The Takeaway: Final Obama Era Insurance Rule Makes Incremental Progress But Leaves Many Issues Unresolved
Every year, the Department of Health and Human Services (HHS) issues an update to the rules governing insurance companies and marketplaces. While there were many small adjustments the final update released Monday, the last under President Obama, can most fairly be considered a continuation of past policy rather than one that breaks much new ground.
One notable area of improvement was in the information that insurers have to file with respect to their rates. The new rule requires that additional information be available regardless of whether there is a increase, decrease or no change in proposed rates and makes all information that is not a trade secret available to the public. This improved transparency should support a better understanding of rates overall and will help inform the review process. In addition, HHS stuck by a proposal regarding the creation of standardized plans. However, because the creation of plans that conform to the standard parameters is left to the discretion of insurers, it is not clear how much impact the proposal will have.
The rule also creates some very limited protection for consumers with regard to surprise out-of-network charges. The Centers for Medicare and Medicaid Services had proposed that issuers be required to let out-of-network services conducted in an in-network setting apply to the out-of-pocket maximum unless the issuer had informed the consumers about the charges within 10 days. In the final rule, the scope of this protection was cut back, its effective date was delayed and even the limited protection that remains could be voided by the insurer informing a patient 48 hours before a service was delivered that care could be delivered by an out-of-network provider.
In another disappointment for consumers, HHS backtracked from a proposal to create numeric time and distance standards when judging the adequacy of health plan networks. The proposal was opposed by insurers and also received a lot of pushback from state insurance commissioners who had recently created a model network adequacy statute. In deferring to the commissioners, HHS has left the ball with the states to actually adopt the model act but it is unclear how many states will actually do so. Unless substantial progress is made, HHS will need to put this issue back on the federal to-do list
Oral Argument In Critical Abortion Case Offers Few Clues To Final Outcome
This week, the Supreme Court heard oral arguments in what some have called one of the most consequential cases of this term. The case revolves around whether a Texas law to require clinics that provide abortions to meet the same standards as free-standing surgery centers puts an undue restriction on women’s access to abortion. Justice Kennedy has always been the swing vote in this case and remains so even after the recent death of Justice Scalia, who observers expected to side with the state of Texas. With the four more liberal justices almost certain to oppose the law, a decision by Justice Kennedy that the law creates an undue burden on women would be a victory for proponents of reproductive rights. Without Scalia on the court, the worst that could happen would be a 4-4 split upholding the law. If Kennedy votes to uphold the law the full statute would go into effect in Texas and undermine access for hundreds of thousands of women, but there would be no binding legal precedent that would affect other states.
Health Care And The 2016 Election
At long last we have at least the skeleton of an outline of a health plan from Donald Trump, and it appears far short of “something terrific.” In fact, “horrific” would be a better term. The plan, mostly a recycling of a hodge-podge of conservative reform ideas, would roll back the progress that has been made under the ACA in expanding coverage and improving financial protections (20 million people and counting now have coverage thanks to the ACA). Insurers would once again be able to impose pre-existing condition exclusions and charge people who they judged to be “bad risks” exorbitant premiums that would put the price of coverage out of reach.
The proposal to make health insurance premiums tax deductible and allow tax-free contributions to Health Savings Accounts would offer little benefit to low and moderate income people who don’t have the financial means to make those contributions while providing new tax shelters for the affluent. A Medicaid block grant would lead not only to the elimination of expanded coverage under the ACA, but cause states to eliminate coverage or benefits for children, parents, older adults and people with disabilities who had been eligible prior to the ACA’s passage. (See TANF for a case study in how block grants don’t work). Finally, his commitment to “total repeal” of the ACA would undo some of the important, but less visible, benefits of the law such as the elimination on lifetime benefit caps and improvements in prescription drug coverage for Medicare beneficiaries.
Trump’s proposal stands in stark contrast with the vision laid about by Hillary Clinton, the leading contender for the Democratic nomination. The Clinton plan would build on the ACA, often using executive authority in recognition of the likely continued difficulty in moving legislation through Congress. Her plan does call for some legislative improvements, such as a new tax credit to cover out-of-pocket expenses, but prospects for those types of initiatives seem slim in the near future, at least in the House.
Closing The Coverage Gap: A Lot Of Motion But Not A Lot Of Progress
Another of Clinton’s proposals, with a lot of merit but without great prospects, takes a page from President Obama’s budget and calls for three years of full federal funding for states that extend Medicaid eligibility up to 138 percent of the federal poverty line. The issue continues to roil state legislatures, but so far this year only Louisiana has moved forward. Most recently, the governor of South Dakota announced that he would not push for closing the coverage gap in this legislative session, although the issue could reemerge before the end of the year in a special session. With the looming presidential election creating uncertainty about the future direction of health policy at the federal level (and fueling fear of challenges from the right among sitting legislators) it is not surprising that progress has been slow this year. But depending on what happens at both the federal and state level in November, new opportunities are likely to open up in 2017. Meanwhile in Arkansas, right wing primary challenges to state legislators who supported Medicaid have largely failed. A good omen for the future in that state and others and a good note on which to end.