Featured Health Business Daily Story, Nov. 19, 2012
Reprinted from AIS's HEALTH REFORM WEEK, the nation’s leading publication on the business implications of the massive changes for the health industry mandated by reform.
States and health insurance stakeholders have been clamoring for additional guidance and rule-making from CMS as they prepare to comply with major provisions of the Affordable Care Act (ACA). With President Obama now having won re-election, health reform observers queried by HRW say that the long-awaited documents soon will be released. In fact, on Oct. 8, the White House Office of Management and Budget (OMB) website said it had just received proposed rules on essential health benefits (EHBs) in regard to actuarial value, quality and accreditation and on health insurance market rules in relation to the ACA.
The observers say the guidance documents and rules released first will focus on several important topics related to health insurance exchanges. They include EHBs, operation of federally facilitated exchanges; determining the actuarial value of plans offered on the exchange by their “metal” classification (e.g., bronze); determining premium subsidies; whether states can partially expand Medicaid, such as just to residents with annual incomes up to 100% of the federal poverty level; and risk adjustment, reinsurance and risk corridors.
State officials have long complained that an inadequate amount of guidance has hindered their efforts to prepare for the exchanges. For example, although states were supposed to notify HHS by Oct. 1 of their selection of an EHB benchmark plan for their exchange, as of Oct. 11 barely half of the states had done so (HRW 10/15/12, p. 3).
“I think it is no secret that [federal agencies] have held back on releasing key regulations so as to not complicate the president’s re-election campaign,” David Merritt, managing director in the Washington, D.C., office of Leavitt Partners LLC, tells HRW. Leavitt principal Mike Leavitt, a former Utah governor, was a key health care adviser to Republican nominee Mitt Romney’s presidential campaign.
Merritt says he expects a “torrent” of rules to come out very quickly as stakeholders will need to rush to have exchanges certified by the Oct. 1, 2013, deadline. However, he is concerned that the delay in getting them out has “short-circuited the time for insurance companies to actually price products and [fully] develop products to go through the exchange,” complicating preparations for them.
“I think we can expect in the days and weeks ahead we’re going to see a lot more rulemaking from the feds to insurance companies and the states in order to get the law fully implemented,” says Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. She adds that the IRS also needs to put out additional guidance in some areas, including how the penalty on the individual mandate to purchase health insurance will be enforced.
Tim Jost, a Washington and Lee University law professor who is a consumer representative to NAIC, agrees that it is critically important for guidance documents and final rules to be released as soon as possible given that states must decide by Nov. 16 whether they will operate their own exchange, partner with the federal government or have the federal government operate the exchanges completely.
“Insurers need federal rules right now on…how the guaranteed issue and renewal, pre-existing condition exclusions, and age and geographic rating are supposed to work, for example,” he wrote in a blog entry for Health Affairs Nov. 7. “Insurers also need more information about how the reinsurance, risk-adjustment, and risk-corridor payment programs are going to work, as this will affect their marketing and pricing strategies. They need to know how medical loss ratios will be calculated, and whether their reserve and surplus requirements will change.”
One of the downsides of releasing so many guidance documents and rules in a short period of time is that the amount of time to comment on them could be curtailed, according to Bonnie Washington, senior vice president and leader of the health reform practice at consulting firm Avalere Health LLC, and formerly head of CMS’s Office of Legislation.
“There are a dozen-plus issues which states and health plans really need guidance for,” she tells HRW. “We’re going to see a flood of them between now and Thanksgiving…[but] probably a lot of [them] will have a much shorter time frame to comment.”
Federal law requires that proposed rules must be released for comment for at least 30 days, and all comments must be reviewed before a final rule is published. And Jost adds that some of those rules may have to go through OMB.
© 2012 by Atlantic Information Services, Inc. All Rights Reserved.
Get all the details from experienced observers as states finalize decisions on essential health benefits, IT systems, qualified health plan selection and other key issues. Register for The Impact of November Elections on Insurance Exchanges: What Health Plans, Providers and Brokers Need to Know About the Second Obama Administration.
Check out all of the benefits, sample issues & more!