Healthcare News from Capitol Hill and The Department of Health and Human Services
New HHS Reporting Rule Will Help Define "Essential Health Benefits"
On June 1, the U.S. Department of Health and Human Services (HHS) released a proposed rule that would require the three largest small-group health insurance issuers in each state to report detailed benefit information to HHS, as well as prescription drug coverage information and any limits on the benefits offered. The data reported will be used to define the "essential health benefits" (EHBs) that will need to be offered by all plans that participate in state insurance exchanges.
The Patient Protection and Affordable Care Act (PPACA) requires the establishment of state exchanges that are supposed to begin operating in 2014. Participating insurance plans, known as "qualifying health plans," will need to provide coverage of 10 designated categories of EHBs, including ambulatory care, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive care and chronic disease management, and pediatric services.
HHS's definition of EHBs will be based on the benefits offered by a "benchmark" insurance plan selected by each state. If a state does not select a benchmark plan, HHS will use the plan with the largest enrollment in the state's small-group market as the default benchmark. The three largest plans today are considered the potential default benchmark plans for 2014.
The proposed rule will be published in the Federal Register on June 5, and public comments will be accepted for 30 days.
CMS Ends Marketing Outreach For High-Risk Pools
In a May 25 letter from its Center for Consumer Information and Insurance Oversight (CCIIO), the Centers for Medicare and Medicaid Services (CMS) announced that it had ended its marketing campaign to increase awareness of PPACA's Pre-Existing Condition Insurance Plans (PCIPs), or high-risk pools. As of March 31, 2012, a total of only 61,619 people had enrolled in the PCIPs of all 50 states, but enrollment is expected to continue growing.
PCIPs were created in 2010 under PPACA to provide coverage for people with pre-existing conditions who could not obtain coverage elsewhere, until such time as insurers are required to offer coverage to all comers in 2014. CMS's actuary had estimated that 375,000 people would be enrolled in PCIPs by the end of 2010, and the Congressional Budget Office had predicted that 200,000 people a year would enroll, but total enrollment was only 7,986 as of November 1, 2010. At its peak, the aggressive year-long marketing effort, and an outreach program that paid $100 commissions to insurance agents and brokers who referred patients, helped generate 8,000 new applications per month, according to CMS.
While PCIP offer guaranteed coverage, premium amounts are not regulated, and some individuals may find the plans too expensive. Also, some states already offered high-risk pools, which have continued operating alongside the PCIPs.
Next Steps
Edwards Wildman's Healthcare Practice Group will continue to monitor healthcare news from Capitol Hill, CMS and HHS, and other federal and state agencies, and will bring you timely updates as new developments occur.
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