White House Releases 700 Pages of Rules on Implementing the ACA

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On Friday, the Obama administration released more than 700 pages of new regulations on the implementation of various aspects of the Affordable Care Act, The Hill's "RegWatch" reports.

Three of the four sets of rules have been finalized and take effect on May 11. All four sets are scheduled to be published sometime in the middle of this month.

They cover the ACA's health insurance exchanges and new standards and reforms to the insurance market, such as encouraging cost-sharing, stabilizing health insurance premiums and blocking insurers from denying coverage, "RegWatch" reports (Wilson, "RegWatch," The Hill, 3/1).

Details of Regulations

One of the three finalized sets of rules requires insurers to report data on all rate increases, rather than just rate increases of 10% or more. The requirement will apply to health plans marketed to individuals, families and small businesses, the New York Times reports. Federal officials said the new rule is needed to provide additional data to monitor trends in premiums as the ACA takes effect.

In addition, the new rules include a requirement that insurers pool the claim costs of all their customers when setting rates in the individual market in a state. Similarly, insurers must consider the claim histories of all of their small-business customers when setting those rates. The requirement aims to ensure that premiums for certain products reflect the combined experience of all products in the market (Pear, New York Times, 3/3).

Another set of rules alters the medical-loss ratio regulation, which requires private insurers to spend a specific amount of premium dollars on direct medical costs or issue rebates to consumers if they do not comply with the ratio. According to CQ HealthBeat, HHS changed the deadline for insurers to report how much they spend on medical care and quality improvement from June 1 to July 31. In addition, the annual deadline for insurers to issue any required rebates has been pushed back from Aug. 1 to Sept. 30 (Reichard, CQ HealthBeat, 3/1).

According to "RegWatch," the fourth set of rules -- which are preliminary and cover cost-saving programs and government risk-pooling -- also will be published in mid-March and be open for a 60-day public comment period. The rules, which also implement the Small Business Health Options Program proposal, will take effect on Jan. 1, 2015 (Wilson, "RegWatch," The Hill, 3/1).

The proposal outlines a transition policy for the program to promote market stability. It also aligns SHOP special enrollment periods to those in the group health insurance market, according to a CMS fact sheet (Daly [1], Modern Healthcare, 3/1).

OPM, IRS Issues Final Regulations

Separately, the Office of Personnel Management on Friday issued its final regulations governing multistate plans offered in the insurance exchanges (CQ HealthBeat, 3/1).

OPM said insurers that receive a contract to offer multistate insurance plans must adhere to each state's insurance regulations. However, in some cases they would be allowed to use a federally approved package of benefits rather than repeat the ones set for each state (Radnofsky/Wilde Mathews, Wall Street Journal, 3/1).

Insurers Balk at Proposed Premium Fees Rules

Meanwhile, health insurers balked at the Internal Revenue Service's proposed rules implementing a health insurance premium tax that is expected to collect $8 billion in 2014 and $14.3 billion by 2018, The Hill's "RegWatch" reports.

The fees, which would be due on Sept. 30 each year, would vary in size based on insurers' net premiums. The fees also would carry penalties of $10,000 if deadlines are missed, plus $1,000 for every unmet day.

America's Health Insurance Plans said the fees are an annual tax that would exceed $100 billion in the next decade, affecting most families that still are struggling to recover from the recession. The group estimates that the average cost of a family plan would rise by more than $300 next year and surpass $500 in subsequent years as a result of the proposed rules (Goad, "RegWatch," The Hill, 3/1).

Meanwhile, Rep. Charles Boustany (R-La.) -- chair of the House Ways and Means Oversight Subcommittee -- has reintroduced legislation (HR 763) that would repeal the insurance tax. The bill drew 218 cosponsors in the last Congress, according to Modern Healthcare. Boustany is scheduled to convene a hearing on Tuesday to review the effect of the levy, among other aspects of the ACA (Daly [2], Modern Healthcare, 3/1).

Frank Apgar
It isn't clear from the article as to what will be required in the individual market with the new rules stating that the claim costs of all their customers be pooled into a single group when setting rates. They key question is whether this means that the health plans will be required to have a single premium for a given group of individuals that is state wide. Today rates are set within specific regions. If this is the case, there will be areas in the state where premiums will drop in the aggregate, and others with significant increases. The greater Sacramento region has high premium rates relative to most other large urban areas in the state. This is due to the existing contractual pricing power of the hospitals and Medical Foundations. Younger males will be hit particularly hard given the additional requirement that rates cannot be based on one's gender. Consequently, many will defer purchasing coverage until they are sick and need services, driving premium costs even higher.

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