Health Insurers to CMS: Your Changes Will Confuse Consumers, Hurt Markets

Health insurers warned that giving states the ability to define their own essential health benefits will confuse consumers and undermine the insurance markets. In comments to CMS published Monday, insurers that sell plans on the individual and small group markets said they are afraid they will bear the burden for greater healthcare costs if CMS follows through with plans to allow states to define their own benefits annually starting in 2019.

Anthem, which has drastically scaled back its 2018 participation in the Affordable Care Act (ACA) exchanges, said the proposal “may lead states to expand benefits under their benchmark plans without defraying the costs of such benefits, increasing the cost of coverage.”

Centene Corp, the dominant exchange insurer with more than a million individual marketplace members, said the CMS plan would be “more of a burden than a benefit to the market.” Molina, Kaiser Permanente, and the Blue Cross and Blue Shield Association echoed Anthem and Centene's concerns.

The news was reported in Modern Healthcare Monday.

The proposal would allow states to define the essential health benefits that health insurers in the state must offer, rather than having the federal government define those 10 benefits. States could:

• Adopt another state’s 2017 benchmark plan
• Pick and choose a few elements of another state’s benchmark plan
• Build a new essential benefits package from scratch so long as the new plan is not more generous than it is currently and is in line with a “typical employer plan.” The benchmark plan defines what benefits insurers in the state must offer.

The agency said states could make changes to the benefits each year. CMS aims to give states more flexibility that could potentially lead to more affordable health plan options in 2019. However, health reform experts worry that that the changes will lead to a rise of less costly yet less robust plans on the market.

Currently, all individual and small group health plans provide coverage for 10 benefits defined under the ACA, including emergency services, hospitalization, prescription drug coverage, maternity care, and care for mental health and substance abuse disorders, among others.

Kaiser Permanente, which owns Kaiser Foundation Health Plan, said in a comment that it opposes using “a typical employer plan” as defined by CMS as a guide for the essential health benefits.

In its proposed rule, CMS said the package of essential benefits must be in line with a “typical employer plan” in the large or small group market with more than 5000 enrollees. However, self-funded employer plans are often customized to fit a specific population, Kaiser Permanente said.

Aetna said that while the company generally supports CMS’ proposal, changing the benchmark plan every year would cause too much unpredictability and lead to market instability.