Tensions flared over health insurance plans that operate under different rules than the Affordable Care Act as state insurance regulators debated whether the plans are good for their constituents and how to regulate them.
The Centers for Medicare and Medicaid Services in August published a rule allowing short-term health insurance plans to last a full year, as opposed to just three months. The regulation also allows for those plans to be renewed for two additional years.
In June, the Labor Department finalized regulations that allow businesses and self-employed individuals to band together to purchase small-group health insurance plans, known as association health plans, or AHPs. Both short-term plans and AHPs are exempt from various minimum coverage requirements of the ACA and, as a result, are cheaper than ACA-compliant policies.
Experts have cautioned that the changes may cleave the health insurance market into two groups of consumers: one comprising healthier, low-risk individuals who may not need comprehensive coverage, and another made up of higher-risk individuals who lean heavily on the government subsidies and cost-sharing mechanisms provided by the ACA.
In San Francisco, the National Association of Insurance Commissioners' managed care working group met several times to discuss the trends and speak to experts on the issues surrounding the administrative maneuvers pushed through by Donald Trump's White House.
New York's chief financial regulator, Maria Vullo, peppered Randy Pate, deputy CMS director and the regulator overseeing the ACA, with questions about states' authority to regulate the plans as they see fit, including whether they have full decision-making autonomy.
"If a state like New York can ban [the plans] ... if we don't agree, then there's not an impact from these rules," Vullo asked, rhetorically. "So if we think it's junk insurance, we don't have to use it?"
Pate affirmed that both rules were finalized so as to allow state regulators to apply their own methods to the plans, but he also said CMS believes that the plans have not negatively affected the ACA's markets.
"I think at the heart of everything we're doing is state flexibility," Pate said. "At least according to our analysis, we don't see a lot of damage to the individual market as a result of these plans."
Outgoing California Insurance Commissioner Dave Jones said in an interview that he was pleased that CMS and the Labor Department granted states full autonomy on the issues. Jones said his state has legislatively banned short-term plans and placed strict limits on association health plans because the ACA has worked well for California.
But Christopher Condeluci, director of The Coalition to Protect and Promote Association Health Plans, told the panel that AHPs are "not trying to dismantle" the law. He touted the new rules as providing more options for consumers who have been priced out of the individual and small group markets.
"Contrary to the rhetoric on both sides of this issue ... folks in my organization do not see association health plans and these regulations as an assault on the Affordable Care Act," Condeluci said. "We view these plans as an opportunity."
Condeluci pointed to companies such as Land O' Lakes, which has applied to sell self-insured, multi-state group health plans to farmers in co-ops and to individual dairy farmers currently in the company's Minnesota and Nebraska networks. The plans, Condeluci said, cover all 10 categories of essential health benefits under the ACA, but are still cheaper than ACA small group plans.
David Chase, vice president of outreach for the Small Business Majority, a national small business advocacy organization, said AHPs have not "hurt" the ACA small group market yet. But he argued that the rule was written in such a way that bad actors could offer dubious products under the guise of legitimacy.
His organization is concerned that insurance companies can raise rates based on factors prohibited under the ACA, such as age, gender, occupation or group size.
"We want small businesses to compete on their product, on their services, but not pay more or less for their health insurance based on having a female workforce," Chase said. "We don't expect every association health plan that's set up to be bad actors, but when you look at the regulation, [we ask,] 'Are we prohibiting these bad actors from doing this again?', and the answer is no."