Earlier this week, the U.S. Department of Health and Human Services (HHS) released its finalized rules for 2019 Affordable Care Act (ACA) plans. Intended to give states greater flexibility to design benefits and regulate insurers, the 2019 rules are similar to a draft the agency released in November, when the Big “I” submitted comments.
Of particular interest to Big “I” members, the proposal would revitalize the state medical loss ratio (MLR) waiver program, making it easier for state regulators to request reasonable changes to MLR requirements for insurers offering health insurance policies in their state. The proposal aims to “make the MLR adjustment process less burdensome on States and make adjustments available to enable States to develop innovative solutions for stabilizing their individual markets.”
In its November 2017 comments on the original proposal, the Big “I” encouraged the Centers for Medicare & Medicaid Services (CMS) to go further and remove agent and broker compensation as a “non-claims cost” under the MLR regulations CMS issued in 2011. However, the Big “I” believes the final provisions are a step in the right direction and will give states greater flexibility related to MLR calculations. The association will continue its advocacy efforts related to the MLR during the 2018 Legislative Conference next week.
The MLR requirements for insurance carriers mandate that they spend at least 80% (individual and small group) or 85% (large group) of the premiums they collect on claims payments and “health care quality improvement.” These restrictions mean no more than 20% or 15%, respectively, may go toward “non-claims costs.”
The ACA did not statutorily address how to classify agent compensation under the MLR. However, agent commissions were included in the “non-claims costs” category under implementing regulations, even though agent compensation does not go toward insurers’ bottom lines. Since taking effect, the MLR regulations have had a detrimental impact on agents and their clients.
In addition to the MLR changes, the rules remove the requirement that every area must have at least two navigator groups and that one be local. This change comes after the Trump Administration has already significantly cut the funding for navigators.
The rules also give states more leeway as they define the specifics of how plans must cover the ACA’s “essential health benefits,” and broaden exemptions for the ACA’s individual mandate for 2019. Consumers in some states will be able to get an exemption if they only have one insurer to choose from, or if they object to abortion but can only choose among plans that cover the procedure.
Wyatt Stewart is Big “I” senior director of federal government affairs.