On June 27, the U.S. Chamber of Commerce’s Health Care Solutions Council released a 55-page, four-part report outlining legislative and regulatory recommendations to improve the health care system. This is the third of a four-part series unpackaging those proposals. Scroll down to find links to the introduction to the report and the other posts featured in the series.
The health care exchanges and new requirements and regulations that are part of the Patient Protection and Affordable Care Act (PPACA) will obstruct access to affordable coverage for employees if not carefully and gradually implemented, according to the Health Care Solutions Council report.
The report outlines five trouble areas:
- A uniform cap on out-of-pocket maximums that potentially applies to all plans and limits on deductibles imposed on small group plans. Employers’ ability to vary deductibles and co-payments to encourage employees to obtain care from higher-value providers would be significantly restricted. For example, increasingly popular high deductible plans paired with health savings accounts (HSAs) would would be discouraged. (Check out the infographic about the popularity of HSAs in our last post in this series.)
- Broad requirements for “essential health benefits (EHBs).” If EHBs are interpreted to include generous coverage for costly services where less expensive but effective alternative treatments or providers exist, premiums will rise significantly.
- A prohibition on plans with an actuarial value less than 60%. The EHB requirements and the 60% actuarial value threshold are expected to increase premiums by an average of 11.5% to 25.5% across states.
- Broad prohibition on any cost-sharing for preventive services. Though prevention is an essential part of high-value health care, requiring that all “preventive” services for all people have zero dollar co-payments will drive up costs.
- Broad underwriting restrictions and new community rating requirements. With broad prohibitions on underwriting individuals will have little reason to remain continuously enrolled in coverage, even when they are at risk of worse health or they change jobs, since they will be guaranteed an issuance of coverage. Without good reasons to stay continuously enrolled in coverage, people with lower health risks may drop out. A recent Milliman study projects that premiums will increase 20% to 45% on average in state individual exchanges.
To address these concerns, the Health Care Solutions Council recommends the following:
- Track and assess the impact of benefit requirements and new fees on premiums and access. The government should release information on the total number of plan filings, carriers, and plan levels at the regional level in both the individual and small group markets.
- Phase-in insurance markets reforms. While the Department of Health and Human Services has stated otherwise, it does have substantial authority to do what is necessary to mitigate disruptions at a regional or market level.
- Encourage healthier and younger individuals to enroll in exchanges by discouraging late or non-continuous enrollment, reducing administrative burdens and costs that will be passed down to individuals, and permitting low-cost coverage options.
- Make sure exchanges are flexible enough to encourage and support the innovative health insurance plans employers are using now, including HSAs and financial incentives for participation in for wellness and prevention programs, among other innovations.
Medicare and Medicaid also have tremendous indirect effects on the quality and cost of care. We will tackle those topics in our last post in this four-part series on health care reform solutions.
Here are the links to the other posts in the series: