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  • State Efforts to Reduce Consumers’ Cost-Sharing for Prescription Drugs - The Commonwealth Fund
    plans Delaware 2014 Individual small group and large group 100 for specialty tier drug 200 for aggregate specialty tier cost sharing No No Prohibits insurers from placing all drugs in a given class on the specialty tier Louisiana 2015 Individual small group and large group 150 for specialty tier drug No No Cap applies after deductible has been met Maine 2013 Individual small group and large group No 3 500 No Applies to plans with separate out of pocket maximum for prescription drugs Maryland 2014 Individual small group and large group 150 for specialty tier drug No No Cost sharing amount indexed to inflation New York 2010 Individual small group and large group No No No Prohibits use of specialty tiers Vermont 2012 Individual small group and large group No 1 000 a for self only coverage 2 000 a for family coverage No a Vermont s statute sets the annual out of pocket limit to be equivalent to the minimum deductible amount for a high deductible health plan as defined under Internal Revenue Code 26 U S C 233 c 2 A Diverse State Approaches Monthly caps on drug costs Four states California Delaware Louisiana and Maryland limit the amount individual and group market policyholders must pay to purchase a month s supply of drugs In California the cap applies to all covered drugs while the other three states apply it only to the specialty tier of the plan s formulary Annual caps on drug costs Maine and Vermont have put a ceiling on the out of pocket costs individual and group market policyholders can be made to pay each year for prescription drugs Limiting formulary flexibility Taking a somewhat different tack New York prohibits specialty tiers altogether for individual and group market plans Other states have used their authority to review and approve health plan benefit designs to protect consumers from high drug cost sharing For example Montana requires insurers to offer at least one plan that uses copayments instead of coinsurance as a form of cost sharing for silver gold and platinum level plans Standardized Benefit Design Seven state based marketplaces in California Connecticut Massachusetts New York Oregon Vermont and the District of Columbia limit how much insurers can shift the cost of drugs to consumers by requiring them to offer marketplace plans with standardized benefit designs Three states Massachusetts New York and Vermont limit marketplace insurers to just three formulary tiers In all seven states the standard designs limit consumers out of pocket costs typically with fixed copayments for generic and preferred brand name tiers though a majority subject consumers to coinsurance for the most expensive tier of drugs Of these marketplaces all but California s allow insurers to offer plans in addition to the standardized plans as long as they meet other Affordable Care Act cost sharing and actuarial value requirements A Balancing Act States that attempt to reduce consumers exposure to high prescription drug costs face a balancing act Capping out of pocket charges

    Original URL path: http://authoring.commonwealthfund.org/publications/blog/2015/nov/state-efforts-to-reduce-consumers-cost-sharing-for-prescription-drugs (2016-04-30)
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  • State Decisions on Allowing Mid-Sized Employers to Delay a Move to the Small-Group Insurance Market - The Commonwealth Fund
    provision While it is unlikely that the Obama Administration will unilaterally delay this requirement it does have a transitional policy for mid sized employers Under this policy states can decide whether to permit mid sized groups to remain part of the large group market for up to two more years and thus be exempt from the small group market reforms Not surprisingly states are dealing with this challenge in different ways State Decisions on Large Group Market Extensions In a previous post we outlined state decisions on whether to allow the renewal of insurance policies that were not compliant with ACA benefit standards in the individual and small group markets all but 11 allowed it Here we identify states that are using this transitional policy to allow plans offered in the mid sized employer market to stay in the large group market Exhibit 1 To date 34 states have issued guidance allowing mid sized employers to remain in the large group market for up to two years 1 Of these Delaware Rhode Island and Washington D C do not permit the renewal of noncompliant plans in the individual and small group markets but are now allowing mid sized companies to do so Not all states will permit transitional relief for mid sized employers Nine states California Colorado Connecticut Maryland Minnesota Nevada New York Vermont and Washington continue to prohibit noncompliant policies across all markets while eight states have not yet provided publicly available guidance to insurers 2 Why It Matters Many states are acting out of concern that an expansion of the small group market to groups of up to 100 employees could lead to significant market disruption including premium increases for employers with young or healthy groups This in turn could give some employers an incentive to self insure or even drop employee coverage If too many young healthy groups leave the market adverse selection could cause premiums to increase for the employers that remain However the administration s transitional policy carries risks if insurers decide to keep only their healthier groups of mid sized employers outside the small group market Some states have issued formal guidance on the transitional policy to prevent this from occurring For example Delaware Maine Michigan South Carolina Utah and Washington D C allow insurers to offer transitional relief to large employer health benefit plans but they must make the offer uniformly to all eligible employers regardless of the health status age or gender of employees While most states are moving to stabilize their markets and guard against potential adverse selection their actions are not long term solutions It is also not clear that the administration can do more than it has already done through its transitional policy Ultimately it is Congress that has clear authority to repeal or further delay this provision of the Affordable Care Act 1 In New Mexico large groups of 51 100 employees will be able to reenroll into their existing policies through October 1 2016 with coverage extending

    Original URL path: http://authoring.commonwealthfund.org/publications/blog/2015/jun/state-decisions-on-allowing-mid-sized-employers (2016-04-30)
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  • State-Based Marketplaces Look for Financing Stability in Shifting Landscape - The Commonwealth Fund
    had to spend more money than planned to address technical issues Meanwhile Maryland and Hawaii are currently engaged in disputes with their contractors over technical problems while Vermont faced 9 7 million in additional costs after changing vendors midyear Moving Forward As insurance markets evolve state budget negotiations proceed and policymakers slowly gain more data on enrollment premiums and operating costs we expect state based marketplaces will continue to adjust their operational priorities and explore their financing options Some are building uncertainty into their financing models New Mexico s marketplace has pegged carrier assessments to its actual operating expenses and legislators in Rhode Island are considering a similar approach Meanwhile state based marketplaces will likely tighten their budgets for IT improvements marketing outreach and enrollment assistance More generally states that continue to face financing difficulties may pursue larger changes The Hawaii marketplace is poised to follow the path of Nevada and Oregon and adopt a supported state based marketplace model that remains state run but leverages the federal IT platform for eligibility and enrollment Lawmakers in Vermont are currently debating a similar move To the extent that complicated marketplace financing questions persist this sort of operational transition may become more attractive to other states seeking a sustainable path forward Exhibit Assessment Levels on Individual Market Qualified Health Plans State Long term revenue source to fund marketplace operations Insurer assessment levels Percent of premium or per member per month PMPM fee Changes for 2016 2014 2015 Federally facilitated marketplace 3 5 3 5 California Assessment only on plans offered through the marketplace 13 95 PMPM 13 95 PMPM Colorado 1 Broad based assessment on plans inside and outside of the marketplace 1 4 plus 1 80 PMPM broad based fee 1 4 plus 1 25 PMPM broad based fee The board is considering a range of options to increase its assessment and PMPM fee Connecticut Broad based assessment on plans inside and outside of the marketplace 1 35 1 35 District of Columbia 2 Broad based assessment on plans inside and outside of the marketplace 1 Hawaii Assessment only on plans offered through the marketplace 2 2 The marketplace has asked the board to approve an increase in the issuer fee to 3 5 effective July 1 2015 though a contingency plan to transfer operations to the federal government is pending approval Idaho Assessment only on plans offered through the marketplace 1 5 1 5 The marketplace is raising the premium assessment to 1 99 Kentucky Broad based assessment on plans inside and outside of the marketplace 1 1 Maryland Broad based assessment on plans inside and outside of the marketplace 2 2 Massachusetts 3 Assessment only on plans offered through the marketplace 2 5 Minnesota Assessment only on plans offered through the marketplace 1 5 3 5 Nevada Assessment only on plans offered through the marketplace 4 95 PMPM 13 PMPM Adopted a 3 fee on the presubsidized premium for QHPs New Mexico 4 Broad based assessment on plans inside

    Original URL path: http://authoring.commonwealthfund.org/publications/blog/2015/may/state-marketplaces-and-financing-stability (2016-04-30)
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  • Implementing the Affordable Care Act State Regulation of Marketplace Plan Provider Networks - The Commonwealth Fund
    yet charted a substantially different course In three states regulators developed new quantitative requirements 18 Arkansas officials issued regulations obligating network plans offered inside and outside the marketplaces to adhere to time and distance standards beginning in 2015 19 Regulators in the California Department of Insurance filed emergency rules that adopted appointment wait time standards similar to those already applicable to plans regulated by the state s Department of Managed Health Care 20 Meanwhile in Washington authorities revised the state s framework to incorporate more detailed and concrete network standards These additions include time and distance requirements a specified ratio of primary care providers to plan enrollees and maximum wait times for primary care and specialist appointments 21 A somewhat larger number of states set rules intended to increase the transparency of plan networks Six states tightened requirements for plans to update provider directories Exhibit 4 22 For example as part of its broader overhaul of network standards Washington included a requirement for plans to update their directories on a monthly basis 23 New York s legislature imposed a still more stringent standard mandating that online directories be made current within 15 days of the addition or termination of a provider from the network or a change in a physician s hospital affiliation 24 Illinois and Maine passed legislation promoting timely disclosures of directory information 25 This new legal authority will make it easier for regulators in those states to develop more specific requirements in the future should they choose In addition at least six states including Arkansas California Mississippi New Hampshire New York and Washington acted to bolster the ability of regulators to oversee and enforce marketplace plan standards California for example enacted a bill that requires regulators to perform annual reviews of plans compliance with state standards and to post their findings including any waivers or alternative standards that regulators approved online 26 Mississippi issued regulations that require carriers to provide for each of their managed care plans a detailed filing describing the plan s network and the insurer s processes and procedures for complying with the state s network adequacy rules The new regulation also establishes explicitly that regulators have authority to enforce the state s network standards in the event of a violation 27 DISCUSSION The first year of marketplace coverage triggered widespread interest in how health plans design provider networks This attention has reignited debate largely dormant since the proliferation of managed care plans in the 1990s about the degree to which those networks meet the needs of consumers and the level of regulatory oversight appropriate to ensure they do The ACA addresses these issues by establishing the first ever federal standard for network adequacy in the commercial insurance market applicable nationwide to plans available through the insurance marketplaces The federal rules that implement this standard create a flexible regulatory framework that defines network adequacy qualitatively Health plans are not required to meet more rigorous quantitative standards a decision by officials at the U S Department of Health and Human Services HHS made partly in deference to the historical flexibility and responsibility enjoyed by states in this area 28 In addition to encourage insurer participation in the marketplaces and make it more likely that consumers would have a broader choice of plans state and federal officials gave insurers further flexibility to satisfy network standards in 2014 29 In response to feedback and ongoing public discussion about the benefits and risks of narrow networks federal regulators sought to increase oversight for the second year of coverage Officials are now evaluating plans that seek certification on the federally facilitated marketplaces using a reasonable access standard that focuses on provider practice areas that have historically raised network adequacy concerns 30 HHS also recently adopted more stringent requirements for provider directories including an obligation for insurers to update those lists online at least once each month 31 Meanwhile the NAIC is considering revisions to its existing network adequacy model law 32 The current version served as a template for federal network adequacy rules and HHS has indicated it will await the results of the NAIC s work before proposing significant changes to the federal framework 33 As these developments unfolded many state policymakers weighed whether to revisit their states standards Prior to 2014 nearly all states had erected some sort of regulatory framework for network adequacy As a practical matter however oversight processes were highly uneven both across and within states In many instances adequacy requirements applied only to certain types of network designs Moreover because assessing compliance with network standards can be complex and resource intensive fairly few states conducted regular reviews of plan networks after an insurer had been granted its state license In the first year of marketplace coverage most states maintained these rules as is or made only incremental changes Two states Arkansas and Washington joined the ranks of those that use a quantitative measure to evaluate the adequacy of plan networks bringing the total number to 29 states by January 2015 More states prioritized efforts to improve the accuracy and timeliness of provider directories 14 now require directory updates at least semiannually or within a specified interval from any change or to bolster the authority of regulators to oversee and enforce their network rules The relatively deliberate pace of regulatory change at the state level in 2014 is not altogether surprising To grapple with recent developments in network design states must balance competing considerations consumer and provider interest in broad access to in network care on one hand and consumer and insurer interest in flexible health plan designs that facilitate more affordable premiums on the other There is evidence that some states may have been reluctant to act too aggressively or too quickly in the absence of robust market data and feedback from consumers and stakeholders about their experiences with narrow network marketplace plans 34 Others have begun to solicit stakeholders input with an eye toward developing new rules or oversight mechanisms in the

    Original URL path: http://authoring.commonwealthfund.org/publications/issue-briefs/2015/may/state-regulation-of-marketplace-plan-provider-networks (2016-04-30)
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  • The Affordable Care Act CO-OP Program: Facing Both Barriers and Opportunities for More Competitive Health Insurance Markets - The Commonwealth Fund
    of the spectrum some CO OPs may have been too successful for their own good By pricing aggressively in their first year these CO OPs gained a larger than expected share of enrollees in some cases coming out ahead of their more well known competitors To be sure this competition likely helped keep premiums lower in many markets But high CO OP enrollment brought with it exposure to greater financial risk if they did not set their premiums appropriately Competitors complaints that some CO OP prices were unsustainable may have been proven correct as many of these same plans reported large underwriting losses and needed significant premium increases for 2015 to stay ahead of claims costs Furthermore payments from the Affordable Care Act s risk mitigation programs primarily the reinsurance and risk corridor programs may not kick in in time or be sufficient to rescue some CO OPs from their current cash flow problems These difficulties have led industry rating agency A M Best to report concern about the financial viability of several of these plans Challenges to Success These early difficulties should not be too surprising Thanks in part to lobbying by traditional insurers the Affordable Care Act s CO OP provisions included restrictions that made it challenging for CO OPs to compete The law prohibits CO OPs from using any federal loan funds for marketing expenses It mandates that a majority of CO OP enrollment come from individuals and small businesses limiting plans ability to penetrate the more profitable large employer market And it also requires the first loans to be paid back within five years a time frame that may be insufficient for many CO OPs to build a sustainable market presence Other obstacles emerged during implementation First federal policymakers cut the CO OP loan budget by two thirds leaving funding at levels far below what experts told officials would be needed to ensure that the plans were adequately capitalized Second the Administration s decision to allow insurers to maintain plans that were not compliant with the Affordable Care Act during an unanticipated transitional period bestowed further advantage on traditional market players who were allowed to retain healthier enrollees that had cleared health status underwriting pre reform CO OPs and other new insurers on the other hand were likely to have been left with a risk pool that was sicker than had been expected when they filed their rates for 2014 Apart from unique legal and policy hurdles CO OPs also face the barriers to entry that all newcomers confront in highly concentrated health insurance markets Among other challenges they must demonstrate adequate capitalization and effective governance to gain a state license build or acquire a network of providers at a reasonable cost price plans competitively without any historical claims data and build brand recognition and trust In addition many new market entrants must at least initially outsource critical functions such as customer support and claims processing which adds to overhead costs and reduces their ability to

    Original URL path: http://authoring.commonwealthfund.org/publications/blog/2015/mar/aca-co-op-program (2016-04-30)
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  • Some Health Insurers Canceling Noncompliant Policies, But Consumers Are More Informed of Coverage Options - The Commonwealth Fund
    consumers were unable to easily shop for more comprehensive and often more affordable coverage because of significant problems with the federal HealthCare gov website and some state marketplace websites Last year many insurers took advantage of the ability to renew noncompliant policies and some even withdrew the cancelation notices they had sent But while this transitional guidance reduced the number of consumers facing policy cancelation in the early days of full implementation of the ACA it only delayed the inevitable as many of these same consumers were in policies scheduled to expire by the end of 2014 Insurers Continue to Cancel Noncompliant Policies Under the administration s transitional guidance all noncompliant policies must be discontinued in 2017 However a number of insurers throughout the country have in recent months decided to discontinue these policies earlier This should not be surprising since insurers are constantly reevaluating their product lines often based on financial and business considerations For example in Alaska Moda recently canceled noncompliant policies affecting about 800 consumers in order to avoid a divided risk pool for the company this year Similarly in Indiana Anthem BCBS noted a lack of consumer demand and a consumer preference to go to the exchange in support of discontinuing policies for about 30 000 consumers In Colorado Humana sent out cancelation notices to 18 000 policyholders prompting the state s insurance commissioner to note that insurers have the right to discontinue products for business reasons such as updating their product portfolios or modifying their product offerings While insurers have always been able to discontinue plans the administration now requires insurers to inform consumers at least 90 days prior to the end of coverage that their current health insurance policy is being discontinued and that they have other health coverage options Specifically insurers must tell affected consumers of their right to buy any available individual market policy through the marketplace or outside of the marketplace during open enrollment or if the policy is being discontinued outside of open enrollment during a special enrollment period In addition insurers also are required to share other critical information with consumers such as informing them of their ability to apply for financial assistance to pay for private coverage or determine Medicaid eligibility through the marketplace as well as where to get help doing so Many consumers who lost their plans last year are eligible for financial assistance to help pay for premiums and cost sharing through HealthCare gov or the state marketplaces What s Next The Affordable Care Act seeks to remedy shortcomings of the individual market that imposed high costs on some consumers and locked others out of the market entirely The decision to allow noncompliant policies to continue meant a delay in these reforms for millions of Americans However consumers facing discontinuation of their coverage are now able to compare plans and make a decision to purchase one knowing that it meets all the consumer protections under the ACA such as guaranteed issue of coverage for those

    Original URL path: http://authoring.commonwealthfund.org/publications/blog/2015/jan/some-health-insurers-canceling-noncompliant-policies (2016-04-30)
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  • Insurance Premium Surcharges for Smokers May Jeopardize Access to Coverage - The Commonwealth Fund
    effect however may be to jeopardize access to affordable insurance for many consumers especially those with lower incomes These consequences have led groups like the American Cancer Society and American Lung Association to oppose the practice Reasons for tobacco rating The basic rationale for tobacco rating is that tobacco use is a voluntary behavior that increases health costs and can lead to higher priced coverage If insurers aren t allowed to adjust a person s rates based on tobacco use they will spread the costs connected with tobacco related illness and disease across the wider population thereby raising premiums for nonsmokers Additionally some point out that a tobacco surcharge creates a financial incentive for smokers to quit and a disincentive to start and therefore suggest that its use may lead to healthier behaviors and against Insurers flexibility to charge higher rates for tobacco use raises the risk that smokers will be unable to afford coverage and therefore will go without it This danger is acute for lower income Americans because of the way the health law s premium tax credits are calculated In short they don t ease the impact of the surcharge For a nonsmoker who earns around 17 000 a year and receives federal premium assistance for example annual premiums equal 4 percent of income about 700 for a similarly situated smoker the tax credit stays the same but the price tag for coverage nearly quadruples Given this calculus those who might be especially well served by coverage and the access to cessation services it provides may be unable to afford it Anecdotal reports presented at a recent national meeting of state insurance regulators indicate that in some areas the tobacco surcharge poses as big an obstacle to coverage access as the states that have not yet expanded eligibility for Medicaid Tobacco rating is also problematic because insurers may treat tobacco use as a proxy for poor health raising premiums to account for an enrollee s presumed medical needs in a way that skirts the ACA s prohibition on health status rating Finally though there are public policies and medical and behavioral interventions with track records of promoting cessation there is little evidence to suggest that hiking a consumer s insurance premium is an effective way to end tobacco addiction What options do states have The ACA s premium rating rules represent a minimum standard of consumer protection a floor not a ceiling Policymakers that wish to customize their state s tobacco rating policy have a number of options they may pursue separately or in combination The simplest approach is to reduce or eliminate the premium surcharge associated with tobacco use Every state that diverged from the federal tobacco rating standard in the individual market in 2014 followed this path Exhibit 2 Exhibit 2 State Standards for Tobacco Rating in the Individual Market in 2014 State standard States Tobacco rating is permitted but the maximum surcharge an insurer may impose is capped at a level less than the

    Original URL path: http://authoring.commonwealthfund.org/publications/blog/2015/jan/insurance-premium-surcharges-for-tobacco-use (2016-04-30)
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  • Implementing the Affordable Care Act: State Approaches to Premium Rate Reforms in the Individual Health Insurance Market - The Commonwealth Fund
    Giovannelli K W Lucia and S Corlette Implementing the Affordable Care Act State Approaches to Premium Rate Reforms in the Individual Health Insurance Market The Commonwealth Fund December 2014 Add to My Library Print Overview The Affordable Care Act protects people from being charged more for insurance based on factors like medical history or gender and establishes new limits on how insurers can adjust premiums for age tobacco use and geography This brief examines how states have implemented these federal reforms in their individual health insurance markets We identify state rating standards for the first year of full implementation of reform and explore critical considerations weighed by policymakers as they determined how to adopt the law s requirements Most states took the opportunity to customize at least some aspect of their rating standards Interviews with state regulators reveal that many states pursued implementation strategies intended primarily to minimize market disruption and premium shock and therefore established standards as consistent as possible with existing rules or market practice Meanwhile some states used the transition period to strengthen consumer protections particularly with respect to tobacco rating Read the brief e Alerts and Newsletter Sign up Downloads Issue Brief Publication Details Publication Date December 29 2014 Authors Justin Giovannelli Kevin Lucia Sabrina Corlette Contact Justin Giovannelli Associate Research Professor Georgetown University Health Policy Institute s Center on Health Insurance Reforms Editor Deborah Lorber Citation J Giovannelli K W Lucia and S Corlette Implementing the Affordable Care Act State Approaches to Premium Rate Reforms in the Individual Health Insurance Market The Commonwealth Fund December 2014 Related Publications March 22 2016 Repeal of Small Business Provision of the ACA Creates Natural Experiment in States February 24 2016 New Federal Survey Shows Gains in Private Health Coverage and Fewer Cost Related Problems Getting Care Related Topics

    Original URL path: http://authoring.commonwealthfund.org/publications/issue-briefs/2014/dec/state-approaches-to-premium-rate-reforms (2016-04-30)
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