. Uninsured
Source: USHHS, CDC, National Center for Health Statistics, Health Insurance Coverage: Early Release of Estimates from
National Health Interview Survey, 2020(8/2021)

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Private Coverage vs. Public Coverage vs. Uninsured
Source: USHHS, CDC, National Center for Health Statistics, Health Insurance Coverage: Early Release of Estimates from
National Health Interview Survey, 2020(8/2021)

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Private Coverage vs. Public Coverage vs. Uninsured
Source: Kaiser Family Foundation, www.kff.org/election-state-fact-sheets/idaho

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Employer Coverage in Idaho
Source: Kaiser Family Foundation,
www.kff.org/election-state-fact-sheets/idaho

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Private Coverage vs. Public Coverage vs. Uninsured
Source: USHHS, CDC, National Center for Health Statistics, Long-term Trends in Health Insurance Coverage: Estimates
from National Health Interview Survey, 7/2019)

14. State Regulation

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Business of Insurance
• 1869 – United States Supreme Court decision, Paul v. Virginia, held that an
insurance contracts are “not the transaction of commerce” under the Commerce
Clause of the U.S. Constitution, thus leaving the regulation of insurance to the
states within state borders.
• 1944 – Supreme Court reversed itself in United States v. South-Eastern
Underwriters Association, holding that insurance contracts do affect interstate
commerce and are subject to federal regulation under the Commerce Clause.
• 1945 – McCarran-Ferguson Act places the primary authority to regulate the
“business of insurance” back with the states and reserved a federal regulatory
role to the extent such business is not regulated by state law. The Act also
provides that no federal law or regulation shall preempt that authority unless the
federal law specifically relates to the business of insurance.

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NAIC
• Rather than encourage federal regulation in the absence of adequate state
regulation, the state insurance commissioners formed the National Association
of Insurance Commissioners (NAIC) shortly after the passage of the McCarran-
Ferguson Act.
• The NAIC prepared model acts for adoption by the states to preclude a federal
regulatory role. The NAIC continues today as a resource to which both
regulators and the regulated may look for information on regulation of insurance
and for model regulations and guidelines.

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Current State Regulation of Health Insurance
• Logically, regulation by 50 states permits considerable variation in the scope and
intensity of regulation, but may cover the following:
◦ Insurance company formation and financial matters
◦ Insurance contracts and rates
◦ Unfair insurance practices
◦ Health insurer coverage and mandates
◦ Other types of insuring organizations and managed care

18. Federal Regulation

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Significant Steps in Greater
Federal Regulation of Health Insurance
• Employer sponsored health insurance and World War II (1941-1945)
• 1945 – UK goes one way, US goes the other
• Medicare (1965)
• Medicaid (1965)
• ERISA (1974)
• COBRA (1986)
• EMTALA (1986)
• Stark (1990)
• HIPAA (1996)
• CHIP (1997)
• Medicare Modernization (2003)
• PPACA (2010)

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Medicare
• Medicare is a federal health insurance program designed primarily to provide
health insurance for persons aged 65 or older, and for other specific diseases.
• Medicare was enacted in 1965 during the administration of Lyndon B. Johnson.
• Harry S. Truman and Lady Bess Truman were the first recipients of the program.
• Currently divided into four parts:
• Part A – hospital (inpatient, admitted), skilled nursing, and hospice services
• Part B – outpatient services and some providers’ services while in hospital
• Part C – Managed Medicare or Medicare Advantage
• Part D – self-administered prescription drugs

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Medicaid
• Medicaid is a federal and state program that provides health care coverage for
lower income individuals who do not have sufficient resources to pay for health
care.
• Medicaid was enacted in 1965 during the administration of Lyndon B. Johnson.
• Since 1982, all states now participate in Medicaid.
• Also covers nursing home costs for low-income individuals, subject to recovery
from assets.
• In 2010, Medicaid was expanded to individuals up to 138% of the federal poverty
level by the Patient Protection and Affordable Care Act (PPACA).
• As a joint federal-state program, states have some leeway in implementing their
Medicaid program.

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ERISA
Employee Retirement Income Security Act of 1974 (ERISA)
• Applies to all private sector employers or sponsors (such as labor trusts or
associations) that provide group health benefits, whether through the purchase
of insurance or otherwise. Health benefit plans offered by state and local
governments or churches are not subject to ERISA.
• ERISA sets standards to protect employee benefits and governs many
employee benefit plan aspects, including how employers must provide plan
information to employees and what information must be provided. ERISA also
governs the claims and appeals procedures for qualified plans.

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COBRA
• One of the protections contained in ERISA is the right to COBRA continuation
coverage, a temporary continuation of group health coverage that would
otherwise be lost due to certain life events.
• COBRA generally applies to all private-sector group health plans maintained by
employers that have at least 20 employees on more than 50 percent of its
typical business days in the previous calendar year.
• COBRA sets rules for how and when continuation coverage must be offered and
provided, how employees and their families may elect continuation coverage,
and what circumstances justify terminating continuation coverage.

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EMTALA
• The Emergency Medical Treatment and Labor Act (EMTALA) was enacted by Congress in 1986 to
ensure access to emergency services regardless of the patient’s ability to pay.
• Imposes requirements on Medicare-participating hospitals.
• Requires hospital to provide a screening examination when a request is made for an emergency
medical condition, including active labor, regardless of whether the patient can pay.
• Requires hospital to provide stabilizing treatment if patient is not stable.
• If hospital is unable to stabilize the patient because the care is beyond the hospital’s capabilities,
the hospital can implement an appropriate transfer.

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Stark
• The Stark laws or “Ethics in Patient Referrals” laws are federal laws that prohibit physicians from referring to
entities with which they have a financial relationship.
• The Stark laws are named for United States Congressman Pete Stark (CA), who sponsored the initial bill,
which first came into law in 1990.
• Required elements are:
• a physician who
• makes a referral
• for designated health services
• payable by Medicare
• to an entity
• with which the physician or family member has a financial relationship.
• The Stark law includes a number of exceptions, which have shaped United States health care.
• Physician-owned hospitals
• Leases
• Personal services arrangements
• Others
• Penalties can include exclusion from Medicare

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HIPAA
• Health Insurance Portability and Accountability Act of 1996 (HIPAA) was signed into law in 1996.
• HIPAA includes five titles:
◦ Title I – Protects health insurance coverage for employees and their families when the employee
changes jobs or loses a job.
◦ Title II – Establishes national standards for electronic health care transactions and national identifiers
for providers and plans.
 Privacy Rule
 Security Rule
◦ Title III – Pre-tax medical savings accounts
◦ Title IV – Group health plans.
◦ Title V – Company-owned life insurance policies.
• Sometimes referred to as Health Insurance Privacy and Portability Act (HIPPA), because Title I
and II deal with both portability and privacy.

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Childrens Health Insurance Program (CHIP)
• The Childrens Health Insurance Program (CHIP) is a program to cover
uninsured children in families with incomes that are low, but too high to qualify
for Medicaid.
• CHIP was enacted in 1997 in the wake of the failure of President Bill Clinton ot
implement broader health care reform.
• Senator Ted Kennedy and Senator Orrin Hatch of Utah were the key co-
sponsors of the legislation.
• Like Medicaid, CHIP is a joint program between the federal government and the
states.
• Currently reauthorized through 2027.

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PPACA (Affordable Care Act)
• The Patient Protection and Affordable Care Act (PPACA) (also labeled Obamacare) is a set of federal laws
enacted to provide more health care coverage for uninsured individuals.
• Made adjustments to all components of United States health care coverage
◦ Individual coverage
 Individual health insurance mandates
 Insurance exchanges
◦ Employer coverages
 Employer mandates
 Employer policy requirements
◦ Medicaid expansion
 Additional funds for expanding coverage
◦ Medicare adjustments
◦ Childrens Health Insurance Program changes
• Insurance requirements
◦ Restrictions on claim of preexisting conditions
◦ Essential health benefits in plans
◦ Coverage of preventive care
◦ Removal of annual and lifetime coverage caps
◦ Dependents stay on parent’s plan until 26

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Conclusion
• Although health care was originally within state jurisdiction, many
programs and initiatives over the last 80 years have significantly
increased the federal government’s role and regulatory authority in
health care.
• The result is a patchwork of both federal and state authority over
health care and health insurance, which means that nearly every
issue requires consideration of both state and federal laws.

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Thank You
• Lee Radford
208.528.5252
lradford@parsonsbehle.com
• Kelsie Kirkham
208.528.5234
kkirkham@parsonsbehle.com