The government wants to take a more active role in selecting and designing health plans available on Healthcare.gov. But while that approach has worked for California's exchange, insurers may be leery about expanding it to the federal marketplace.
The proposed reforms, tucked into the 2017 Notice of Benefit and Payment Parameters released by the Centers for Medicare & Medicaid Services late last year, suggest that CMS wants to trade a wide array of plan choices on the federal exchange for more tailored options.
"An excessive number of health plan options makes consumers less likely to make any plan selection, more likely to make a selection that does not match their health needs and more likely to make a selection that leaves them less satisfied," the document states, adding that standardized options would give consumers the opportunity to more easily compare plans within each metal level.
These standardized options for bronze, silver and gold plans would include a single provider tier, a fixed in-network deductible, a fixed annual limitation on cost sharing, and standardized copayments and coinsurance for a key set of essential health benefits, according to CMS. Insurers would not be required to offer standardize options in 2017 and "would retain flexibility to offer non-standardized plans."
If these new regulations take effect, Healthcare.gov would take an approach similar to Covered California, a state exchange that is the country's most active purchaser. Some argue California's approach results in lower premiums for consumers and better insurance products than exchanges that take a more passive approach to regulating plan design, FierceHealthPayer has reported.
While Covered California's structure does present more regulatory hurdles for health plans, Charles Bacchi, president and CEO of the California Association of Health Plans tells Kaiser Health News that his group sees the exchange as valuable partner in setting ground rules for the exchanges. And Ken Wood, senior vice president of consumer markets at Blue Shield of California, notes standardized benefits provide "an enormous simplification for consumers."
Despite such good will on the state level, though, the health insurance industry's largest trade group--America's Health Insurance Plans--has strongly opposed CMS' idea to standardize plans on the federal marketplace, calling its proposal an "unwarranted attempt at market engineering by the federal government."
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