Obama administration officials want to limit use of short-term health insurance in the United States to periods of three months or less.
Officials are also thinking about the possibility of banning the sale of critical illness policies and other policies that cover two or more specific diseases.
The so-called “tri agency” team — the Internal Revenue Service, the Employee Benefits Security Administration and the U.S. Department of Health and Human Services — has included those proposals in a new batch of draft regulations.
The agencies developed the draft regulations to implement the Expatriate Health Coverage Clarification Act of 2014, and to adjust the requirements for health insurance products other than major medical coverage.
The three agencies are preparing to publish the regulations in the Federal Register Friday. Members of the public can send in comments up until 60 days after the official publication date.
The Centers for Medicare & Medicaid Services (CMS), part of HHS, announced the release of the draft in a statement about what HHS doing to help the Patient Protection and Affordable Care Act public exchange system.
CMS said it and HHS want to:
Improve the PPACA risk-adjustment program, which is used to use cash from health plans with low-risk enrollees to compensate competitors that end up with high-risk enrollees. CMS wants to create an adjustment mechanism for part-year enrollees and let plans include enrollees’ prescription information when calculating health risk scores, according to a new batch of risk-adjustment program guidance.
Forge ahead with previously announced efforts to increase documentation requirements for consumers who seek coverage outside the usual open enrollment period window. Officials say they hope getting tough on special enrollment period applicants will keep healthy people from waiting until they get sick to pay for health insurance.
Limit use of products that some consumers might see as an alternative to buying major medical coverage. The three agencies described the limits in the draft regulations.
For more details about what the tri agencies said about health insurance products other than major medical insurance in the draft regulations, read on:
Issuers of health care coverage for Americans who live outside of the United States would have to maintain call centers in three or more countries and process at least $1 million in claims a year in foreign currency equivalents. (Photo: iStock)
The three agencies want to distinguish travel insurance that happens to cover travel-related health problems from “expatriate health plans,” or coverage aimed at U.S. citizens or U.S. residents who live outside of the United States on a long-term basis, according to the introduction to the draft regulations.
The three agencies want to require an issuer of expat coverage to be a substantial issuer of expat coverage. An issuer would, for example, have to maintain call centers in three or more countries, accept calls from customers in eight or more languages, and process at least $1 million in claims per year in foreign currency equivalents.
An expat plan would be exempt from some requirements that apply to ordinary major medical plans. In the United States, individuals usually need to show they have “minimum essential coverage” to escape from the penalty PPACA imposes on the uninsured, or underinsured. A minimum essential coverage plan cannot impose lifetime or annual limits on the amount of medical benefits a patient can get.
The tri agencies say they would exempt expat plans from some of the PPACA requirements that apply to minimum essential coverage, such as the ban on annual and lifetime benefits limits. But, to qualify as minimum essential coverage, an expat plan would have to cover inpatient services, outpatient facility services, physician services and emergency services.
An employer that sponsored a group health expat plan, and wanted to get credit for offering minimum essential coverage, would have to “reasonably believe” that the expat plan met the usual minimum essential coverage minimum value standards.
Critical illness insurance
PPACA exempts indemnity insurance from the PPACA major medical requirements.
The tri agencies have given their blessing in the past to indemnity products that pay a set, time-based benefit. The agencies have said, for example, that an insurer can pay $100 per day to a policyholder who enters the hospital. Insurers have asked the agencies to allow the sale of traditional supplemental policies that pay benefits to consumers who have certain kinds of conditions or get certain kinds of medical service.
The tri agencies say they are not sure whether a policy that covers multiple specified diseases or illnesses should qualify for excepted benefits status.
The agencies ”are concerned that individuals who purchase a specified disease policy covering multiple diseases or illnesses (including policies that cover one overarching medical condition such as ‘mental illness’ as opposed to a specific condition such as depression) may incorrectly believe they are purchasing comprehensive medical coverage when, in fact, these polices may not include many of the important consumer protections,” officials say.
The tri agencies “solicit comments on this issue and on whether, if such policies are permitted to be considered excepted benefits, protections are needed to ensure such policies are not mistaken for comprehensive medical coverage,” officials say.