The Blue Cross and Blue Shield Association appreciates the opportunity to provide comments on the Proposed Rule on Expatriate Health Plans, Expatriate Health Plan Issuers, and Qualified Expatriates; Excepted Benefits; Lifetime and Annual Limits; and Short-Term, Limited-Duration Insurance.
BCBSA is a national federation of 36 independent, community-based, and locally-operated Blue Cross and Blue Shield Plans that collectively provide health care coverage for 107 million one in three Americans. Blue Cross and Blue Shield Plans offer private health plan options across America. Plans also partner with the government in Medicare, Medicaid, the Children’s Health Insurance Program, and the Federal Employees Health Benefits Program.
BCBSA supports the efforts of the Centers for Medicare and Medicaid Services to address circumstances where the sale of excepted benefit products is likely to negatively impact the individual market risk pool under the Affordable Care Act. While the impact to the individual market has not been significant to date, the sale of excepted benefit products is growing and will undermine the risk pool as more and more of these products are purchased as a “substitute” for comprehensive coverage.
While excepted benefit products such as short-term limited duration, hospital indemnity or other fixed indemnity, and specified disease insurance may serve individuals needs in specific circumstances, some insurers and agents are designing and selling these products as a “substitute” for comprehensive individual health insurance coverage, exposing consumers to significant financial risk and resulting in adverse selection to the individual market ACA risk pool.
Allowing excepted benefit products to be designed and sold in a way where consumers may perceive them to be a viable alternative to comprehensive ACA coverage will undermine the viability of the individual market. Regulators cannot place strict requirements on comprehensive coverage sold in the individual market, such as guaranteed availability with no pre-existing condition waiting periods, benefit requirements, and rating limitations, and allow other product lines to be sold carte blanche with no restrictions simply because these products are not clearly defined. A well-functioning, competitive marketplace for comprehensive individual health insurance requires that all competitors play by the same rules.
While we have attached detailed recommendations, BCBSA’s priority recommendations to address the inappropriate sale of these are as follows:
1. Shorten the maximum duration of STLD from the current “less than 12 months” limit. CMS should evaluate whether the proposed limit of “less than 3 months” is appropriate or whether a slightly longer duration should be allowed to address circumstances where a person has a known short-term need. For example, employers are allowed to have up to a four month period before an employer must offer a new employee health insurance coverage, a one month orientation period followed by a waiting period of not more than 90 days.
2. Require a disclosure notice of the limitations of STLD, and both group and individual HIOFI and SD, being used as comprehensive coverage. This notice should be included in the application and the contract as CMS proposes. In addition, the language should be displayed prominently in the marketing materials to increase the likelihood that consumers see and read it. Similar to the standard renewal and discontinuation notices, states should be allowed to develop their own notice.
3. Add language to the notice for STLD coverage educating the applicant on the availability of subsidies for persons who are not eligible for group health insurance. Since many purchasers of STLD have recently lost their employer based coverage some would potentially be eligible for financial assistance. Coming from employer based coverage, these individuals may not be aware of the availability of subsidies and cost-sharing reductions, or their financial eligibility for these programs.
4. Refine the proposed definition of HIOFI and SD to ensure the definitions addresses the issues while minimizing, to the degree possible, unintended consequences. For example, historically many HIOFI policies have provided different payments based on place of treatment, and have limited HIOFI coverage to a fixed payment amount per day. This means the products could not vary payment based on the location the person received care.
Date:August 9, 2016