HHS Releases ACA Insurance Market Reforms Proposed Rule

This proposed rule would implement the Affordable Care Act’s policies related to fair health insurance premiums, guaranteed availability (guaranteed issue), guaranteed renewability, risk pools, and catastrophic plans. The proposed rule would clarify the approach used to enforce the applicable requirements of the Affordable Care Act with respect to health insurance issuers and group health plans that are non-federal governmental plans. This proposed rule would also amend the standards for health insurance issuers and states regarding reporting, utilization, and collection of data under section 2794 of the Public Health Service Act (premium review process).

Today, consumers with current or past medical problems can be denied health insurance coverage in the vast majority of individual (nongroup) markets (45 states). Similarly, individuals and small employers often find that they have few protections in terms of the premiums that issuers can charge them.

The ACA addresses these problems by extending guaranteed availability (also known as guaranteed issue) protections so that individuals and employers will be able to obtain coverage when it currently can be denied, by continuing current guaranteed renewability protections, by prohibiting the use of factors such as health status, medical history, gender, and industry of employment to set premium rates, by limiting age rating, and by prohibiting issuers from dividing up their insurance pools. These reforms are effective for plan years (group market) and policy years (individual market) starting on or after January 1, 2014.

The proposed rule would also revise the timing of the submission of requests for state-specific

thresholds and the effective dates of such thresholds; require that health insurance issuers submit data on proposed rate increases in a form and manner to be determined by CMS, and amend the requirements for a state to have an Effective Rate Review Program. CMS is proposing these changes to align with the timing of rate submissions of qualified health plans (QHPs) in the Exchanges, and to adjust rate review to meet its additional purpose of helping to promote fair market competition beginning in 2014. The law requires that, beginning in 2014, the Secretary of HHS, in conjunction with states, monitor premium increases of health insurance coverage offered through an Exchange and outside of an Exchange. HHS will monitor these increases to identify patterns that could signal market disruption and assist in oversight of the new market-wide rating reforms created by the Affordable Care Act, which are effective on January 1, 2014.