Empowering patient voices through voter registration
While roughly 83% of adults in the United States will visit a health care provider in the next year, an estimated
News
12/7/12 Affordable Care Act Update
December 7, 2012
Policy Update
On November 30, the US Office of Personnel Management (OPM) published a draft rule that proposes standards for the Multi-State Plan Program (MSPP). The Affordable Care Act (ACA) directs OPM to enter into contracts with private health insurance issuers so that at least two multi-state plans are offered in the new health insurance exchanges beginning in 2014. At least one of the insurers must be a non-profit entity. Insurers who wish to participate in the MSPP will be certified and overseen by OPM, rather than the state or federal exchanges.
The intent of the ACA is to make more health plans available to consumers and to increase competition, particularly in states where there are currently fewer choices. ACS CAN and other patient and consumer groups have been advocating for multi-state plans that operate on essentially the same basis as other plans in a state to ensure a level playing field. The proposed rule reflects this approach and overall is a good rule. ACS CAN will be working with other consumer groups to prepare comments.
Also on November 30, the Department of Health and Human Services released a proposed rule that expands upon standards set in previous rules, and provides further information related to policies such as risk adjustment, reinsurance and risk corridors programs, advance payments of the premium tax credit, and cost-sharing reductions. Although the proposal is very technical, the matters addressed are critical to stabilizing prices and ensuring policies like the ban on pre-existing conditions and guaranteed issue are viable. The regulation also elaborates on how premium subsidies will be calculated and user fees for the federal exchange are assessed. ACS CAN is working with other consumer groups to consider comments.
State Update
This week, Avalere Health released a new study showing that basic prescription drug coverage could vary greatly from state to state based on each state's choice of a benchmark plan to define essential health benefits. States that did not designate a benchmark plan defaulted to the benefits level of the largest small-group plan in the state.
While all patients will have access to essential medications, the study found that some states will require coverage of almost all Food and Drug Administration-approved drugs, while others will provide coverage for about half those drugs. The study is based on data released by HHS on November 20 regarding state-selected benchmark plans. It appears that Alaska, Arizona, Connecticut, Delaware, Idaho, Kansas, Nebraska, New Hampshire, Maine, Vermont, Virginia and West Virginia will have the most generous coverage, while California, Colorado, Iowa, Maryland, Michigan, Minnesota, New Mexico, North Carolina, North Dakota, South Dakota, Utah and Wisconsin will be the most limited. Attached is a map with Avelere's rankings for every state except for Pennsylvania, where a data error occurred.
Avalere Benchmark Formulary MAP OF STATE Rx PROGRAMS in EXCHANGE.pdf
Medical Loss Ratio Yields $1.5 Billion in Rebates and Savings
The Commonwealth Fund reports that consumers saw nearly $1.5 billion in health insurer rebates and overhead cost savings in 2011 due to the ACA's medical loss ratio (MLR) provision. The MLR is a calculation health insurance companies must use to demonstrate what proportion of premiums they spend on providing health care to patients, as opposed to salaries and other administrative expenses. Insurers that fall short of the target are required to rebate the difference to policy holders.
The study examined how insurers in the individual, small-employer, and large-employer group markets in every state responded to the MLR rule between 2010, the year before it took effect, and 2011. The results showed that insurers reduced administrative costs in every market, with the majority of savings going toward the large-group market. In the individual market, savings were passed on to consumers. But the large- and small-group markets offset their decreased costs with increased profits. The study's authors conclude that stronger measures may be needed to ensure that all consumers benefit from reduced overhead costs in the group insurance markets.
The MLR provision is one of the most important consumer protections in the health law. The rebates benefit consumers with plans that provide too little value. In addition, the MLR rule puts pressure on insurers to manage costs more efficiently. Insurance premiums are rising at considerably lower rates and the MLR and rate review provisions in the ACA are undoubtedly important contributing factors.
As always, thank you for all you do every day to support laws and policies that help cancer patients and their families.
Chris Hansen | President
ACS Cancer Action Network | American Cancer Society Cancer Action Network, Inc.