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New Obamacare rules seek to improve access, but could raise premiums

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Beltway Confidential,Opinion,Philip Klein,Obamacare,CMS,Health Care Exchanges,HHS

The Centers for Medicare and Medicaid Services on Tuesday proposed a new guidance for 2015 aimed at expanding choices of doctors and hospitals on plans offered through the exchanges in President Obama's health care law. But in an effort to answer one complaint of Obamacare, the proposed regulations could exacerbate another, by further driving up premiums.

Starting on Jan. 1, Obamacare imposed a raft of new regulations on insurance – such as requiring that insurers offer certain benefits and cover those with pre-existing conditions – that naturally made insurance more expensive. To contain the growth of premiums, insurers responded to the requirements by trimming the number of doctors and hospitals that were part of their networks of providers.

But this has led to a number of complaints (such as these in California), that newly insured Americans are having difficulty finding doctors or hospitals that will accept their coverage.

In a Tuesday letter to health insurers, CMS proposed a new set of rules to govern the plans to be offered through federal health exchanges for the 2015 benefit year.

The proposed rules would require insurers to submit a list of providers offered on each of their plans, and CMS would review the list to make sure that the plans provide “reasonable access” to hospitals, mental health providers, oncologists and primary care services.

“If CMS determines that an issuer’s network is inadequate under the reasonable access review standard, CMS will notify the issuer of the identified problem area(s) and will consider the issuer’s response in assessing whether the issuer has met the regulatory requirement and prior to making the certification or recertification determination,” the letter stated.

Separately, CMS has identified “essential community providers” that predominantly offer medical care to low-income individuals. In 2014, participating plans were required to include 20 percent of those providers in their networks. The new proposed rules would boost that to 30 percent in 2015, which the letter described as “a feasible standard for issuers to satisfy.”

The letter also disclosed that, “CMS is considering whether to require through rulemaking that all plans, or at least one plan at each metal level per issuer, cover three primary care office visits prior to meeting any deductible.”

However, the Obama administration is facing a clear dilemma. The more benefits insurers are required to offer and the more providers they are forced to include in their networks in response to complaints about “access shock,” the higher insurance premiums will go, which will fuel more complaints of “rate shock.”

Asked about the effect that the proposed rules could have on premiums in 2015, a spokesman for insurance lobbying group America’s Health Insurance Plans, Robert Zirkelbach, emailed: “We are reviewing the specific requirements in the letter and will be submitting formal comments. But anytime you add new benefit requirements or impose new regulations it adds to the cost of coverage.”

CMS proposed having insurers submit initial applications (which will include proposed premiums) for plans to be offered on the federal exchanges by June 27. The open enrollment period for insurance policies starting in 2015 will begin Nov. 15, or six weeks later than it did for the current benefit year.

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