Private Payers News

Do All Health Insurance Exchanges Follow Federal Regulations?

By Vera Gruessner

- Ever since President Barack Obama and his administration passed the Patient Protection and Affordable Care Act, the development of the health insurance marketplace was born. The law requires every individual to purchase health insurance or else risk a tax penalty. With the creation of health insurance exchanges, individuals of all backgrounds and various socioeconomic levels were offered greater access to healthcare services and their coverage.

Health Insurance Marketplace

With health insurance exchanges playing a vital role in expanding access to care and offering individuals more direct information about their healthcare coverage, it is disconcerting to hear that the state of New York may have inefficiencies with regard to its health insurance marketplace.

Essentially, some of the steps that New York’s health insurance exchange took to ensure that consumers were eligible for medical care coverage and subsidies were inadequate, according to the Wall Street Journal. Through an audit by the Office of the Inspector General under the Department of Health and Human Services (HHS), it was discovered that various individuals received benefits that they were actually not designated toward.

To see whether the state of New York followed standard federal regulations for health insurance exchanges, the Office of the Inspector General (OIG) looked at the documentation of 45 randomly selected consumers and determined whether the New York health insurance exchange followed federal policies for assigning coverage and subsidies.

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  • Out of the applicant documentation, a total of 28 individuals or 62 percent of the consumers had issues regarding their health coverage. However, this may not be the best representation of the whole applicant pool of health insurance exchanges in New York.

    “We would like to clarify that system functions or modifications to address each of the identified issues were already implemented or developed prior to the audit,” the New York State Department of Health responded to the audit findings.

    Colorado, Kentucky, Minnesota, Vermont, Washington, and the District of Columbia are also all currently being audited for their health insurance marketplaces by the Office of the Inspector General.

    The Republican Party could potentially use this information to further criticize the Affordable Care Act, which has been an ongoing battle between Republicans and Democrats since its initial passage in 2010. Essentially, there could be issues regarding the oversight of the Affordable Care Act brought forth in further presidential debates.

    “Other reports have found fault with systems set up to verify consumer eligibility. The HHS inspector general said in an August report that internal controls used by HealthCare.gov weren’t always effective in determining applicants’ eligibility for insurance or subsidies. The Centers for Medicare and Medicaid Services, which implements the Affordable Care Act, has said it corrected technology issues prior to the report, which examined the first open-enrollment period,” the Wall Street Journal reported.

    The OIG report stated: “The presence of an internal control deficiency does not necessarily mean that the New York marketplace improperly enrolled an applicant in a QHP or improperly determined eligibility for insurance affordability programs. Other mechanisms exist that may remedy the internal control deficiency, such as the resolution process during the inconsistency period.”

    “The deficiencies that we identified occurred because the New York marketplace did not (1) design its eligibility and enrollment system to always verify annual household income properly, (2) use existing system functionality to resolve inconsistencies in eligibility data, and (3) ensure that it follows requirements to verify applicants’ eligibility for minimum essential coverage through ESI using OPM and SHOP data.”

    Prior investigations found some issues regarding these marketplaces in California and Connecticut, the report states. Essentially, OIG looked at whether internal controls ensured sufficient oversight for the health insurance marketplace in New York. As the healthcare industry reforms its practices, it’s important to ensure that payers are following strict guidelines for the health insurance marketplace.