The Fact of the Month
Here’s something to talk about when you are discussing plan design options with your clients.
Even though there is a wealth of evidence to support the importance of primary care in an effective healthcare delivery system, people’s views on primary care providers vary significantly by generation. The Employee Benefits Research Institute’s 2019 Consumer Engagement in Health Care Survey of 2,068 privately insured adults shows that Boomers are far more likely to have a primary care physician (82%) than Millennials (65%), with Gen X falling in the middle at 74%. Boomers also have a far higher degree of trust and attachment to their primary care provider, whereas Gen Xers preferred an office with all physicians in one place. Millennials were slightly more likely to rely on themselves regarding health care.
The Big Three
Each month GPAHU identifies three top public policy or legal developments that could impact our members and their clients. Here are this month’s big three!
End-of-Session Legislative Activity in New Jersey Includes Significant Health Policy Action
In our neighboring state of New Jersey, the end of the 2019 state legislative session led to some significant policy action. Lawmakers passed a bill to cap prescription drug cost-sharing for fully-insured coverage offered in the state. However, Governor Murphy elected not to sign legislation passed by the New Jersey General Assembly on January 13, 2020, to limit stop-loss insurance coverage for small business owners with self-funded or level-funded health plans.
Beginning with January 1, 2021 renewals, all carriers offering fully-insured individual, small and large group coverage must provide a certain number of plan options each year that include capped out-of-pocket costs for prescription drugs. The new law stipulates limiting patient cost-sharing for pharmaceuticals to $150 or $250 a month depending on the health-benefit plan level, in a certain percentage of each carrier’s product offerings. In the case of prescription drug benefits offered in conjunction with a qualified high-deductible health plan and a health savings account, the prescription drug cost-sharing cap will not apply until the plan beneficiary meets their deductible.
As for the stop-loss limits bill, Governor Murphy seemed on track to sign the measure. However, strong opposition from state business owners, union leaders, and many health insurance brokers led to the Governor’s pocket vetoing of the bill before the official end to the 218th legislative session.
PA General Assembly Takes Up Legislation to Expand Access to Association Health Plans
Legislation has been introduced in both chambers of the Pennsylvania General Assembly to allow for greater access to association health plans (AHPs) in the state. The House Insurance Committee held an informational hearing on the topic on January 21, 2020, and GPAHU Vice President and PAHU state board member, Scott Wham, provided testimony to the committee on behalf of the association.
The legislation addresses the new type of AHPs created by a June 19, 2018 regulation issued by the Federal Department of Labor. This final regulation created “two tracks” for AHPs. The first track allows existing association plans to continue to operate under long-standing DOL regulatory guidance. The second track provides for the creation of a new type of AHPs, but the rule also expressly affirms that the state regulatory structures overseeing all AHPs, including the new ones, would continue. Under current Pennsylvania state law, many aspects of the second track AHPs are not permissible, so the creation of these new AHPs has been limited. The goal of the new legislation would be to adapt Pennsylvania law to expand the creation of the new AHPs in the Commonwealth.
When considering the future of this legislation, it is crucial to keep in mind that a coalition of twelve state attorneys general, including Pennsylvania Attorney General Josh Shapiro, has challenged the legality of the AHP final regulation. On March 28, 2019, Judge John D. Bates of the District of Columbia found significant segments of the AHP Final Rule to be unlawful and remanded the rule. The case is currently under appeal with the Federal Circuit Court of Appeals for the D.C. Circuit.
Many Recent and Pending Federal Regulatory Actions Will Impact Health Insurance Coverage in The Year Ahead
Various federal agencies have issued proposed regulations in the last few months that, when finalized, will impact private health insurance options. Here is a status update on all of the pending federal rules.
- Safe Harbors for Employers that Offer an ICHRA – The Internal Revenue Service (IRS) proposed a rule in October of 2019 intended to complement the final regulation on Individual Coverage Health Reimbursement Arrangements (ICHRAs) released last June. This measure would create safe harbors for employers related to certain portions of the employer shared responsibility requirements (employer mandate) and the IRC Section 105(h) nondiscrimination requirements. The IRS is currently reviewing comments on their proposed measure and could issue a final regulation at any time.
- Transparency in Coverage – The Departments of Health and Human Services, Labor, and Treasury have proposed a measure that would require fully-insured health insurance carriers and self-funded group plans to make detailed cost-sharing information available to plan participants before they incur a claim. It also requires them to publicly disclose all negotiated provider rates and charges for covered items and services. The Departments just began reviewing public comments on the proposed measure and may finalize the guidance as soon as this spring. The timeline by which carriers and self-funded plans will have to comply with any new transparency requirements is still being determined.
- Proposed Notice of Benefit and Payment Parameters Rule for 2021 – The Centers for Medicare and Medicaid Services (CMS) just issued the proposed version of this annual catch-all regulation that covers private insurers and the health insurance marketplaces. It would set maximum out-of-pocket limits for 2021 at $8,550 for self-only coverage and $17,100 for other than self-only coverage (compared to $8,150 and $16,300 for 2020). It also addresses drug manufacturer coupons, HRA disclosure requirements, and many new requirements for carriers and the health insurance exchanges. The January 31st release date of this annual measure is the latest ever, and carriers typically need the information in it to be finalized before submitting next year’s plan options for approval beginning in April. So a quick turn-around on this rule is expected, but the Trump Administration is accepting public comments through March 2.
- Extension of Grandmothered Plans – With the payment parameters rule, the Trump Administration also announced that “grandmothered” health plans could continue on for one additional year until January 1, 2022. In Pennsylvania, Highmark Blue Cross Blue Shield and UPMC are the two carriers that currently provide grandmothered health insurance policies. In New Jersey, Horizon and Oxford both still have grandmothered plans available. Delaware and New York do not allow grandmothered plans.
- 2021 Medicare and Medicaid Programs Proposed Rule and Medicare Advantage and Part D Advance Notice – These two exhaustive pieces of annual regulatory guidance will have a significant impact on Medicare and related private Medicare Advantage and Part D plans in 2021. One of the most significant proposals is to require Part D plans to create a real-time price transparency tool for consumers to use in conjunction with their providers.
Check This Out!
If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!
NAHU’s 2020 Capitol Conference will be on February 24-25th at the Hyatt Capitol Hill in Washington, DC. If you haven’t registered already, consider doing so today! Not only will you get to meet directly with members of Congress to share important “from the trenches” information about healthcare and coverage options, but there are also fantastic personal learning opportunities! GPAHU’s own Scott Wham is the chair of this year’s meeting. The amazing agenda includes a keynote by Nick Buettner, the leader of the Blue Zones Organization. Blue Zones has an incredible research-based template to cultivate healthy populations from the bottom up that all brokers need to hear about.