On June 12, the Department of Health and Human Services (HHS) published a request for information (RFI) seeking input on changes that could be made to the Affordable Care Act (ACA) to roll back regulatory requirements. The agency called on stakeholders to identify regulations that they consider are inhibiting job growth, are unnecessary or ineffective, or that generate more costs than benefits, with the aim of achieving four goals:

1. Empower patients and promote consumer choice;
2. Stabilize the insurance markets;
3. Enhance affordability; and
4. Affirm the authority of states in regulating health insurance

The agency received over 3,270 comments spanning from private citizens to major hospital systems and national health associations. To better understand the concerns and recommendations related to the law, CHIR pulled a sample of comments submitted by health insurers, state departments of insurance, and consumer advocate organizations. In Part 1 of this three-part series, we will review comments from large and small insurers, including those offered by two national trade associations:

• Aetna
• America’s Health Insurance Plans (AHIP)
• Blue Cross Blue Shield Association (BCBSA)
• Blue Shield of California
• Centene Corporation
• Cigna
• EmblemHealth
• Independence Blue Cross
• Kaiser Permanente
• Minuteman Health
• Molina
• Priority Health
• UnitedHealth Group
• UPMC Health Plan

Parts 2 and 3 of this series will focus on state departments of insurance and consumer advocate organizations.

Goal 1: Empower patients and promote consumer choice

Insurers made a wide variety of recommendations for increasing consumer choice and empowerment, particularly during the plan selection process. For instance, AHIP and Minuteman Health encouraged HHS to continue marketing and outreach during the open enrollment period to increase consumer awareness and broaden participation. AHIP recommended that renewal and discontinuation notices be streamlined so that more digestible information can be shared with consumers, while EmblemHealth encouraged the agency to scale back the amount of information on healthcare.gov to avoid overloading users. Other recommendations included allowing agents and brokers better access to agency-approved enrollment trainings (AHIP), and continued improvements to the application process, such as allowing consumers to correct minor errors rather than re-submitting new applications (Minuteman).

Insurers also focused on the display of plan information, offering diverging opinions on HHS’ quality rating system (QRS) pilot and standardized benefit designs. In June, the department announced that it would conduct a second year of pilot testing for the display of plan quality ratings in two states, rather than fully implementing the star ratings across all marketplace plans. Kaiser Permanente encouraged the department to expand this pilot, saying that publicly available quality measures “promote efficient, affordable and value-driven delivery of health care services,” and consumers outside the pilot states “deserve to reap the benefits” as well. In contrast, Centene urged that the QRS program be suspended indefinitely. The company notes that the marketplaces are still not mature and participating insurers’ enrollment has been volatile, making it difficult for them to identify and target areas for quality improvement.

Several insurers also used the opportunity to push back on standardized benefit designs. For example, BCBSA and Priority recommended that the federal standardized plan option be eliminated, as well as its preferential display. Priority argued that such plans include many first dollar benefits, which have high associated costs and result in increased premiums. Likewise, Cigna cast a negative light on standardized plans, describing them as a “one size fits all approach.”

Goal 2: Stabilize the Insurance Markets

Insurers were united in their core recommendations for stabilizing the insurance markets, and frequently cited four critical elements:

• Commit to uninterrupted cost-sharing reduction (CSR) payments;
• Enforce the individual mandate;
• Strengthen the regulation of special enrollment periods; and
• Implement improvements to the risk adjustment program.

Insurers reminded the agency once again that ongoing uncertainty in these areas has negatively affected insurer participation and premium increases, and to undermine any element, such as the individual mandate, would be “catastrophic” (Molina) to the market.

Beyond these fundamental demands, other suggestions included: shortening the timeframe for 1332 waiver application reviews (AHIP), regulating health sharing ministries (Priority), ending “grandmothered” or “transitional” plans (UPMC), reducing the three-month grace period for consumers that receive advanced premium tax credits (Cigna), and repealing the health insurer tax to lower healthcare costs (United), among others.

Goal 3: Enhance Affordability

Most insurers cited the above four stabilization elements as key to also enhancing affordability. Several insurers also spent a good portion of their comments on the issue of third-party payments of premiums. Insurers have claimed that one cause of marketplace instability is high-cost patients being encouraged to enroll in commercial plans rather than in Medicare or Medicaid plans, and then receiving premium payment assistance from third parties. The third parties are often the providers of services to these patients who benefit because they receive greater reimbursement from commercial insurers than through Medicare and Medicaid. HHS attempted to limit potentially inappropriate steering of patients in 2016, but its efforts were blocked through litigation.

Independence Blue and Blue Shield of California dedicated their entire comment letters to this single issue. Blue Shield called for a ban on premium payments by any financially interested third parties, saying it has seen “increased gaming,” and: “There is no doubt that providers steer enrollment to commercial coverage for the benefit of their bottom line…” The company reports that its dialysis claims for individual coverage have increased more than 300 percent since 2014, and estimates that it takes 3,800 members with full-year coverage to make up for a single dialysis patient enrolled by a third party. Likewise, Independence offered several examples of potential abuse, saying, “Our experience with third-party payments has been so impactful that we have been required to increase our administrative costs to identify, prevent, and mitigate these schemes…”

Other recommendations for enhancing affordability included: developing evidence-based benefit requirements (Emblem), simplifying the formula for complying with mental health parity (Minuteman), streamlining reporting and notice requirements (BCBSA), and allowing for the development of wellness programs in the marketplaces (Cigna), among others.

Goal 4: Affirm the authority of states in regulating health insurance

The vast majority of insurers—including Aetna, AHIP, BCBSA, and EmblemHealth—commented that since states regulate all aspects of the health insurance business, the review of premium rates and benefit details should begin and end with them, not the federal government. The companies urged HHS to return rate and form review authority to the states, as Aetna explained:

“Duplicating these state review processes at the federal level is not just administratively burdensome, it creates unnecessary uncertainty…it is still unclear when CMS may step in and override the state’s decision.”

The insurers also called for greater deference to state regulators regarding the designation of insurers’ service areas (Kaiser), network adequacy standards (Kaiser, Centene, Cigna), formulary requirements (Molina), and provider directories and summaries of benefits and coverage (EmblemHealth).

While BCBSA encouraged the agency to quickly approve states’ 1332 waiver applications, UnitedHealth more forcefully called for an immediate transfer of power, saying, “Given the failure of the Exchanges to achieve affordable coverage gains, CMS should immediately return oversight of private insurance markets to States.” As part of this declaration, UnitedHealth recommended a complete elimination of the federal essential health benefits and metal level requirements, and the restoration of a 5:1 age rating band.

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Take-Away: Insurers offered a plethora of ideas for reducing the ACA’s regulatory structure, leaving very little off the table for future discussions. However, they were overwhelming aligned regarding the goals of stabilization and affordability. For almost a year, we’ve heard the same requests from insurers: fund CSRs, enforce the individual mandate, limit special enrollments, and improve the risk adjustment program. These themes again saturated their responses to the RFI and it’s anyone’s guess whether this Administration will ultimately answer their calls.