July 30, 2018

A tale of 2 states: Inside 2 drastically different proposals to change exchange coverage

Daily Briefing

    Alabama and Illinois under a federal rule are restructuring the essential health benefits (EHBs) individual and small-group insurers in the states must cover—but they are doing so in significantly different ways, Shelby Livingson reports for Modern Healthcare.

    Learn four ways to establish your health plan diplomacy

    Background: CMS gives states more flexibility to define EHBs

    CMS in April issued a final rule that sets standards for health plans sold through the Affordable Care Act's (ACA) exchanges for the 2019 coverage year and gives states more flexibility to determine how exchange plans must comply with the ACA's 10 EHB requirements.

    The ACA requires individual and small-group health plans sold through the exchanges to cover EHBs in a manner "equal to the scope of benefits provided under a typical employer plan, as determined by the [HHS] secretary." HHS previously allowed state officials to use an employer-sponsored health plan sold in their state as benchmarks for EHB coverage. The default benchmark was the largest small-group plan available in the state.

    But beginning in the 2020 coverage year, CMS will allow states to choose from any of the 50 EHB-benchmark plans used for the 2017 coverage year. CMS also will allow states to construct a benchmark plan by replacing one or more of the 10 EHB coverage categories with those used in other states.

    Under such a scenario, for example, Georgia could select the inpatient benchmark coverage used in Tennessee and the prescription drug benchmark coverage used in a third state to create a new benchmark. The final rule states that, in such instances, the benchmark plan's benefits must not exceed those of comparable plans, and the benchmark plan must comply with the ACA's requirement that the benefits be "equal to the scope of benefits provided under a typical employer plan."

    According to Modern Healthcare, Alabama and Illinois so far are the only two states that have indicated they will redefine the EHBs individual and small-group insurers in the states must cover for the 2020 coverage year, and the states appear to be approaching the changes in drastically different ways.

    Alabama looks to scale back EHBs

    Alabama has proposed reducing the number of prescription drugs that exchange plans must cover in 2020 by 32%, or 341 drugs, Modern Healthcare reports. Drugs the state has proposed to cut include certain antidepressants, anti-inflammatory drugs, dermatology drugs, and opioids.

    According to Modern Healthcare, the state has said it hopes the move will help to reduce costs and combat the opioid epidemic. Alabama is accepting public comments on the proposed change through Aug. 3.

    Dania Palanker, an assistant research professor at Georgetown University's Center on Health Insurance Reforms, said Alabama's proposal to reduce the number of drugs exchange plans must cover could reduce patients' access to treatment. She said the change could particularly effect individuals with multiple sclerosis or fibromyalgia, because those individuals might respond to only one drug for their conditions.

    Illinois seeks to expand EHBs

    In comparison, Illinois has said it wants to broaden the EHBs exchange plans must cover to include alternative treatments for chronic pain, treatments for opioid-related substance use disorders, drugs that can reverse the effects of opioid drug-related overdoses, and telemedicine services for mental health care, among other services.

    Illinois Gov. Bruce Rauner (R) in a statement said, "These changes to the benchmark plan will give people who carry private insurance access to medications that will help them deal with the pain from an injury while reducing the odds that they become addicted to dangerous medications."

    Next steps

    CMS must decide whether to approve or deny states' proposed changes to EHBs. According to Modern Healthcare, states had until July 2 to submit their plans to change EHBs for the 2020 coverage year to CMS. Illinois met that deadline, but Alabama appears to have missed it, and it is unclear whether Alabama received a deadline extension from CMS, Modern Healthcare reports (Livingston, Modern Healthcare, 7/24).

    Four principles for insurers to establish their health plan diplomacy

    Health plans have a lot in common with the modern diplomat. Diplomats have to be objective, but still empathize with the needs of others. They play a central role in an industry, without directly controlling stakeholder behavior. Finally, they have to persuade their partners to act in the best interest of everyone involved.

    Health plans typically track the actions of their members, but for successful Health Plan Diplomacy, health plans should track their own actions. In our infographic, we’ve included four diplomatic principles that plans should apply to their member interactions and the corresponding metrics to measure progress.

    Download the Infographic

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