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  • Final Rule on ACA Insurance Exchanges Opens the Door for Market Instability, Disruptions in Care

    The US Department of Health and Human Services (HHS) is making good on the Trump administration's promise to relax requirements in the Affordable Care Act (ACA), releasing a set of rule changes—most opposed by APTA—that will alter the way states deal with "essential health benefits" (EHBs) and potentially reduce consumer access to help in choosing an insurance plan in the state marketplaces, among other provisions.

    HHS describes the final rule, issued on April 9, as "intended to advance the Administration's goals for increasing flexibility, improving affordability, strengthening program integrity, empowering consumers, promoting stability, and reducing unnecessary regulatory burdens associated with the [ACA]." APTA and many other health care and consumer organizations see things differently, and in comments mostly ignored by HHS when the proposed rule was released last year, warned that many of the changes will reduce care and disrupt markets.

    At the top of the list of changes opposed by APTA is the HHS decision to move ahead with a loosening of requirements around how states configure their "benchmark" plans—the minimum health insurance requirements for policies offered through a state's insurance exchange. Although HHS backed down from its original 2019 implementation date and made slight alterations from its proposed rule, the overall impact remains: beginning in 2020, states will be allowed to mix and match provisions in their benchmark plans, borrowing parts or entire plans from other states or otherwise selecting “a set of benefits to become its EHB-benchmark plan," primarily through adopting a private insurer's plan provisions that meet certain criteria.

    While the benchmark plans must contain the 10 EHBs required in the ACA (1 of which is rehabilitation and habilitation), the new rule allows states to significantly alter just how those EHBs are handled by adopting other, possibly less-generous, plan elements.

    "The final rule related to benchmark plans is only slightly better than the rule proposed in the fall of 2017, but HHS left some of the most potentially harmful provisions intact," said Kara Gainer, JD, APTA director of regulatory affairs. "Consumers will be left with a confusing, unsteady coverage system that could disrupt their care—practically the opposite scenario from the original intent of the ACA."

    Making matters worse, those disruptions in care could reoccur every year. The new rule also allows states to rearrange coverage provisions in benchmark plans annually. While APTA and other organizations contended that the change would create instability, the Centers for Medicare and Medicaid Services (CMS) argued that "because of the level of effort needed" to make a change, states probably won't attempt to mix things up every year. Plus, CMS added, if a state does decide to make an annual change, "there may be a specific reason…such as for a medical innovation."

    And maintaining consistent coverage through the insurance exchanges isn't the only thing that will become more difficult: it will also be harder for consumers to get help finding out what's available and signing up for a plan. Under the new rule, HHS will do away with certain requirements for "navigator" entities, the organizations that help consumers understand and choose an insurance plan through an exchange. Beginning this year, HHS will reduce the minimum number of navigator entities per exchange from 2 to 1, and will also lift a requirement that 1 navigator per exchange must be a community-focused nonprofit. Also eliminated: a mandate that the navigator entity be physically present in the exchange area it serves.

    APTA argued that "it is misguided for [CMS] to drastically reduce the level of assistance" provided to consumers, and pushed for even more navigator services. In its reply to comments, CMS cast the change as one that provides "increased flexibility."

    Other changes in the rule include giving more power to states to determine network adequacy—albeit with no direction on what constitutes an adequate network review process—and a loosening of requirements for Small Business Health Options Programs (SHOPs) to notify an employer of eligibility to purchase a qualified health plan (QHP) for their employees. Under the new rule, employers such as physical therapists in private practice would be left guessing about eligibility, and if they guessed wrong, purchased a QHP plan, and were later found ineligible, they would face a daunting and potentially costly appeals process. The rule also adds more options for exemptions from the individual mandate for health insurance—a mandate that lost its teeth in December 2017, when Congress approved a tax bill that eliminated the tax penalty for not having coverage.

    A full rundown of all the changes can be found on a fact sheet released by CMS.

    "These changes, all made under the guise of increased flexibility for states, amount to a weakening of the ACA through undermining the individual market and reducing health benefit protections," Gainer said. "APTA has long stated that there are many areas for improvement in the ACA and that we should be having discussions about needed changes. But these changes, no matter how they're characterized by CMS, are a move away from the real improvements consumers need."