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Insurers concerned essential benefit benchmark changes would increase their cost

Insurers, providers, pharma urge CMS to reconsider allowing states to set essential health benefit benchmarks.

Susan Morse, Senior Editor

Insurers are concerned that a Centers for Medicare and Medicaid Services proposed rule giving states more flexibility in establishing essential health benefit benchmark plans will put them on the hook for any additional cost.

By Monday's deadline, CMS had received 344 comments on the proposed rule affecting Affordable Care Act coverage.

[Also: Wellness focus could boost health benefit costs, experts say]

Payers, providers, the pharmaceutical industry and state departments of insurance were among those weighing in on the Department of Health and Human Services' proposed rule for benefit and payment parameters that would begin in 2019.

Most agreed 2019 was too soon to make the changes. Centene was among those urging CMS to push the rule to at least 2020.

CMS is proposing to allow states to define their own essential benefits benchmark beyond what's in the ACA, to allow insurers to substitute benefits and to allow rate postings on a rolling basis, doing away with the mandate of filing on a deadline.

America's Health Insurance Plans said it is concerned that allowing states to set benchmarks on an annual basis and the new selection options would be a burden on states to implement, increase costs for issuers and result in disruptions in coverage for consumers.

AHIP instead recommends states have the option to select a new benchmark plan as frequently as every three years.

The health insurance organization supports HHS's proposal to adopt a threshold rate increase of 15 percent or greater, but at the product level. At the plan level it should be 20 percent, AHIP said.

"We further support the proposal to allow states to set different submission deadlines for rate filings," AHIP said. "However, we do not support public posting of proposed and final rate increases on a rolling basis. Such a practice could disadvantage issuers who file early and provide an unfair competitive advantage to those who file later."

Anthem said that allowing states to substitute benchmark plans and essential health benefit categories on an annual basis could lead to expanded benefits without defraying the cost of such benefits, increasing the cost of coverage, according to Anthony Mader, vice president of Public Policy.

"We have concerns that permitting states to annually change EHB benchmark plans could confuse consumers and further destabilize the market," Kaiser Permanente said.

The Blue Cross Blue Shield Association said the proposed essential health benefits benchmark would allow states to increase their coverage options without being held responsible for any resulting cost increases.

"We are concerned that this policy could cause costs to increase in the individual market unless the proposal is modified to require states to defray the cost of additional benefits added," BCBS said.

Cigna said it is against 3.5 percent user fee to support administrative functions of the ACA exchanges. This is an increase from 2 percent in 2018. The fee is based on a percentage of premiums from issuers on the exchange.

Molina Healthcare said, "Given that HHS has substantially reduced its direct support for marketing activities, navigator assistance, outreach/education programs, and is planning to transfer the responsibility for these functions to a greater extent onto industry participants in the future via the expansion of direct enrollment, we do not support user fees being maintained at the proposed levels and would in fact, expect to see a reduction in the assessment going forward to better reflect HHS' reduced participation in these important activities …."

Molina said it was concerned about the proposed benchmark plan options because they will increase administrative complexity and exacerbate affordability issues.

For future years, HHS could establish default standards, such as having a drug default standard for prescription drug plans.

The Pharmaceutical Research and Manufacturers of America, PhRMA and CVS Health were among organizations urging against a national benchmark plan standard for prescription drugs.

A narrow federal standard could cause "a race to the bottom with plans essentially forced to provide as narrow a benefit package as competitor plans to avoid attracting high cost enrollees," PhRMA said. 

CVS Health said it strongly supports a national standard for prescription drugs, but not one based on an arbitrary mechanism of drug counts. It supports criteria for the operation of a Pharmacy and Therapeutics Committee to develop a clinically appropriate formulary, as is typically done with employer plans.

"This challenge is particularly acute with respect to drug benefits, where issuers and their PBMs are required to develop and maintain at least 50 different formularies with little or no countervailing benefits to enrollees," CVS Health said. "This is in stark contrast to the typical employer plan, which generally adopts a single national formulary. Not only does the current approach pose operational difficulties and significantly increase administrative costs for issuers, but it also hampers their ability to harness the full power of their enrolled population in negotiating drug discounts with pharmaceutical manufacturers."

America's Essential Hospitals said CMS should ensure patients have access to all hospital services within their plan network and also make sure that the state definition of essential health benefits includes all necessary services for primary and specialty care, critical care, social services and more.

Relying solely on states to conduct network adequacy reviews without federal standards or oversight could lead to exclusion of essential community providers from qualified health plans, America's Essential Hospitals said.

The American Medical Association said the proposed rule could lead to skimpier healthcare plan benefits in the individual and small group insurance markets and result in higher out-of-pocket costs for patients.

"We urge CMS not to adopt these changes," the AMA said.

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