Insurance Market Reform

The Affordable Care Act requires health insurers to justify rate increases of 10 percent or more for non-grandfathered plans in the individual and small-group markets. Analyzing these filings for rates taking effect from mid-2012 through mid-2013, insurers attributed the great bulk—three-quarters or more—of these larger rate increases to routine factors such as trends in medical costs. Insurers attributed only a very small portion of these medical cost trends to factors related to the Affordable Care Act.

This paper explores several strategies states could implement beyond federal requirements, using policy decisions in 11 states—Alabama, Colorado, Illinois, Maryland, Michigan, Minnesota, New Mexico, New York, Oregon, Rhode Island, and Virginia—to illustrate the choices being made to protect against and mitigate the effects of both “rate shock” and adverse selection in the individual market . The findings indicate that study states had mixed approaches to mitigating rate shock and adverse selection, with some taking steps beyond the required federal measures but with other policy options left unexplored. Minimizing the impact of adverse selection—both against the overall insurance market and the exchanges—will require strong monitoring and oversight.

This new Alliance for Health Reform Toolkit, produced with the support of the Robert Wood Johnson Foundation, details the ACA's employer requirements and penalty. It also provides information about the delay in the employer mandate to 2015, and analysis about its impact on employer-based coverage. The Toolkit includes: key facts about the employer mandate; data about trends in employment-based health coverage; links to news articles and reports explaining and analyzing the issue; and health care experts who understand the issue and its implications, along with contact info.

On August 30, 2013, the IRS published final regulations implementing the shared responsibility provisions of the ACA. The regulations address, among other matters, the complex question of when Medicaid eligibility amounts to minimum essential coverage (MEC) for purposes of the Act’s tax penalties. Because people with MEC are barred from receiving premium and cost sharing assistance for Marketplace plans, the final rules also have important implications in the area of health policy for children and adults with disabilities, who may need both basic insurance and supplemental Medicaid coverage for their more extensive health care needs. Many of Medicaid’s most important disability-related eligibility categories are optional with states and, therefore, monitoring whether and how agency policy on when Medicaid counts as MEC will be an important issue to watch over time.

Network adequacy refers to a health plan’s ability to deliver the benefits promised by providing reasonable access to a sufficient number of in-network primary care and specialty physicians, as well as all health care services included under the terms of the contract. States have taken different approaches in regulating the adequacy of health plan networks based on their state-specific market, and states have a variety of options available to maintain robust health insurance markets by balancing access needs with the goals of controlling costs and attracting a healthy number of insurers. This brief, prepared by the Georgetown University Health Policy Institute, explores some of the discrepancies that can arise with varying network adequacy standards and provides examples of how some states have resolved such issues.