The individual market health-contingent wellness programs cannotbase rewards, such as lower premiums and deductibles or cashpayouts, on meeting a specific health factor standard. (Photo:Shutterstock)

The Trump Administration is resuscitating a 2013 demonstrationproject contained within the Patient Protection and Affordable CareAct that would create a 10-state health-contingent wellness test program for the individual healthinsurance market.

Health-contingent wellness programs have long been controversialbecause consumer advocates say they tend to favor the already healthy and place additionalfinancial burdens on those in less that peak health. They have beeneffectively banned from the individual marketplace—save for thedemonstration project that was authorized as part of a Final Rulereleased in 2013. Health-contingent programs differ fromparticipatory programs in that the latter do not set standards ofachievement, but merely encourage participation.

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The Centers for Medicare & Medicaid Services issued a bulletin Monday essentially urgingstates to apply for one of the 10 demonstration project openings.Proposals must meet fairly strict guidelines for fairness to allinsured individuals and programs will be carefully evaluated, CMSsaid in a release.

As with other reforms within the PPACA reform, the TrumpAdministration credits itself with unveiling an innovative approachto better health, despite the fact that the demonstration programwas approved under the Obama Administration.

"Today's announcement is another example of President Trump'scommitment to driving better health outcomes by offering states newflexibility to innovate and empower Americans to make the besthealthcare decisions for themselves and their families," said CMSAdministrator Seema Verma. "Allowing states to implement thesewellness programs in their individual markets offers theopportunity to not only improve the health of their residents butalso to help reduce healthcare spending."

The individual market health-contingent wellness programs cannotbase rewards, such as lower premiums and deductibles or cashpayouts, on meeting a specific health factor standard.

State proposals can take two general formats, CMS said. Statesmay design their own plan model, consistent with the caveats andrequirements of the 2013 Final Rule. Or, "a State that wants toprovide health insurance issuers with more flexibility may allowissuers to design wellness programs (issuer-based demonstrationproject)."

HHS will evaluate the proposals and approve no more than 10state programs to participate in the demonstration project.

State proposals must be fashioned with five guiding principlesin mind.

1. All persons eligible for the program must be given anopportunity at least once a year to qualify for the rewards of theprogram.
2. The size of the reward for meeting the program goals cannotexceed 30 percent of the total cost of coverage.
3. Health-contingent wellness programs must provide a "reasonablealternative standard" or waiver of the health-contingent standardfor individuals who find it unreasonably difficult to meet theotherwise applicable standard because of their medical condition,or for whom it is medically inadvisable to attempt to satisfy thestandard.
4. A notice must be available explaining that alternativestandards are available.
5. Programs "must also be reasonably designed to promote health orprevent disease, not be overly burdensome, not be a subterfuge forhealth status discrimination, and not use a highly suspectapproach."

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