Healthcare Updates

This isn’t Jenga: How health insurance laws are made and changed

health insurance laws health insurance laws

Have you ever played that game where you start with a stack of building blocks─perfectly stacked, mind you─only to then slowly and deliberately take it apart block-by-block. Yeah, Jenga! We consider it fun because we never know when it’s all going to fall apart, and we intentionally set up the other team to lose. The whole game is built on the premise that at any time, everything can end and someone will lose.


Isn’t this starting to sound like our health insurance system?

Before we dive into the nitty-gritty of health insurance laws, let’s remember that it’s okay to relax and stop holding your breath. This is not to say that nothing can change in our healthcare system. However, we must never forget two essential parts of this conversation: how laws are actually made and changed, and when they come into effect.  And second, I think we can all acknowledge that the topic of law─especially health insurance law─is tremendously complicated.

Health insurance too often feels like we’re watching the Netflix original House of Cards, where you never know how the next episode might entirely change the plot. Or maybe it feels more like that episode of The Office season 9 when Pete builds a giant tower of complaint cards with Kevin. No matter what, when we don’t know how something is developed, it’s hard to know how and when change may occur.


How do laws actually work?

To most people, laws seem quite ambiguous and unclear, which can lead to significant worry. Add on top of that the fear of what it means to not have medical coverage, and you have a recipe for frustrated people no matter what the health insurance law is. So let’s take a look at how these things called laws actually come into effect.

First, the new concept or proposal is shaped into its initial draft called a bill and is introduced by a primary sponsor (check out our favorite video about laws). From that first sponsored submission, the bill is then assigned a committee, where they discuss and wrestle through the concept and either reject it, accept it or alter it to prepare the bill for the House or the Senate floor in Congress.

At this point, the bill then comes to a vote, which can start in either the House or the Senate. (As a cool side note, the Senate still uses verbal yays and nays for their voting!)  Once a bill passes its first vote, it must also pass in the second alternate vote.

If a bill has successfully passed all of these steps, it is then brought to the table of the President, where it can either be signed into law or it can be vetoed. If the bill is vetoed, Congress can overrule the veto with 2/3 of those present in both the House and Senate chambers. This situation is fairly rare, but it happens from time to time.  

Most often, Congress won’t waste their time sending a bill it knows will be vetoed to the President unless the intention is to make a social statement. Laws can take many different lengths of time to actually be applied, but the final timing of a new law’s rollout is always included in the language of the law itself.


What about federal and state judges?

Something that is constantly on the table for any law is how it might be interpreted and applied against the Constitution of the United States. And to be certain, the court system is complicated at a Federal level, let alone the State level.  

From the 30,000 foot perspective, there are three layers to the Federal Court system. The first is the district court; there are 94 of those throughout the U.S. The second is circuit courts; there are only 13 of those. And then finally the U.S. Supreme Court.

A court proceeding begins by a case being filed with the court claiming legal infraction from one party against another. Basically, one party claims that another party is violating their Constitutional rights. The courts will first analyze the case to see if there is already legal precedence, i.e. did the court already rule on this topic? If so, they will not reject the former ruling unless there is new evidence to be introduced with this case. If there is no legal precedence, then they will make the first ruling based on the interpretation and respective application of the Constitution and other laws.  

Then there are appeals (potentially). If one of the parties is unhappy with the court ruling and believes it to be unfair, they may appeal to the next highest court. That next court can choose to either hear that case or not. If they choose to hear it, the court will then evaluate any formerly misinterpreted or misapplied laws as it seeks the justice of the (potentially) wronged party. These cases, such as the Roe vs. Wade ruling, are then used to enforce interpreted law for decades.


What about executive orders?

In recent news, you’ve likely heard lots of discussion around executive orders. And if anything else has been ambiguous so far, this topic is by far the most mysterious. What’s important to remember is that the intended purpose of this Constitutional provision was to allow the President to make things happen more quickly in times of crisis and protect the civil rights of disadvantaged. In recent years, we have seen a significant increase in the usage of this power.

An executive order is generally delivered in the form of a letter, which is then delivered to the departments that will be impacted. Specifically, when considering recent health insurance laws that have changed, including the removal of the Individual Shared Responsibility and the allowance of Association Plans, the orders were delivered to the IRS (amongst other departments). From there, the IRS had anywhere from 6 to 18 months to deliver their position response on how the executive order letter is to be applied.


Why does this matter for health insurance?

Although it has taken some time to arrive at the driving point of this post, these fundamental elements are essential to remember when worrying about our health insurance plans. Almost daily, I am asked by someone if something they heard on the news is going to change their healthcare coverage this week.  The answer upon which you can rest assured is no, it will not change your plan this week.

However, health insurance indeed is always changing, and it will likely keep doing so. But, it changes in quite a predictable pattern and speed. From committees, to voting, to signatures or vetoes, court rulings and appeals, all of these can come into play before health insurance laws actually having a real impact on you.

Let me reiterate: there will be change!  Whether it is the replacement of the Affordable Care Act (Obamacare) or the installment of Medicare For All, over the next 10 years, there will likely be dramatic reform in the U.S. health insurance system. However, we want to help people understand that health insurance, while perhaps the most problematic and important thing in America right now, is not a house of cards, and certainly not like playing a game of Jenga.

Any changes to our healthcare system are being monitored by our team here at Remodel Health every single day. Our industry experts are tirelessly scouring the newest committees and submitted pieces of legislation so that we can continue to provide the very best solutions available, and we will keep our customers informed and aware as we help you navigate the ever-changing health insurance waters.