Filed Under:Health Insurance, Individual Health

Consumer groups: Give PPACA regs teeth

What if insurers or employers simply ignore the PPACA rules?
What if insurers or employers simply ignore the PPACA rules?

Two high-profile consumer advocacy groups agree that the U.S. Department of Health and Human Services (HHS) should think carefully about federal health law enforcement mechanisms.

The groups are taking different positions in other areas, such as the price rules for consumers who use tobacco.

The groups -- Families USA and the Georgetown University Center for Children and Families -- have discussed their views in comments on a batch of proposed "PPACA: Health Insurance Market Rules; Rate Review" (CMS-9972-P) regulations that HHS published in November.

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. The coverage would start taking effect in 2014.  

PPACA also is imposing many other new requirements, such as a requirement that each exchange plan offer a standardized essential health benefits (EHB) package; a ban on use of personal health information in decisions on whether to issue coverage; a ban on use of personal health information other than age in most decisions on how to price coverage, outside of wellness and condition management programs; and bans on annual and lifetime benefits limits.

The Georgetown center is recommending in its comment letter that the final version of the regulations be "much stronger in outlining the steps that will be taken to ensure proper and fair enforcement of the market reforms."

HHS should advise states that, if a state is unwilling or unable to substantially enforce the PPACA consumer provisions, the federal government will enforce the provisions, the Georgetown center said.

When HHS is deciding whether a state is enforcing the consumer rules, it should consider whether a state has adopted the legislation needed to implement the rules and whether the state is actually enforcing the rules, the center said.

"As evidence of enforcement, HHS, for example, could evaluate whether a state is actively monitoring issuers' behavior in the marketplace; conducting rate and form review, and tracking and responding to consumer complaints," the center said. "In the absence of appropriate enforcement, there is a risk that the insurance reforms will prove illusory."

Cheryl Fish-Parcham wrote in the Families USA comment letter that her group wants to see HHS make states the primary enforcer of the rules, but to make it clear that HHS can step in if a state fails to enforce the rules.

"Having a clear line of authority will help to bring about timely resolution of problems," Fish-Parcham said. "HHS and states should establish ongoing tools for monitoring abuse, including well-publicized contact information for where consumers can report problems and the establishment of inter-agency work groups (including regulators and attorneys general) that will monitor problems and share information about both types of abuse and about specific abusive marketing schemes across states."

HHS also should give issuers, state regulators, and the public guidance about what constitutes a discriminatory marketing practice or benefit design, monitor and enforce anti-discrimination provisions, and come up with tools that state and federal regulators can use to identify prohibited benefit designs and marketing practices, Fish-Parcham said.

HHS and states should be prepared to update their methods if consumers and their advocates see new sorts of problems, Fish-Parcham said.

But the Georgetown center appears to be more accepting of the idea of letting carriers penalize tobacco users than Families USA is.

The Georgetown center appears to be somewhat more accepting of the general idea of using a tobacco use premium penalty to persuade adult consumers to stop smoking.

The main goal for revising the tobacco use penalty rules would be to make sure the definition of tobacco "use" is clear and that consumers understand it, the center said in its comment letter.

But exchanges "should be required to rely on self-reporting when identifying tobacco users," the center said. "Other methods, such as blood or saliva tests, are intrusive and often inaccurate. "

The center recommended excluding children from tobacco use premium penalty programs.

"We see significant practical problems arising if parents are expected to report on their children’s tobacco usage," the center said. "In many instances, parents will be unaware of their children’s usage, particularly given that it remains illegal for children under age 18 to purchase tobacco products.  The prospect of causing their families to face higher insurance premiums may even encourage children to hide smoking from their parents, making it harder for them to combat the smoking."

Fish-Parcham of Families USA urged HHS to put tight restrictions on any tobacco use penalty programs.

"We are concerned that any ambiguity in the definition of tobacco use could result in disputes or even a loss of coverage for consumers that misunderstood the question or the consequence of an incorrect answer," Fish-Parcham said. "Thus, we recommend that screening for tobacco use should be limited to once a year, at the time of application or renewal."

An insurer should ask only about daily use over the last 30 days, Fish-Parcham said.

"The final rule should also clarify that a misstatement by an applicant or enrollee regarding tobacco use is not grounds for the issuer to rescind coverage and that if there has been a misrepresentation, the insurer can only collect the tobacco surcharge that should have been paid during the relevant coverage year," Fish-Parcham said.

Fish-Parcham said Families USA worries that tobacco rating could hurt lower-income families more than higher-income families.

"As we understand it, a lower income individual who smokes and receives premium credits in the exchange could still be charged an additional 50 percent of the full age-rated premium for an individual – which may be far beyond the index of affordability contained in the statute," Fish-Parcham said. "Unless there is some way for these households to avoid the tobacco rate-up, this is likely to cause many tobacco users to remain uninsured – which further impairs their access to cessation treatments."

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