Health Law and Policy Update
This week's updates
- Health exchange officials working though comments on federal rules
- Website helps consumers understand health insurance
- Health plans report early experiences implementing medical loss ratio requirement
- Awareness of health reform benefits erodes
- Schedule a presentation on health reform
Headlines of the week
Health exchange officials working though comments on federal rules
Colorado's Health Benefit Exchange Implementation Legislative Review Committee met this week to discuss the process the committee will use to comment on proposed federal rules regarding implementation of state health insurance exchanges. Legislative staff prepared a comprehensive guide to proposed rules issued by the Department of Health and Human Services (HHS). Comments are due Sept. 28.
The Colorado Health Benefit Exchange Board, a separate body appointed by lawmakers and the governor, also plans to comment on the proposed federal rules. A subcommittee of the exchange board is recommending the board focus its comments on four key areas: risk adjustment, navigators, network adequacy and funding structure, board member Steve Erkenbrack reported.
Both panels expressed a commitment to maximum flexibility for states.
The legislative committee devoted its meeting to going through the proposed rules, taking up first the question of whether it should comment on the proposed process for modifying the state plan for the exchange once that plan has been approved by the federal government. Committee members were unable to get through the more than 240 pages of proposed rules as summarized in legislative staff's 33-page memo. The committee decided to establish a subcommittee to work with the exchange board on comments. The committee determined the state Legislature likely had concerns that would be different from the board's.
Among the most significant issues raised by the rulemaking process is whether there ought to be uniform standards across exchanges in certain areas. Federal exchange regulations ought to balance state flexibility to establish and operate exchanges that work with uniform standards that ensure that consumers have adequate protections wherever they live. The Colorado Center on Law and Policy supports federal standards that will ensure fairness, transparency and adequacy for consumers across the country. People ought to be able to trust as they move from state to state that an exchange will offer meaningful coverage, they will be treated fairly and that they will understand what they are purchasing.
Federal standards also provide a level of certainty for employers and health insurance companies that do business in multiple states. If the standards are adequate, many states are likely to stick with them, potentially reducing the administrative complexity of compliance in varying regulatory environments.
Examples of standards important for consumer protection follow.
Navigators will guide people who use the exchange to buy health insurance. The Patient Protection and Affordable Care Act says navigators may not receive direct or indirect payments from health insurers, and it explicitly prohibits insurers from being navigators. HHS requires states to choose at least two among a list of entities to serve as navigators. That list includes community- and consumer-focused nonprofit groups; trade, industry, and professional associations; unions; chambers of commerce; commercial fishing industry organizations; ranching and farming organizations; and licensed agents and brokers. HHS seeks comments on whether at least one of the two types of entities should include a community- and consumer-focused nonprofit organization. CCLP thinks yes. A lot of people will come into the exchange who have not had insurance or who are eligible for Medicaid. They might be uncertain about the process of purchasing and enrolling in insurance - what to look for, how to determine what is best for them. Many people are likely to turn to trusted community organizations for help. Navigators ought to include some of those trusted community organizations.
HHS seeks comment on the extent to which it should codify requirements related to meaningful access to information for people with limited English proficiency and people with disabilities. Without uniform standards, many states will not provide adequate support to people who might find it difficult to access the exchange.
The proposed rules say Qualified Health Plans (QHPs) must comply with state marketing rules. The rules also bar practices that discourage the enrollment of people with significant health care needs. HHS asks for comment on whether it should issue a broad prohibition against unfair or deceptive marketing practices because of concern QHPs could be marketed to vulnerable populations such as Medicare enrollees who have no need for a QHP. CCLP's answer is yes. There ought to be minimum, enforceable standards across exchanges that ensure people are protected from unfair marketing practices.
A sampling of other issues:
A matter of particular interest to Colorado's small-business owners is the business group of one. Colorado offers sole proprietors or "business groups of one" access to the small-group insurance market. The proposed regulations define "employer" to exclude sole proprietors. HHS says states use a variety of methods to determine employer size with regard to eligibility for participation in the small-group market, and those methods might add a level of specificity not described in the federal rule. HHS seeks comment on the issue.
HHS asks for comment on whether states could use help designing tools for the exchange. The exchange must provide an electronic calculator so customers can estimate out-of-pocket health care expenses. HHS seeks comment on whether states would benefit from HHS developing a model calculator and suggestions on the design. CCLP favors development of a model calculator, a route that would be more efficient and economical for states.
The proposed rules say consumers must occupy the majority of an exchange board. They do not, however, classify as an industry representative the kind of industry-affiliated person who tips the balance away from a consumer majority on Colorado's board. HHS should tighten the definition of consumer to make it clear that people who have substantial business relationships with the insurance industry are classified as industry representatives.
Website helps consumers understand health insurance
A website the Colorado Division of Insurance unveiled Thursday aims to help health insurance consumers understand why health premiums rise, how to shop for coverage and what to do when a claim is denied. Colorado built the site with a grant from the Department of Health and Human Services, the Division of Insurance said in a news release.
"Consumers receive little or no information about proposed premium rate increases, and aren?t told why health insurance companies want to raise rates," the news release said. "This new website has many tools to help consumers become more informed about health insurance, including rate review, and other important topics."
Advancing the debate
Health plans report early experiences implementing medical loss ratio requirement
Health insurance companies reported reducing brokers' commissions and adjusting premiums to accommodate new requirements for health care spending in the Patient Protection and Affordable Care Act, according to a new study by the Government Accountability Office (GAO).
The health reform law ensures patients get better value by requiring 80 to 85 percent of premium dollars to be spent on health care, while the remainder can go for administrative expenses. The share spent on medical costs is known as the medical loss ratio or MLR.
Insurers interviewed for the study offered varying responses on whether the MLR requirement would affect activities to improve health care quality and where they do business. One health plan reported it might exit the individual market in some states where it didn't expect to meet MLR requirements, the GAO reported.
Awareness of health reform benefits erodes
Public awareness of the benefits of national health reform is declining, according to a new poll by the Kaiser Family Foundation.
"The share of Americans who recognize that the law includes subsidies to help low- and moderate-income Americans without coverage buy insurance fell from 72 percent in December to 58 percent this month," Kaiser said in an announcement of the poll results Monday. "Similarly, the share who are aware that the law expands Medicaid fell from 62 percent in December to 49 percent now. In contrast, familiarity with the individual mandate - the requirement that nearly everyone obtain health coverage, which has been a focus of court cases reported in the press - has remained largely unchanged, with 65 percent saying they are aware of this provision."
Kaiser experts suggested extensive news coverage of debates over the federal debt ceiling might have crowded out stories about health reform. The reform law could return to the news Sept. 13 when the U.S. Census Bureau releases its latest figures about health insurance coverage.
The Colorado Center on Law and Policy expects to issue analysis of those figures shortly after the Census Bureau releases them. Last year's figures showed rising enrollment in the Child Health Plan Plus (CHP+) program, indicating a rising need for help affording health coverage amid fallout from the Great Recession.
What you can do
Schedule a presentation on health reform
The experts on our health team are ready to help community associations and other groups sort out the complexities of health reform. A key issue now is creating the Colorado Health Benefit Exchange, and structuring it in a way that benefits consumers. To schedule a presentation, contact Health Care Program Director Elisabeth Arenales.
Health Law and Policy Update is issued weekly by the health staff of the Colorado Center on Law and Policy. Subscribe by e-mail or read previous editions.
Health Care Director
Elisabeth Arenales
Health Care Attorney
Adela Flores-Brennan
Special Counsel
Ed Kahn
Rice Fellow
Danny Rheiner
Communications Director
Perry Swanson
Released Sept. 2, 2011