Something as simple as the exact rules for when consumers can and cannot sign up for health coverage could have a big effect on the flow of health claims risk and on what commercial health insurance costs.
Representatives from the National Association of Health Underwriters (NAHU) and the Council of Insurance Agents & Brokers (CIAB) make that argument in separate comment letters submitted in response to draft Patient Protection and Affordable Care Act (PPACA) implementation regulations that the U.S. Department of Health and Human Services (HHS) published in November 2012.
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 Oct. 1. Exchange plans are supposed to offer four “metal levels” of coverage: Platinum, gold, silver and bronze.
PPACA also will prohibit health insurers from considering personal health information when deciding whether to issue coverage to an applicant, and it will put tight limits on use of personal health information when insurers are setting health rates.
Health insurers can charge the oldest insureds 3 times as much as they charge the youngest, and they also can use some premium-based penalties and rewards in connection with wellness and condition management programs, including tobacco cessation programs.
PPACA will require many individuals who fail to have coverage to pay a tax, but health policy specialists say the tax will be so low that it will be much cheaper for many individuals who do not have group coverage to pay the tax rather than buying their own coverage.
Jessica Waltman of NAHU — a group that represents agents and brokers in both the individual and the group markets — covered a wide range of topics, including coverage for consumers with serious health problems, small group rating considerations and the new age rating limits in the NAHU letter.
Ken Crerar of CIAB — a group that focuses on representing producers in the group market — focused mainly on the PPACA guaranteed-issue provisions, or provisions that restrict insurers’ and plans’ efforts to control risk by limiting access to coverage.
Waltman suggested in the NAHU letter that regulators should recognize that they have “inherent discretion” in using PPACA enforcement powers in ways that will help hold down the cost of coverage and keep PPACA from disrupting the individual and small group health insurance markets.
The administration should phase in enforcement of requirements, such as the premium rating rules, over at least three years, especially in states like Delaware and Pennsylvania that now have much different rating rules, Waltman said.
Similarly, states should be able to keep the high-risk pools that now serve consumers with health problems that make buying conventional health coverage difficult open for at least three years, to minimize the possibility that PPACA will disrupt those consumers’ coverage and lead to big fluctuations in claims at commercial health insurers, Waltman said.