Dive Brief:
- A recent analysis by Avalere concludes the federal proposal for 2017 benefit designs could result in higher coverage for some services and drugs, as well as lower out-of-pocket costs.
- The prediction is based on the concept of standardizing benefit designs so cost-sharing features--including deductibles and all out-of-pocket limits--will be the same for all plans at each of the bronze, silver, and gold metal levels.
- While the designs would be optional for issuers, the government is "strongly encouraging" them to offer at least one standard silver plan, Avalere says.
Dive Insight:
The proposal is notable for two main reasons.
For one, these plans would diverge from most other ACA plan structures by providing "first-dollar coverage" for doctor visits and for all tiers of prescription drugs in silver and gold plans, Avalere notes. This means consumers and issuers would immediately share costs, rather than consumers bearing all costs until meeting a deductible. While that could result in lower costs for customers, that could in turn lead to higher utilization and higher premiums, Avalere says.
The second point is standardization is being rejected by major voices in the industry due to the constraints it places on benefit design and evolution.
“We oppose this type of standardized benefit,” Clare Krusing, spokesperson for America’s Health Insurance Plans, told Kaiser Health News. “If consumers only see a one-size-fits-all product, how is that providing them with the tailored coverage they want and need?”
The Blue Cross Blue Shield Association also called attention to the issue in its Dec. 21, 2015, comment letter to CMS Acting Administrator Andy Slavitt, in which it argued instead of standardizing plans, CMS should "promote plan innovation, choice, and competition."