Health insurers overburdened with Affordable Care Act implementation could consider a move to Puerto Rico or the U.S. Virgin Islands, as the U.S. Department of Health and Human Services has granted a myriad of reform exemptions in U.S. territories.
In a letter sent Wednesday, HHS told Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam and the Northern Mariana Islands that certain ACA coverage requirements don't apply to them.
Given the existing Public Health Service Act definition of "state" for new ACA requirements and funding opportunities, the territories do not have to comply with the following provisions:
- guaranteed availability
- community rating
- single risk pool
- rate review
- medical-loss ratio
- essential health benefits
The move marks an about-face from last July, when HHS said the agency could not help out the territories in their plea for reform exclusions, according to The Washington Post. Back then, insurers operating in territories had to abide by major market reforms but not require residents to sign up for coverage or offer subsidies to help them pay for plans--which insurers warned would create unstable markets and hurt competition, the Post noted.
HHS's new interpretation of "state" applies prospectively, so territories can keep any federal grants they already spent as of July 16 but must return all unspent grant funds to the Centers for Medicare & Medicaid Services, according to the letter.
While insurers in the 50 states and the District of Columbia must offer essential health benefits, a HealthPocket survey in February found most of the healthcare services excluded in the pre-Affordable Care Act insurance market have remained excluded in the ACA era.