Dive Brief:
-
With the Trump administration and other Republicans encouraging more non-Affordable Care Act-compliant health plans, state regulators may play a critical role in upholding minimal federal standards and can protect consumers from healthcare fraud, scams, insolvency and financial loss, according to a new report attorney Christina Lechner Goe prepared for the National Association of Insurance Commissioners (NAIC).
-
Still, removing consumer protections and allowing payers to sell policies across state lines may lead to more out-of-network care, further imbalance the ACA plan risk pool and increase member premiums for individual plans.
-
The new report highlighted potential issues associated with association health plans (AHPs), short-term catastrophic plans, healthcare sharing ministries and other non-compliant products.
Dive Insight:
Advocates for non-ACA-compliant options have promoted them as ways for people to get cheaper health insurance. ACA advocates argue that the plans are a shadow of ACA-compliant plans and don’t offer adequate consumer protections.
One popular conservative healthcare proposal is to allow payers to sell plans across state lines. Opponents of that idea say it limits state regulators' oversight, according to the report.
For instance, the Trump administration could allow AHPs, which are made up of employers and individuals, to be sold across multiple geographic areas. Doing so would limit state oversight of those plans. The NAIC is concerned that allowing payers to sell across state lines would lead to insurance companies choosing states with the fewest regulations and oversight to set up plans.
The new report argued that allowing interstate sales would actually reduce consumer options. Payers would cherry pick the healthier and lower risks in the market. In turn, ACA-compliant health plans would wind up with sicker risk pools and higher premiums.
“Evidence suggests that such proposals do not work: in states that have already pursued across state lines legislation or tried to form interstate compacts, none resulted in a single insurer entering a new market or the sale of a single new insurance product,” Goe wrote.
There’s also the issue of provider networks. Out-of-state payers have difficulty negotiating with local healthcare providers. AHPs won’t increase people’s market power, won’t lower premiums and may increase out-of-network care, according to the report.
Having fewer in-network providers would also exacerbate problems with balance billing, which can occur when patients visit out-of-network providers without realizing they are out-of-network.
“An insufficient network, without contracted providers who are obligated to hold consumers harmless from balance billing, will severely reduce the value of the coverage and consumers will not discover this until they have claims. If the AHP purchases access to a sufficient, approved network, the cost of their product will rise significantly. State regulators will not be able to review networks of out-of-state AHPs,” she wrote.