Regulation decisions that seem minor could lead to major Patient Protection and Affordable Care Act (PPACA) compliance headaches.
Megan Grover Howell, a policy specialist at Group Health Cooperative, talked about one of those decisions — on how groups should administer coverage billing — in her company’s response to a major batch of PPACA regulation proposals that the Centers for Medicare & Medicaid Services (CMS) published in November.
Howell noted that CMS, an arm of the U.S. Department of Health and Human Services (HHS), has proposed having employers pay for health coverage using the kind of employee-by-employee, list billing approach that worksite insurance programs often employ, rather than the traditional group plan approach.
“If a list billing structure is implemented as the proposed rule suggests, group premiums, and employer contributions, can fluctuate throughout the year, making the process of maintaining health coverage for a small group overly complex,” Howell wrote. “Many small employers do not have the robust human resource department required to manage such fluctuation.”
Shifting to mandatory list billing — and having each worker pay a separate, age-based rate, rather than a composite group rate — could hurt older workers, Howell added.
“An employer contribution may be less for an older employee than for a younger one,” Howell said. “The result may be that coverage offered through small group health plans will become unaffordable for many older employees, causing a migration of older employees to the health insurance exchanges where they will be eligible for federal tax credits.”
Howell is one of hundreds of commenters who responded to the proposed regulations that were published under the heading ”PPACA: Health Insurance Market Rules; Rate Review” (CMS-9972-P) in November.
At press time, CMS had posted 289 of the 465 letters it had received in response to the market and rate review rule proposal packet.
Scores of commenters said Marilyn Tavenner, the acting CMS administrator, and other CMS officials should have given members of the public more time to go over the proposed regulations.
Many other commenters talked about how they think CMS should apply PPACA to the student health insurance market.
Commenters from organizations such as the American Academy of Actuaries, the New York Health Benefit Exchange and the Wisconsin Association of Health Plans joined Group Health Cooperative in providing specific questions about what the regulations mean or detailed suggestions for ways to handle risk outside the student health insurance market.
Health policy watchers are hoping to reduce the risk that PPACA will cause the sickest consumers to flock to certain health plans, or certain types of plans, and capsize those plans.
Commenters also talked about ways to help people with serious health problems who now get coverage from state risk pool programs move into ordinary individual health insurance policies once PPACA underwriting rules take full effect.
PPACA and the CMS-9972-P regulations
PPACA opponents are still trying to block implementation of PPACA.
If PPACA takes effect on schedule and works as drafters expect, it will give individuals and small groups the ability to buy coverage through new exchanges, or Web-based insurance supermarkets, by late 2013. The coverage would start taking effect in 2014.
PPACA also is imposing many other new requirements, such as requirements that each exchange plan offer a standardized “essential health benefits” (EHB) package, and that each exchange plan cover enough of the actuarial value of the EHB package to fit in one of four actuarial value “metal levels” – platinum, gold, silver or bronze.
PPACA will not let health insurers take an individual’s health problems into account when deciding whether to issue coverage or to set rates — unless the insurers are using certain types of health information in wellness programs. But insurers can charge the oldest insureds up to 3 times as much as they charge the youngest insureds, and the proposed regulations would set the rules for that “age banding” process.
CMS posted the health insurance market and rate review regulation drafts around the same it was unveiling a test version of an actuarial value calculator and proposing regulations to implement PPACA EHB provisions and PPACA group health plan wellness provisions.