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Tuesday, November 7, 2017

Proposed 2019 Marketplace Rules from the Trump Administration Would Harm Consumers

Last week, the administration issued its proposed “Notice of Benefits and Payment Parameters” rule to set standards for health insurance sold in the Affordable Care Act’s marketplaces in 2019. These changes would undermine some core consumer protections under the Affordable Care Act. If this rule becomes final, it could damage health coverage and care for families in several ways. Here are five areas that raise concerns:

1. Coverage of Essential Health Benefits may weaken

The Affordable Care Act (ACA) requires health plans in the individual and small group markets to cover ten essential health benefits (EHB). However, the extent of coverage in each category is determined according to rules that give states some discretion in setting a “benchmark plan” for the coverage. The proposed rule loosens restrictions regarding the benchmark for a given state’s essential health benefits package, and loosens rules for insurers in their implementation of EHB within the plans they sell. Whereas currently states must choose benchmarks based on plans (such as small group plans) sold within their own state, the rule proposes to give states significant latitude in diluting essential health benefits protections: selecting a benchmark based on a plan sold in another state, substituting just a category of benefits for the category as it is sold in another state, or even developing their own benchmark from scratch. 

Essential health benefits protections are in the ACA for a reason: before the ACA, individual insurance was routinely sold with inadequate benefits. In developing benchmarks from scratch or selecting across states’ benchmarks, we are concerned that critical services, particularly for high-need consumers, will be watered down. It is particularly concerning that the rule also proposes that in implementing the EHB, insurers can substitute benefits across categories, meaning they could trade off one type of service for another in the plans they sell to consumers. 

We are also concerned about the impact of this change for pediatric oral health coverage specifically, a benefit that has helped millions of children gain access to care. With weakened standards, states can allow plans to provide very limited coverage, such as only for cleaning, sealants, and diagnoses, and not for fillings and other needed treatment.

2. Consumers could lose in-person assistance

The ACA requires that marketplace consumers have access to Navigators, people who are trained to inform the public about marketplace plans in an unbiased way and provide free help to sign up for marketplace coverage. Consumers have relied on community-based Navigator programs that understand the local area and the unique needs of populations in each area. The proposed rule would remove the requirement that each marketplace have at least two Navigator entities and that one of these entities must be a community and consumer-focused nonprofit group.  The proposed rule would also remove the requirement that a Navigator entity be physically present in the area it serves. Under the proposed rule, people could end up with no in-person options for free, unbiased enrollment assistance.

3. Standardized “Simple Choice” Plans may disappear

For 2016 and this year, the Centers for Medicare and Medicaid Services (CMS) has encouraged insurers to offer plans that cover a number of services “pre-deductible” by offering to prominently display these plans as “Simple Choice” plans on healthcare.gov. In these plans, consumers pay flat copayments for services such as doctor visits and generic drugs without first meeting a deductible. This makes basic care more affordable. (Consumers still may face a deductible for other services, such as hospital care.) Under the proposed rule, Simple Choice plans would no longer be prominently displayed, so insurers will have less incentive to offer them, and consumers will have a hard time finding plans that offer pre-deductible services or lose access to them entirely.

4. Network adequacy standards could weaken

The rule proposes to unravel federal network adequacy requirements that hold marketplace plans across the country accountable for delivering adequate access to providers. Under current rules states must comply with certain federal network adequacy standards. The rule proposes that going forward states will be responsible for setting their own network adequacy standards as long as they meet a broad “reasonable access standard.” If state law or regulations do not give the state’s regulators the authority to review network adequacy, the rule proposes to rely on the insurance company receiving “accreditation” (commercial, Medicaid, or exchange) from a CMS-recognized accrediting entity. Networks can be approved for unaccredited insurers if they submit an access plan that shows the issuer meets requirements consistent with the National Association of Insurance Commissioners (NAIC) network adequacy model act.

By undoing federal protections, the rule would lead to patchwork accountability processes for insurance networks across the country, leaving some consumers with insufficient access to providers. 

5. Insurers could keep more money for profits

Current medical loss ratio (MLR) requirements generally require insurers in the individual market to spend at least 80 percent of premium dollars for health care and quality assurance; they can keep up to 20 percent of premium dollars for administration and profits. If a state asserts that its individual insurance market is unstable, CMS can adjust this ratio, but to invoke this flexibility CMS must examine a number of factors including the likely impact on consumers’ costs and whether the insurers are already solvent and profitable before approving a change. The proposed rule would weaken these requirements for adjusting MLR requirements, making it easier for marketplace insurers to gain approval for excessive profits driven by premium hikes.

Consumers and their advocates can express their concerns with the Proposed 2019 Notice of Benefit and Payment Parameters rule by commenting on the proposed rule up until 5 PM on November 27, 2017. View the proposed rule for details on how to comment, or reach out to cmcandrew@familiesusa.org with any questions about the commenting process.