Insurance Market Reform

Traditionally, insurers and employers have covered treatment for mental health conditions differently than treatment for physical conditions. Coverage for mental health care had its own (usually higher) cost-sharing structure, more restrictive limits on the number of inpatient days and outpatient visits allowed, separate annual and lifetime caps on coverage, and different prior authorization requirements than coverage for other medical care. Altogether, these coverage rules made mental health benefits substantially less generous than benefits for physical health conditions. This brief explores the various laws that have begun bringing them into balance.

This guide focuses on the private insurance reforms of the Affordable Care Act, including the health insurance marketplaces, rating, benefit and cost standards, and premium tax credits. It is intended to supplement the Navigator training available from the U.S. Department of Health and Human Services. This comprehensive resource addresses more than 230 enrollment questions about private insurance reforms, and is divided into four sections: individuals with no coverage; individuals who currently have coverage or an offer of coverage from their employer; coverage for small business employers; and post-enrollment issues.

This proposed rule would address various requirements applicable to health insurance issuers, Health Insurance Marketplaces, Navigators, non-Navigator assistance personnel, and other entities under the ACA. Specifically, the rule proposes standards related to product discontinuation and renewal, quality reporting, non-discrimination standards, minimum certification standards and responsibilities of qualified health plan (QHP) issuers, the Small Business Health Options Program, and enforcement remedies in Federally-facilitated Marketplaces.

This final rule sets forth payment parameters and oversight provisions related to the risk adjustment, reinsurance, and risk corridors programs; cost sharing parameters and cost-sharing reductions; and user fees for Federally-facilitated Exchanges. It also provides additional standards with respect to composite premiums, privacy and security of personally identifiable information, the annual open enrollment period for 2015, the actuarial value calculator, the annual limitation in cost sharing for stand-alone dental plans, the meaningful difference standard for qualified health plans offered through a Federally-facilitated Exchange, patient safety standards for issuers of qualified health plans, and the Small Business Health Options Program.

States, whether or not they have decided to operate their own health insurance marketplaces, must navigate rapidly changing health insurance markets in which the ACA’s reforms are affecting insurers, businesses, and consumers. Under the ACA, states are primarily responsible for implementing significant insurance reforms that went into effect on January 1, 2014. This paper explores the responses of eight states to the ACA’s new rules and the creation of the new health insurance marketplaces.

Concern about even modest disruption of existing health insurance coverage by the ACA regenerates the belief that "there's got to be a better way" to make coverage available, adequate and affordable. But this brief shows that disruption is inevitable in any health reform and that the ACA's disruption is remarkably limited—far less than single payer proposals on the left or market-based proposals on the right. Further, unlike even many narrowly targeted reform alternatives, the ACA improves the pooling of risk that is essential to effective insurance.

This document contains final regulations providing guidance to employers that are subject to the shared responsibility provisions regarding employee health coverage enacted by the Affordable Care Act. These regulations affect large employers, those with 50 or more full-time employees, including full-time equivalent employees, during the prior year. Generally, an applicable large employer that, for a calendar month, fails to offer health coverage that is affordable and provides minimum value to its full-time employees may be subject to an assessable payment if a full-time employee enrolls for that month in a qualified health plan for which the employee receives a premium tax credit. These employers will need to begin complying with these regulations in 2015.

This document contains proposed regulations relating to the ACA requirement to maintain minimum essential coverage. It stipulates that while certain types of Medicaid coverage and military health programs do not qualify as minimum essential coverage, individuals enrolled in these programs will not be subject to the shared responsibility payment for 2014. This proposed rule also provides more detail on hardship exemptions and enrollment in employer-sponsored health insurance plans.

The new health insurance marketplaces aim to improve consumers’ purchasing experiences by setting uniform coverage levels for health plans and giving them tools to explore their options. Marketplace administrators may choose to limit the number and type of plans offered to further simplify consumer decision-making. This issue brief examines the policies set by some state-based marketplaces to simplify plan choices: adopting a meaningful difference standard, limiting the number of plans or benefit designs insurers may offer, or requiring standardized benefit designs.

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.