By Sara Hansard
The U.S. Chamber of Commerce June 27 called for phasing in health insurance reforms under the Affordable Care Act for existing plans offered by businesses.
Joining the Chamber of Commerce's recommendation was the National Retail Federation, which testified at a June 26 hearing that Congress should delay implementation of the health care reform law.
The Chamber of Commerce's report on ways to ease the impact of implementing ACA on businesses said the law's reforms “will obstruct access to affordable coverage for employees if not carefully and gradually implemented.” Broad specifications of essential health benefits required by the law and “expansive interpretations” of statutory limits on out-of-pocket maximums could deter employer innovations in coverage design and more efficient use of employee care, and they may price plans out of reach for most consumers, it said.
Speaking on a press call, Mark McClellan, director of the Brookings Institution's Engelberg Center for Health Care Reform, who facilitated development of the report, said ACA requirements that should be phased in include community ratings that prohibit plans from charging sick people higher rates; minimum benefit requirements; rate review requirements; and a variety of fees, including a 3.5 percent fee on plans offered in the insurance marketplaces and the assessment for the Patient-Centered Outcomes Research Institute. “There is considerable regulatory discretion to help accomplish this,” but legislation could be adopted if necessary, said McClellan, who was administrator of the Centers for Medicare & Medicaid Services under the administration of President George W. Bush.
The Chamber of Commerce released its 67-page report, Health Care Solutions from America's Business Community: The Path Forward for U.S. Health Reform, on the eve of the one-year anniversary of the U.S. Supreme Court's decision upholding the constitutionality of most of ACA. The Chamber of Commerce opposed the health care reform law during the legislative debate, but McClellan said the mission of the Health Care Solutions Council that developed the report's recommendations was to achieve greater value in health care, more affordable coverage options, and greater access to higher quality, prevention-oriented care through the employer-sponsored health care system that covers millions of Americans.
But those goals “can't be achieved just by expanding coverage,” McClellan said. If there are obstacles to needed reforms in delivery and in promoting better health, it will lead to missed opportunities to improve health and reduce costs, he said.
Among the recommendations in the report were allowing employers to promote better health through wellness programs and changing payments to providers to encourage better care coordination, as well as encouraging adoption of value-based insurance incentives allowing beneficiaries to save when they choose high-value care, McClellan said. The report also highlights the importance of adopting effective health information technology, he said.
In addition, the report called for a “gradual transition toward a competitive choice option in Medicare in which beneficiaries can spend a subsidy on the coverage and care that they prefer, as in Medicare Part D and the insurance exchanges.” It called for avoiding last-minute payment reductions to providers and aligning quality measurements for Medicare and Medicaid.
The online insurance marketplaces that open for enrollment Oct. 1 should be flexible enough to support high-deductible plans and value-based insurance designs, McClellan said. Many small businesses that rely on high-deductible plans that use health savings accounts to help slow cost growth are concerned they will not meet ACA actuarial value and coverage requirements, he said, and adjustments may be needed.
The report reviewed estimates that small business premiums may increase by 20 percent or more in many states, he said. “In some states it appears that the small business exchanges will be very thin in 2014, perhaps with only one or two plans offering coverage.”
It will be very important to track the impact on small business closely, he said. “It would be great to know now if the impact is going to be small or large, and for how many businesses.”
Meanwhile, at a June 26 hearing of the House Energy and Commerce Oversight and Investigations Subcommittee, Neil Trautwein, vice president and employee benefits policy counsel of the National Retail Federation (NRF), which opposed ACA, also called for delaying the law's implementation.
“We fear that as time diminishes between now and January 2014, a cascade of additional last-minute regulations will create added confusion and thus could encourage more employers to back out of coverage,” Trautwein said. ACA's major reforms, including guaranteed issue requirements prohibiting insurers from denying coverage or charging more to people with health problems, take effect in 2014.
A focus at the hearing was on changing the definition of “full-time employee” to 40 hours per week, rather than the 30 hour-a-week definition under ACA. Under the law, employers with at least 50 full-time employees must offer qualifying coverage or pay large fines. “NRF strongly supports efforts to redefine full-time coverage eligibility at 40 hours per week, hopefully with flexibility for employers to define a lower standard, if they so desire,” he said.
ACA rules governing how part-time workers' hours are calculated in computing the number of “full-time equivalent” employees should be reconsidered, subcommittee ranking member Diana DeGette (D-Colo.) said. “I think that's an area we should look at.”
The Chamber of Commerce's report is at http://www.uschamber.com/reports/health-care-solutions.
Information on the House Energy and Commerce subcommittee hearing is at http://energycommerce.house.gov/hearing/challenges-facing-americas-businesses-under-patient-protection-and-affordable-care-act.