November 27, 2012
Just before the Thanksgiving holiday, the Obama administration announced new regulations to implement three key provisions of the Affordable Care Act. They focus on insurance market reforms, standards for coverage of essential health benefits and employer-based wellness programs.
The proposed rule for insurance market reforms was created to improve access to health insurance coverage and outline standards that make the reforms easier for consumers to understand. The components of this rule include:
- Guaranteed availability of coverage meaning health insurers would generally be prohibited from denying coverage to people because of pre-existing conditions
- Limits on the factors health insurers can use to adjust premiums and the extent of the adjustments. Under the rule, health insurers can only use the following factors to set premiums: age, tobacco use, geography and family size
- Requirements that insurers maintain one single statewide risk pool for each of their individual and small employer markets unless they merge both of these pools into one pool
- Guaranteed renewability of coverage protects individuals who may become sick or who have a pre-existing condition from having coverage canceled
- Catastrophic plans are included in this rule, setting out provisions for enrollment
The proposed rule for essential health benefits will help consumers compare private health insurance plans by promoting consistency and ensuring that plans cover a basic set of services and items. Much of the rule is for health insurance providers – laying out steps they must follow to become accredited including an application process and timeline – and also gives states guidance and flexibility to determine how essential health benefits are defined. The rule establishes requirements for the coverage of preventive and wellness services and chronic disease management among other services.
The third proposed rule focused on implementing and expanding employer wellness programs and incentives insurers may offer. The proposed rule defines “participatory wellness programs” – those available without regard to an employee’s health status – and “health-contingent wellness programs” – those that require individuals to meet a specific standard related to their health to secure a reward. It also provides regulations that protect consumers within the health-contingent wellness programs. Finally this rule provides guidance for employers about the maximum allowed reward they may offer to employees who achieve certain health goals.
These are important steps toward implementation of key provisions of the Affordable Care Act, particularly regarding health insurance exchanges. The Exchanges present a unique opportunity to curb the growth of costly chronic conditions by ensuring that patients have access to health plans that utilize best practices in evidence based care coordination, wellness and prevention. While PFCD partners will be sharing their thoughts on the rules in the upcoming comment period, the release of these proposed rules represents a great start towards building a more integrated health delivery system that can help improve health outcomes for millions of Americans and reduce spending on potentially preventable chronic diseases.