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CRS report explores Exchanges

Posted on October 15, 2012 | No Comments

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Key Developments
Implementation Briefs

A report released last week by the Congressional Research Service (CRS) examines the Health Insurance Exchanges under the Affordable Care Act (ACA). The CRS report outlines the required minimum functions of exchanges, and explains how exchanges are expected to be established and administered under ACA. The coverage offered through exchanges is discussed, and the report concludes with a discussion of how exchanges will interact with selected other ACA provisions.

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Under the Affordable Care Act (ACA), many insurers have been creating plans with narrower provider networks. A new report discusses how to use narrow networks as a means to contain costs, but not compromise patient access to care. The report, published by the Urban Institute and The Center on Health Insurance Reforms at Georgetown University, suggests that the appropriate balance between consumer choice and containing costs can be achieved through regulations, transparency, and oversight.
A report issued by McKinsey & Company this month discusses changes in insurance network configurations resulting from the Affordable Care Act (ACA). The report, Hospital networks: Configurations on the exchanges and their impact on premiums, analyzed over 20 cities in both federally-facilitated and state-based marketplaces. McKinsey found that nearly 60% of insurance plans sold on ACA Marketplaces cover fewer hospitals than current insurance plans. Moreover, ACA insurance plans with larger hospital networks charge higher premiums, with the more comprehensive plans costing 26% more than plans offering limited network coverage.
The Congressional Research Service (CRS) published a report analyzing the similarities and differences between Medicaid and insurance plans offered on state insurance Exchanges. Under the Affordable Care Act (ACA), the Medicaid expansion and premium subsidies offered through the Exchanges were intended to work in concert by providing insurance coverage to Americans with the lowest incomes. The Supreme Court ruling rendering Medicaid expansion optional threw a serious wrench in this core goal, leaving millions of Americans who would have received coverage through Medicaid expansion not only ineligible for the program, but also outside of the income bracket to qualify for Exchange subsidies. This report, Comparing Medicaid and Exchanges: Benefits and Costs for Individuals and Families, speaks to the complexities and issues that arise when attempting to compare benefits and costs offered through Medicaid and Exchange plans. Some of the most marked differences addressed include: variation in benefits covered by Medicaid and qualified health plans amongst states, cost-sharing requirements, and coverage issues concerning maintenance of effort and churning.
Oregon is the newest state to release their proposed premium rates for their state-based insurance Exchange. The Oregon Insurance Division posted the requested bronze plan standard plan rate on their website, and are soliciting public comments for the 39 plan options available.
The Centers for Medicare and Medicaid Services (CMS) recently published their "Enrollment Operational Policy and Guidance" concerning Federally-Facilitated Marketplaces (FFM). The guidance, released on October 3rd, stated that enrollments made after October 1st must comply with the provisions in the document. The guidance applies to entities associated with the enrollment process, such as FFM, qualified health plan issuers, and agents and brokers, and describes how these groups are expected to operate in terms of aiding individuals in obtaining health insurance and subsidies. The guidance purports that CMS intends the document to be "living," and the agency will provide consistent updates and clarification on the provisions therein.
In an effort to help consumers circumvent the backlog to access plan information on federally-facilitated Marketplaces (FFM), the US Department of Health and Human Services (HHS) posted a list of 17,000 plans and premium rates that consumers may browse to see what options are available in their states. Plans are broken down by metal tier (platinum, gold, silver, and bronze), plan type (HMO, PPO, etc.), and the state and county in which the plan is offered. HHS has provided plan information for health insurance and stand-alone dental plans in the individual and small group markets.
A compilation of documents released by the Center for Consumer Information and Insurance Oversight (CCIIO) addresses the meaningful difference requirement of qualified health plans (QHP) to be offered on health insurance Exchanges. To promote simplified, informed consumer choice, the Affordable Care Act (ACA) requires QHPs from a single issuer to be meaningfully different from one another. The following documents have been released by CCIIO to expand upon the meaningful difference requirement:
  • QHP FAQ #7 addresses the issue of offering QHPs with the same benefits and cost sharing, but vary only in the network (Q 32).
  • QHP FAQ #9 provides the definition of meaningful difference (Q 26).
  • QHP FAQ #10 discusses the number of QHPs an issuer may submit for a federally-facilitated exchange (FFE) to be approved (Q 20).
  • Instructions for QHP submission contains a chapter discussing suggested formats for justification that issuers may submit as part of the QHP application process, including a specific justification and documentation form.
The White House recently released a memo detailing health plan competition and choices anticipated to be available under the Affordable Care Act's (ACA) health insurance Exchanges. According to the memo, 75% of states with federally-facilitated insurance markets will have at least one new insurance carrier enter their market. The White House memo also reported that 90% of target enrollees will be able to select plans offered by a minimum of five insurance companies. These findings were compared to the current individual insurance market, where two or fewer insurance companies control the market in most states. The memo confirms that state-specific rates will not be released for federally-facilitated Exchanges until September.
The Center for Consumer Information and Insurance Oversight (CCIIO), a division of the Centers for Medicare and Medicaid Services (CMS), recently posted new guidance concerning federally-facilitated and state-based Exchanges (Marketplaces) established under the Affordable Care Act (ACA). The guidance purports that if states do not adhere to and enforce the requisite standards for health insurance issuers in federally-facilitated Exchanges, then CMS intends to coerce enforcement through civil penalties and plan decertification. CMS does not believe that decertification will be a common occurrence. In addition, the guidance stated that qualified health plans (QHP) paired with health savings accounts (HSA) must meet the cost-sharing reduction standards that apply to low income-individuals. CCIIO published additional guidance that expands upon which activities, in both federally-facilitated and state-based Marketplaces, that qualify for grant funding under ACA Section 1311. For instance, state-based Marketplaces are not permitted to use this funding for navigator outreach and education, yet they are allowed to use Section 1311 funds for "in-person assistance programs."
The interaction between Medicaid and Exchanges around eligibility determination issues represents one of the most important and complex aspects of the ACA. An estimated 28 million adults, along with 19 million children, can be expected to transition at least once annually between insurance affordability programs, as Medicaid and premium subsidies are termed under implementing CMS regulations. Collaboration between Medicaid agencies and Exchanges is essential in order to avert unnecessary delays in eligibility determinations and breaks in coverage that in turn can affect not only the affordability of care but access itself, given the link between coverage and health care access through plans’ provider networks...