Federal regulators should give states and health insurers enough flexibility to keep new Patient Protection and Affordable Care Act (PPACA) rules from pushing up costs or disrupting the market in other ways, health insurers say.
Daniel Durham and Gregory Gierer, executives at the health insurers' biggest trade group, America's Health Insurance Plans (AHIP), have made that case in a collection of comments made in response to PPACA regulatory proposals and notices recently issued by the U.S. Department of Health and Human Services (HHS).
HHS released a series of major documents, such as draft PPACA health insurance market rule and rate review regulations, in November, and in some cases gave commenters just 30 days to respond.
PPACA calls for HHS and other federal and state agencies to set up a national health exchange system by Oct. 1, and to implement many national health insurance rules, such as new restrictions on use of personal health information in insurance underwriting, by Jan. 1, 2014.
PPACA also calls for non-grandfathered major medical plans to offer a standardized "essential health benefits" (EHB) package, and for regulators to set up risk-adjustment programs to keep the PPACA changes from causing consumers with expensive health problems to capsize certain health plans, or certain types of plans.
"We are aware that [HHS] is operating within tight timeframes to finalize these regulations," the AHIP executives wrote in one AHIP comment letter, on an HHS "benefit and payment parameters" notice.
AHIP expects to continue to work with HHS officials as they go about preparing for 2014, the AHIP executives said.
In the comment letter on the benefit and payment parameters notice, the AHIP executives urged HHS officials to carefully consider how the proposed regulations might interact with statutory provisions to add to the cost of coverage.
"For example, the new $100 billion health insurance tax will add $5,080 over ten years to the cost of a family’s premium in the individual market," the AHIP executives said.
The EHB package requirement may make coverage more comprehensive for some, but it also could increase the cost of coverage for many, the executives said.
Still another provision, which limits the ratio of the cost that the oldest enrollees pay for health coverage to the cost that the youngest enrollees pay, could cut costs for older consumers but increase costs for younger consumers, the executives warned.
"Unless coverage is affordable, younger and healthier people may choose to forgo purchasing insurance until they are sick or injured," the executives said. "If that happens, costs will increase for everyone. This is why it is crucial that more flexibility be provided in the regulations to help ensure broad participation in the system and help mitigate disruption for consumers."
In the same comment letter, the AHIP executives cited an HHS proposal on broker compensation as an example of a provision that could involve complicated questions about how PPACA and exchanges will really work.
HHS officials have recommended that regulators limit the likelihood that broker preferences will end up causing high-risk consumers to flock to exchange plans or non-exchange plans, or to do without coverage altogether, by setting broker compensation rules.
The proposed rules would require that an insurer pay broker commissions for plans sold within an exchange for individuals or an exchange for small businesses that are similar to the commissions the insurer would pay brokers for selling "similar health plans" outside of the exchange system.
"We support a level playing field between the inside exchange market and the outside market including approaches to broker compensation that do not have the intent of favoring either the exchange or the outside market," the AHIP executives said.
But brokers could end up playing a different role in the exchange system and outside the exchange system, and brokers might play a much different role in the exchange programs for small groups, the executives said.
The role of brokers in the small group exchange system could change over time as the market continues to evolve after 2014, the executives added.
"Therefore, any requirements related to broker compensation need to allow for flexibility to adapt to these considerations, and accommodate the fixed costs already being required," the executives said.