- AHIP has issued a statement to CMS that calls for changes in the agency’s proposed rule on association health plan (AHP) and short-term plan policy to avoid unintentional disparities in health insurance access for individuals with pre-existing conditions.
The trade organization stressed to HHS Secretary Alex Azar that CMS’s proposed rule to increase AHP coverage from six months to nine months could create confusion and healthcare disparities without proper AHP disclaimers.
Specifically, AHIP asserted that individuals shopping for health plans may purchase AHPs without knowing that AHPs don’t follow coverage rules as individual ACA-compliant, such as providing essential health benefits (EHBs).
The organization also shared industry concerns that AHP expansion could create mass-market migration that fragments the individual health plan market.
AHIP warned that individual health plan costs would rise as healthier individuals flock to lower-premium AHPs with less comprehensive benefits. Individual health plans may experience significant financial challenges to cover healthcare costs for unhealthier beneficiaries without a balanced risk pool of health members.
“We are united in our commitment to provide consumers with coverage choices that effectively help them improve their health and financial security,” Matt Eyles, the incoming AHIP president said in a public statement. “Every American should have access to affordable coverage, regardless of their income, health status, or pre-existing conditions.
“At the same time, we are concerned that this proposed rule will lead to more people being uninsured and underinsured, and to higher costs in the long run,” Eyles continued. “Short-term plans can provide an important temporary bridge for Americans who are transitioning between plans. But they are not a replacement for comprehensive coverage.”
AHIP recommends shortening the duration of short-term health plan length to six-months and concurs with CMS that short-term plan duration must extend beyond the traditional three-month period.
The organization explained that some individuals that rely on employer-sponsored coverage may not have insurance for at least three months if they are seeking a new job opportunity.
“Individuals who find themselves with a gap of one week or longer between leaving a prior job and starting a new job could find themselves without coverage options for some period of time under the current three-month limit,” AHIP added.
However, AHIP is confident that a six-month period is an adequate length for individuals to support their healthcare needs with transitional insurance. A nine-month duration would only complicate a consumer’s understanding of short-term insurance.
AHIP recommended that CMS rewrite the proposed rule by removing streamlined renewability features for short-term plans.
Consumers may be more inclined to re-enroll in the plans without realizing that their coverage would become obsolete after a certain time. The organization cautioned that streamlined renewability would accelerate detriments to the individual health plan market and consumer health plan options with EHBs.
“This will further result in adverse selection, drive up the rate of premium increases, and exacerbate affordability issues for many other people—especially those who are ineligible to buy other kinds of coverage (e.g., short-term plans) because of an existing health condition or who need coverage for services to treat their existing health conditions,” the letter explained.
AHIP strongly insisted that AHPs and short-term health plans must have strict disclosure requirements about benefits and duration.
The organization provided CMS detailed marketing and advertising collateral that would effectively educate consumers about the differences between comprehensive coverage and short-term insurance.
AHIP provided disclaimers that would inform consumers if a health plan provides preventive care, long-term coverage of EHBs, prescription drug benefits, and mental health care. In addition, AHIP suggested that disclaimers should provide cost sharing information for consumers such as disclaimers about premium assistance or other cost-related benefits.
“It is critical that marketing and application materials for short-term plans are clear that neither federal standards for individual market health insurance nor HIPAA excepted benefits apply and that consumers need to read policy documents carefully before buying a short-term plan,” AHIP emphasized.
AHIP also argued that the proposed rule should rely on a greater use of state responsibility to monitor and regulate short-term health plan sales. The organization said that states would be a better regulator than federal entities because states have specific insurance requirements and rules that may hinder AHP access for consumers.
The organization concluded its suggestions by emphasizing a need for extended time, so health plans and payers can prepare for AHP expansion. AHIP recommended that the final rule should go into effect on January 1, 2020 or 18 months after the rule is finalized.
AHIP expressed a willingness to work with HHS and CMS officials to provide the best transitional insurance options for consumers across the country.
“We appreciate the opportunity to comment on the proposed rule. If you have any questions or feedback about our comments or recommendations, we would welcome the opportunity to discuss them with you or your respective staffs,” AHIP said.