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Officials in the administration of President Donald Trump want to change one of the foundations of the Affordable Care Act health insurance regulation framework.
The Centers for Medicare & Medicaid Services is thinking about limiting a state's ability to adjust its ACA essential health benefits package, or standard benefits package, to suit local needs.
CMS — the arm of the U.S. Department of Health and Human Services that runs HHS programs related to private health insurance — has posted a request for information about the ACA essential health benefits package Monday.
In the request for information, officials ask members of the public for comments about what they think about how states create their EHB packages, what they think about differences between states' EHB packages, and what to keep in mind if CMS overhauls the EHB design rules.
"We recognize that potential changes to how EHBs are defined, interpreted or updated may create short-term transition and operational challenges," officials say in the RFI. "If CMS were to refine how EHBs are defined, interpreted, or updated, what short-term market disruption risks should CMS consider?"
Officials ask about the indicators, such as enrollment volatility or plan withdrawals, that would signal market disruption, and about how CMS can distinguish between temporary transition effects and longer-term structural market instability.
"What lead time would states and issuers require to operationalize changes, and how might that timing vary depending on the type, scope or complexity of such changes?" officials ask.
Comments are due July 15.
What it means: The nature of a state's Affordable Care Act EHB package has a direct impact on benefits both at fully insured employer plans and at self-insured employer plans.
New battles between Washington and states like California and New York over EHB packages could help reduce employer coverage costs related to state EHB additions.
In some cases, EHB battles could reduce employer access to benefits that they and employees want and divert attention from other employer health benefits lobbying priorities, such as efforts to weigh in on health savings account rules or changes in the No Surprises Act independent dispute resolution system rules.
The backdrop: The Affordable Care Act statute and federal ACA regulations require a state to base its version of the ACA essential health benefits package on the benefits offered by a middle-of-the-road employer-sponsored health plan, such as a program that covers state employees.
The EHB package is supposed to include 10 components, ranging from hospitalization coverage to coverage for basic dental and vision services for children.
Fully insured small-group plans must provide EHB coverage. Large fully insured employer plans and self-insured employer plans do not have to cover all EHB items, but, if they offer a type of coverage classified as an essential health benefit, they cannot put annual or lifetime limits on spending on that type of coverage.
CMS officials calculate the actuarial value of a state's EHB package, then use that figure to classify plans by "metal plans," or benefits richness levels. A top-tier platinum plan, for example, is supposed to cover about 90% about the actuarial value of the EHB package, and a bottom-tier bronze plan is supposed to cover about 60% of the actuarial value of the EHB package.
Mid-level silver plans cover about 70% of the actuarial value of the EHB package.
Essential health benefits package additions: Some states have tried to add items such as coverage for specialized services for children with autism and coverage for expensive procedures for people with problems conceiving children to their EHB packages.
Strategies for expanding EHB packages have included imposing state benefits mandates or requiring the plans used as EHB "benchmark plans" to cover certain products or services.
CMS officials now say they want to stop states from expanding their EHB packages either by imposing benefits mandates or by requiring benchmark plans to add benefits.
Some states say CMS is violating the Affordable Care Act EHB package design rules when it limits their ability to decide what the package should include.
Republican critics of the ACA sometimes point to California as the kind of state where Democrats in state legislatures have pushed individual and small-group premiums higher by adding extra benefits to the EHB package.
Supporters of the mandates say the extra mandates create coverage options that are critically important to some patients.
Critics argue that the mandates are often too expensive.
In California, Gov. Gavin Newsom, a Democrat, has vetoed some EHB additions that had broad support in the California State Legislature, such as a bill that would require plans to cover menopause management services, based on the argument that the additions could increase health insurance premiums.
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