Final 2019 Marketplace Rules from the Trump Administration Will Harm Consumers
In early April, the Trump administration issued its final rule to set standards for health insurance sold in the Affordable Care Act’s marketplaces in 2019. In keeping with the spirit of other recent Trump administration policies, the rule, known as the “Notice of Benefits and Payment Parameters” rule, makes changes that will undermine some core health care consumer protections. Here are five areas where the rule can damage health coverage and care for families:
1. Coverage of Essential Health Benefits may weaken, harming people with preexisting health conditions
The ACA requires health plans in the individual and small group markets to cover 10 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 rule loosens restrictions regarding the benchmark for a given state’s essential health benefits package, and loosens rules for insurers in their implementation of these benefits within the plans they sell.
While currently states must choose benchmarks based on plans sold within their own state, the rule gives 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, critical services, particularly for high-need consumers, will be watered down. This will especially harm people with preexisting conditions who may find the services they need are no longer adequately covered.
The preamble to the rule does remind states that benefit designs cannot be discriminatory, and that there must be a balance of benefits in the ten categories. The final rule also says that states can look to some of the largest plans in their states (not smaller plans that are often stingy, as originally proposed) to benchmark their benefits. But it will now be up to states to decide how to move forward, and to consumer advocates in each state to carefully watch how proposed benchmarks change and to raise their voices about plan designs that are not working for 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. Oral health is part of a larger essential health benefit category of “pediatric services”, leaving it vulnerable to benchmark revisions.
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 rule removes 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 rule also removes the requirement that a Navigator entity be physically present in the area it serves. People could thus end up with no in-person options for free, unbiased enrollment assistance.
Ironically, even while the rule weakens access to in-person assistance, the preamble acknowledges that in-person assistance has been important to consumers. Advocates should thus continue to monitor marketplaces’ contracting processes for enrollment assistance, and urge that marketplace administrators and CCIIO consider consumers’ needs for unbiased, local help as they request proposals and award navigator contracts.
3. Standardized “Simple Choice” Plans will disappear
For 2017 and 2018, the Centers for Medicare and Medicaid Services (CMS) has encouraged insurers to offer specific 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 final rule, Simple Choice plans will disappear in 2019. Consumers may 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 unravels federal network adequacy requirements that hold insurers in federally facilitated marketplaces and state-based marketplaces that use the federal marketplace website accountable for delivering adequate access to providers. Instead of relying on specific provider network adequacy standards set as a minimum floor by CMS, all states will now 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. Without a federal floor, states should ensure they have clear, quantitative network adequacy standards in place so that people have guaranteed access to the health care providers they need once they enroll in coverage.
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, quality improvement, 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 rule weakens these requirements for adjusting MLR requirements, making it easier for marketplace insurers to gain approval for excessive profits driven by premium hikes.
Additionally, the rule requires insurers to justify and regulators to review only of proposed premium rate increases that are at least 15 percent, instead of the current standard that states or the federal government review proposed premium increases of 10 percent or more.
Altogether, the final rule is bad news for consumers. Building on other efforts of the administration to sabotage health care, this rule will decrease access and increase health care premiums at a time when people are asking for the exact opposite from their leaders.
It is now up to advocates, state regulators, exchange administrators, and health insurers to come together to ensure the benefits and protections consumers need continue despite the harmful actions in this rule.