State insurance commissioners typically bear most of the responsibility for enforcing health insurance consumer protections. In theory, that will remain the case after broad new consumer protections included in the Affordable Care Act (ACA) go into effect. States are expected to be the first-line of enforcement, and the federal Department of Health and Human Services (HHS) will step in if it finds states are not doing the job. So far, few state legislatures have enacted laws changing health insurance market rules to conform with the ACA’s dramatically new policies for health insurance sales, coverage, benefits, and premiums. And only one state has passed laws or issued regulations to sync up state-level requirements with Obamacare.
Overview of ACA Consumer Protections
The ACA consumer protections apply not only to Qualified Health Plans (QHP) on the Health Insurance Exchanges (HIX), but to all health insurers. The protections are intended to promote access to care, quality, and cost containment.
The most significant of the new rules are:
- Ban on denying coverage because of pre-existing conditions
- Requirement to insure anyone who applies for health coverage
- Elimination of pre-coverage waiting periods of more than 90 days
- Limits on the premiums health plans may charge: must charge same premiums for healthy and unhealthy individuals, must charge men and women the same, cannot charge older adults more than three times the amount of a young person’s premium, cannot charge tobacco users more than 1.5 times the premium rate of non-users
- Coverage of the Essential Health Benefits (EHB), a list of federally mandated services composed of 10 types of services such as prescription drugs, hospital services, preventive or wellness services, and chronic disease management
- Actuarial value requirements, which forces health insurance policies to cover at least 60 percent of health costs and spending
- Limits the amount of out-of-pocket costs a consumer must pay, such as deductibles and copayments
Few States Have Laws to Enforce ACA Consumer Protections
The Commonwealth Fund recently surveyed states to learn which had enough legal authority to enforce the major health reform consumer protections, listed above. Most state legislatures have not yet given regulators explicit authority to enforce the new ACA-based rules. As a result, it is unclear whether or how states will address consumer complaints or correct health plans that do not follow the ACA rules.
The recent brief found:
- Only one state, Connecticut, has either passed laws or issued regulations to cover all of the major ACA consumer protections
- 10 other states and the District of Columbia have taken action to cover at least one consumer protection, in some cases because existing law already addressed certain health reform requirements
- The most common issues for states to act upon were Essential Health Benefits and actuarial value
- 39 states have not taken steps to ensure state laws allow regulators to enforce ACA provisions
The report also comes with a neat interactive feature to explore the findings, see here.
Several states, the brief notes, are in the middle of working on enforcement legislation. Some of them might have delayed action until after the Supreme Court’s decision in NFIB v. Sebelius, which upheld most of the health reform law but gave states a choice of whether to expand Medicaid. Other states might have wanted to wait to see whether President Barack Obama would be reelected.
CMS Draft Regulations on Consumer Protections
The Centers for Medicare and Medicaid Services (CMS) is taking the lead in drafting most of the ACA regulations. In late 2012, CMS issued draft regulations related to essential health benefits and actuarial value, insurance market reforms, and wellness programs.
The federal Office of Personnel Management (OPM) also released draft rules for the Multi-State Plan Program (MSPP), which covers health plans offered on Health Insurance Exchanges in more than one state.