As the debate over the future of the Affordable Care Act (ACA) continues in the U.S. Congress, it is important not to forget the role of the federal agencies responsible for implementing the law, the Departments of Health & Human Services (HHS), Treasury, and Labor (often called the “tri-agencies”). To their credit, members of Congress, particularly in the Senate, are discussing possible bipartisan actions to stabilize the ACA’s marketplaces and keep the law on a sustainable path. But whether the ACA meets its goals of expanding affordable, adequate insurance coverage also depends on how the tri-agencies manage their implementation and oversight responsibilities.

In a recently published issue brief for the Robert Wood Johnson Foundation, CHIR experts examine the range of potential regulatory action and enforcement discretion over health insurers, largely housed at HHS. Early executive actions and statements from HHS officials suggest that they will use their authority to reduce regulatory burdens on insurers and give them more flexibility to design benefits, conduct marketing, and set prices.

However, the impact of such changes will depend to a great degree on how states respond. Many states may wish to retain some or all of the insurance reforms required by the ACA, even in the face of federal relaxation of regulatory requirements for insurers.

In a series of blog posts, we’ll outline some recent and potential regulatory changes by HHS and discuss specific legislative and administrative options available to states in the wake of those changes. In this first post, we review actions that HHS has thus far taken to recast their approach to health plan oversight.* Many have been in direct response to the President’s January 20, 2017 Executive Order, calling on HHS and other federal agencies to provide greater flexibility to the states to create a “more free and open healthcare market” and to use all “authority and discretion” to “waive, defer, grant exemptions from, or delay the implementation of” provisions or the ACA that could impose a fiscal or regulatory burden on states, insurers, or individuals.

Since publication of that Executive Order, HHS officials have:

• Relaxed enrollment and benefit design requirements on insurance companies. New federal rules finalized in April 2017 make it easier for insurers to deny coverage to individuals who cannot document eligibility for special enrollment opportunities or who failed to pay premiums in the past. The rule also gives insurers greater flexibility to impose higher deductibles or other cost-sharing than allowed under the Obama administration.
• Delegated greater oversight responsibility to the states. Under the Obama administration, HHS officials reviewed plan networks for states that deferred to the federal government for the operation of the health insurance marketplace. New HHS policy states that so long as a state has the “authority and means” to conduct reviews of health plan networks, the federal government will accept its certification that they are adequate.
• Shortened timeframes for government review of health plan premium rates and forms. HHS has twice delayed previously established deadlines for insurers to submit their marketplace plans for review and certification, leaving less time for federal and state regulators to conduct comprehensive reviews.
• Extended the life of non-ACA compliant health plans. Obama administration rules had allowed individuals and small employers to renew plans that did not meet ACA requirements through 2017. HHS issued an extension of the policy through 2018.
• Solicited public input on ways to reduce health plan regulatory burdens. Through a formal “Request for Information,” HHS has solicited suggestions for administrative paths to expand consumers’ health plan choices, reduce the cost of insurance, and “affirm the traditional regulatory authority of the states.”

In the wake of these and other actions by federal regulators, states will have to determine how these changes affect their responsibilities to protect consumers and ensure the maintenance of stable, functioning local insurance markets. CHIR has created a set of fact sheets discussing actual and potential federal action and state options relating to:

• Certification and oversight of marketplace health plans,
• Essential health benefits,
• Medical loss ratio rebate program,
• Direct enrollment through web-based brokers, and
• Minimum essential coverage

Many states will have an interest in picking up a greater role in health plan enforcement and oversight of federal protections in order to ensure that consumers continue to receive the benefits promised under the ACA, as well as to promote stable, well-functioning insurance markets. In a series of future blog posts we will dig deeper into the range of state options to “step into the breach” in the wake of federal changes to the ACA.

* The Trump administration has undertaken a range of actions likely to affect the future stability of the ACA’s marketplaces, such as shortening the annual open enrollment period to 6 weeks, failing to commit to reimbursing insurers for cost-sharing reduction plans, and reducing funding for marketplace Navigators. However, our issue brief and this blog series focus more narrowly on the regulation and oversight of insurers and health plans.