In the Midst of Federal ACA Woes, States Play an Important Consumer Protection Role

In Washington, our health policy minds are on system overload. Since the election last week, the town is buzzing about the President-elect and new Congress’ promises to repeal the Affordable Care Act (ACA) as one of their first legislative actions. At the same time, they have also pledged allegiance to some of the law’s market reforms. Since most of those reforms are enforced at the state level, a continued state role will be critical to preserving these vital consumer protections.

Last month, the Centers for Medicare & Medicaid Services (CMS) awarded more than $25 million in grants to help states fund enforcement of key consumer protections and market reforms. Twenty-two states and the District of Columbia received an average of $1.1 million to bolster and improve their oversight of insurance companies.

Winning proposals range from developing new review tools to expanding outreach efforts; actions designed to safeguard and inform consumers about the protections outlined in the ACA.  Grantee states will enhance their oversight efforts to address several consumer protection areas: essential health benefits, preventive services, parity in mental health and substance use disorder benefits, appeals processes, and lowering the cost of coverage (Medical Loss Ratio (MLR)).

CMS funding for these proposals comes from a $250 million pot, initially allocated by the ACA to improve state rate review. From 2010-2014, four cycles of grants funded state actions to regulate carrier pricing. After 2014, unobligated funds from the initial allocation remained available for grants to states for planning and implementing insurance market reforms and consumer protections. These state-led initiatives are not just smoke and mirrors; in 2015, rate review grants funded improvements to review processes and increased transparency, leading to $1.5 billion in savings for consumers.

Here’s a look at what states are doing with money earned in this grant cycle:

Mental Health Parity

The largest chunk of change went to state proposals to ensure parity in mental health and substance use disorder benefits. The ACA reinforced the goals of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) by expanding the reach of federal requirements and creating a mandated benefit for coverage of certain services. To build on the federal government’s progress, twenty states received funding to expand and improve department training, compliance tools, and outreach efforts to protect consumer access to mental health and substance use disorder services.

Some states, like California, plan to use the grant money to enhance and automate analysis templates to improve the evaluation process for insurer compliance with mental health parity requirements. The District of Columbia outlined an initiative to improve care coordination between mental and physical health care. Other states, such as Massachusetts, are strengthening their network evaluations to protect access to specific behavioral health services.

Preventive Services

The second highest grant bundle went to improving oversight of preventive services requirements. The ACA requires health plans to cover preventive services without cost sharing, expanding access to vital care such as cancer screenings and immunizations. After consumers experienced surprise billing, the Obama Administration released clarification on the preventive services requirement. In this grant cycle, nineteen grantee states received funding to ensure compliance with this provision.

In Colorado, the Division of Insurance plans to review marketing materials to confirm that carriers clearly present accurate information on preventive services to consumers. New Hampshire has put forth a plan to create new evaluation tools in order to identify plan provisions not in accordance with the requirement, and create an automated response to carriers for corrective action. To inform consumers of their rights, Indiana will develop outreach programs, providing education and resources to people who need preventive services.

New Grants: Funding Breakdown by Market Reform

Market Reform Total Award Amount (approx.) Number of Jurisdictions to Receive Funding
Essential Health Benefits (Section 2707) $3.5M 16 (CA, CO, DC, HI, IL, IN, MI, MN, MS, NH, NM, OR, PA, RI, UT, WA)
Preventive Health Services (Section 2713) $5.3M 19 (CA, CO, DC, HI, IL, IN, KY, MA, MI, MN, MS, NC, NE, NH, NM, OR, PA, RI, UT)
Bringing down the Cost of Health Care Coverage (MLR) (Section 2718) $1.4M 10 (CA, CO, HI, IL, IN, KY, MA, MS, PA, UT)
Appeals Process (Section 2719) $2.1M 11 (AK, CO, DC, HI, IL, IN, MI, NE, PA, RI, UT)
Parity in Mental Health and Substance Use Disorder Benefits (Section 2726) $9.3M 20 (CA, CO, DC, HI, IL, IN, MA, MD, MI, MN, MS, NC, NE, NH, NM, NY, OR, PA, RI, UT)

Source: Centers for Medicare & Medicaid Services

State insurance regulation and oversight are critical to ensuring that consumers feel the benefits of the consumer protections set forth by the ACA. President-elect Trump and many members of Congress have said they would like to retain at least some of these protections, but leave more regulatory flexibility to the states. Regardless of what approach they take, state regulators must continue to provide robust oversight and will likely need to expand their enforcement capacity. We hope all levels of government will keep consumers at the heart of the health care debate.



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The opinions expressed here are solely those of the individual blog post authors and do not represent the views of Georgetown University, the Center on Health Insurance Reforms, any organization that the author is affiliated with, or the opinions of any other author who publishes on this blog.