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By Sara Hansard
Some states are likely to be interested in altering required Obamacare health plan benefits to get premiums down, but they’re limited in what they can do.
Beginning in 2019, states could annually set benchmark essential health benefits that health plans are required to cover under the Affordable Care Act by basing them on coverage available in other states under the Department of Health and Human Services’ Notice of Benefit and Payment Parameters for 2019 proposed rule (RIN:0938-AT12). “There will be some interest in states to think about the essential health benefits, and what products can be marketed in their states at lower costs,” which could attract more young people, Trish Riley, executive director of the National Academy for State Health Policy, told Bloomberg BNA Nov. 6. But the ACA’s requirements that plans cover at least 60 percent of medical claims would limit what states could do, she said.
The proposed payment notice, which was published Nov. 2 and covers major ACA exchange rules, is the Trump administration’s first major effort to push more power back to states. ACA proponents fear the administration may weaken major consumer protections in the law, but some who follow the law closely say the impact of the proposal is likely to be limited because of the ACA’s statutory requirements. Comments are due Nov. 27.
Wisconsin is considering filing a waiver under Section 1332 of the ACA, and it could consider making changes to its essential health benefits package in that context, Wisconsin Deputy Insurance Commissioner J.P. Wieske told Bloomberg Law Nov. 3. “It’s certainly worth looking at,” Wieske said.
Under Section 1332, states can apply for approval from the HHS to make major changes to the ACA as long as the health coverage provided is as comprehensive and affordable as what would be provided without the waiver, the coverage is provided to a comparable number of residents of the state, and the federal deficit isn’t increased.
But changes to essential health benefits could be a problem for consumers, Wieske said. “Our market is just a little bit different than some other states.”
The Obama administration gave states options for selecting benchmark plans on which the essential health benefits were based. Most states, including Wisconsin, chose the largest small group plan offered in their state, according to the Kaiser Family Foundation. Wisconsin “had pretty robust coverage in its small group market,” and its essential health benefits benchmark reflects that, Wieske said.
Oklahoma and Iowa recently withdrew applications for 1332 waivers when the HHS didn’t act on them in time for the 2018 open enrollment period for the ACA exchanges. Open enrollment is taking place from Nov. 1 through Dec. 15.
“We were prepared at one time to consider many of the changes that are being identified” in the 2019 payment notice, Mike Rhoads, deputy commissioner of life and health in Oklahoma’s Insurance Department, told Bloomberg Law Nov. 6. The state’s proposal would have reduced premiums by an estimated 30 percent, but it wouldn’t have changed the essential health benefits benchmark dramatically, he said.
Instead, Oklahoma had asked for permission to set up a reinsurance program to cover enrollees with high claims costs, and it would have created a system to hit state targets to improve the quality of care, Rhoads said.
Oklahoma may resubmit a 1332 waiver, and state officials are studying the 2019 payment notice proposal, Rhoads said. “We’re kind of regrouping,” he said. “I don’t think they did the right thing” by not acting on the waiver. “Now we have to determine what to do.”
Under Iowa’s withdrawn 1332 waiver request, all essential health benefits remained the same, Iowa Insurance Division spokesman Chance McElhaney told Bloomberg Law in an email Nov. 6.
The ACA created 10 categories of essential health benefits, including emergency care, prescription drugs, preventive care, maternity care, mental health, and substance abuse treatment.
“You’re going to have states that could potentially use this to slim down their benefits,” Chris Sloan, a senior manager at health policy consulting firm Avalere Health, told Bloomberg Law Nov. 3. However, “there’s not a ton of difference between benchmark plans to begin with,” he said.
Prescription drugs may be the most likely category to undergo changes in benefits, Sloan said. But there are minimum limits for drugs that plans must cover, and that wouldn’t be changed under the proposal, he said.
Under the proposed payment notice, about 10 states a year would change their essential health benefits benchmark plan, according to Timothy Jost, a retired law professor who writes a blog for the journal Health Affairs.
In addition to allowing states to choose benchmark plans from other states, the proposed 2019 payment notice would allow states to create their own benchmark plans, provided that the plans aren’t more generous than a set of “comparison plans.” The comparison plans would be the state’s 2017 benchmark plan.
The proposal would create “a lot more flexibility,” Carl Schmid, deputy executive director of the AIDS Institute, told Bloomberg BNA Nov. 6. “But it also says it [the benchmark plan] can’t be more generous. This is fewer benefits for patients. That’s obviously something we don’t like.” The AIDS Institute advocates for policies to provide funds for prevention and treatment for patients with HIV infection and AIDS.
The proposed payment notice could change the definition of a typical employer plan, which is the standard on which essential health benefits are based, Schmid said.
Under the proposal, a national benchmark plan could be proposed in the future, Schmid said. The Obama administration had considered creating a national plan, but instead it created a system based on state choices.
Creating a national standard for drug benefits could be problematic, Schmid said. “We don’t know what that means. Given this administration, they are all about limiting benefits. We would be very concerned about that.”
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