The U.S. Department of Health and Human Services (HHS) has decided that Puerto Rico and other U.S. territories should be exempt from many major Patient Protection and Affordable Care Act (PPACA) provisions.
Marilyn Tavenner, the administrator of the Centers for Medicare & Medicaid Services (CMS), announced the shift in letters sent to the insurance commissioners in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands. She told the commissioners that the change applies to the parts of PPACA that added commercial health insurance requirements to the Public Health Services Act.
Many of those PPACA provisions took effect Jan. 1, 2014. They include:
- The guaranteed availability rules, which require insurers to sell coverage without taking personal health information into account.
- The community rating rules, which require insurers to base individual and small-group coverage prices mostly on community claim costs and an individual’s age.
- The essential health benefits package rules.
- The rate review system rules.
- The minimum medical loss ratio (MLR) rules, which require insurers to spend 85 percent of large-group premiums and 80 percent of individual and small-group premiums on health care and quality improvement efforts.
Many observers believed that those PPACA provisions might apply to the territories, but PPACA did not provide much exchange funding for the territories, and it provided only a modest amount of funding for expanding the territories’ Medicaid programs.
The territories decided against trying to start PPACA exchanges. HHS — the parent of CMS — recognizes that the combination of a lack of an exchange program and the tough new PPACA underwriting and pricing rules has undermined the stability of the territories’ health insurance markets, Tavenner says.