Report Indicates Some States Establishing Cost-Sharing Laws

States should maintain laws and policies to regulate cost-sharing in private health insurance because of the barrier it creates between the consumer and health services, according to a recent report.

The report, which was published by the Urban Institute, investigates whether individual states have established regulations for the cost-sharing of private insurance companies. Cost-sharing, commonly used by insurance companies, refers to the portion of the covered health services costs that the consumer must pay.

The proposals to repeal and replace the Affordable Care Act (ACA) are likely to promote high-deductible health plans and extend consumer cost-sharing, which could cause them to delay or decrease their use of healthcare services, according to the report.

"As a result, some healthcare experts have called for more nuanced health benefit plan designs that cover certain services, such as primary care and generic drugs,before the deductible," the authors wrote. "This is sometimes called value-based insurance design."

Sandy Ahn and Sabrina Corlette, both of the Georgetown Health Policy Institute, coordinated a survey of laws and policies for each of the 50 states, and the District of Columbia (DC), to determine if a regulation of cost-sharing existed in each state. Of the 50 states, only 6—California, Connecticut, Massachusetts, New York, Oregon, and Vermont—and DC had established policies with specific cost-sharing standards for insurers to follow.

“It is no coincidence that all of these states also established their own health insurance marketplaces under the ACA,” the report states. “Decisions to standardize benefit designs in these states were largely driven by marketplace officials, even though insurers are required to offer these plans inside and outside the marketplaces.”

The standardized benefit plans in most of these 6 states require no, low, or moderate copayment amounts for predeductible services, including doctor’s visits for non-preventive primary care, specialty care, mental health and substance use disorder treatment, urgent care, outpatient habilitative and rehabilitative services, home health services, and hospice care.

In addition to the survey, Ahn and Corlette conducted in-depth interviews with stakeholders and marketplace officials in 4 study areas—California, Connecticut, DC, and Massachusetts—about specific state policies. These interviews revealed that most stakeholders believe that plans with predeductible coverage have a greater value than those that do not cover predeductible services.

“How health insurance will be regulated after an ACA repeal is uncertain, but lowering financial barriers to needed care remains an important policy goal,” the report concluded. “As policy makers call for greater state autonomy to establish standards for health insurance coverage, states may wish to consider requiring coverage of services predeductible or establishing cost-sharing limits for specific services in order to improve consumers’ access to necessary care."