Dive Brief:
- CMS has created a proposed rule for a "standardized option" for plans at the bronze, silver, and gold levels that would have fixed deductibles, out-of-pocket limits, standard copays and coinsurance for several Essential Health Benefit (EHB) services. Insurers could elect to create a standardized option for sale on the exchange.
- Studies have shown standardization simplified consumers' decisions and improved their overall welfare. It may also be a solution for an emerging trend: The manipulation of benefit designs to discourage enrollment by those with chronic health conditions.
- In addition, studies have shown insurers may discriminate by putting drugs on the highest cost-sharing tiers or excluding certain specialists to treat chronic conditions, according to a Health Affairs blog.
Dive Insight:
After examining standardized versus nonstandardized plans, Douglas Jacobs, author of a Health Affairs blog, wrote the differences "were profound...Plan standardization appeared to eliminate adverse tiering completely. Forty-five plans were examined in total, and none of the 19 standardized plans were categorized as adverse-tiering plans, while six of the 16 nonstandardized plans (23%) were adverse-tiering plans." He noted there was no significant difference in monthly premiums between the standardized and nonstandardized plans.
The author makes several suggestions to the CMS' proposed standardization rule. These include lowering the cost-sharing amount (40%) for the drug specialty tier and to define what constitutes a "specialty" drug. Other cost sharing requirements for the standardized option - including ER visits and outpatient primary care visits - should also be consistent among all standardized options. In addition, the author suggests CMS should set the cost-sharing amounts for all benefits. "It is misleading to shoppers for a plan to be labeled 'standardized' while including numerous nonstandardized elements in each plan," Jacobs wrote.
In conclusion, the blog stated, "If standardized options are effectively promoted, beneficiaries will experience a simplified shopping experience and de-facto nondiscrimination protections; two elements that could make standardization options a valuable policy for consumers and health insurance exchanges alike."