U.S. Releases New Healthcare Reform Rules on Insurance Coverage

WASHINGTON (Reuters) - President Barack Obama's administration on Tuesday formally proposed new rules requiring insurers to cover people with preexisting conditions and set minimum health benefits to millions of others under U.S. healthcare reform law.

Two weeks after Obama's re-election ensured the survival of the 2010 law that Republicans have vowed to repeal, the proposal is the first in an expected deluge of rulemaking to implement the law in time for its Jan. 1, 2014, start date.

Defining essential benefits, guaranteeing sick people access to coverage and promoting healthy living are well-known goals of the Patient Protection and Affordable Care Act. But the proposed rules set down in writing how each would be accomplished while giving stakeholders and the public an opportunity for comment.

The benefits rule provides states and insurers guidance on benefits and costs that must be covered through new state-based online healthcare exchanges, and through small-group and individual plans that are outside the exchanges but not grandfathered under the law.

Taking aim at critics who say reforms amount to a rigid, "one-size-fits-all" bureaucratic system, the Department of Health and Human Services proposed giving states the discretion to choose essential benefit benchmarks from typical private or public plans already operating within their borders.

Health insurance companies would be prohibited from denying coverage because of a pre-existing condition, or from charging higher premiums because of current or past health problems, gender, or occupation. The rules would ensure access to catastrophic coverage plans for young adults and others who could not afford coverage otherwise.

The administration also proposed a rule to expand employment-based wellness programs to help control healthcare spending and to protect individuals from unfair underwriting practices that could otherwise reduce benefits based on their health status.

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