Only 11 States and the District of Columbia Have Taken Action to
Implement the Affordable Care Act's 2014 Health Insurance Market Reforms
State Action Needed for Full Enforcement of Law's Consumer Protections, or
Federal Government Will Step In
Contact(s):
Mary
Mahon
Public Information Officer
TEL 212-606-3853, cell phone
917-225-2314, mm@cmwf.org
Bethanne
Fox
Senior Associate
301-448-7411, bf@cmwf.org
New York, NY, February 1, 2013—Only 11 states and the District of Columbia
have passed laws or issued regulations to implement the Affordable Care Actfs
major health insurance market reforms that go into effect in 2014, according to
a new Commonwealth Fund report. Thirty-nine states have not yet taken action to
implement these requirements, potentially limiting their ability to fully
enforce the new reforms and ensure that consumers receive the full protections
of the law. These reforms include bans on denying people health insurance due to
preexisting conditions, a minimum benefit standard, and limits on out-of-pocket
costs.
According to the report, Implementing
the Affordable Care Act: State Action on 2014 Market Reforms, by Katie
Keith, Kevin W. Lucia, and Sabrina Corlette of Georgetown University, states
that do not pass new legislation or issue new regulations may lack the authority
and tools necessary to ensure that health insurance companies in their state are
complying with the new rules, unless regulators have existing authority to
enforce federal law. If states fail to ensure compliance with the rules,
responsibility for enforcement, the authors say, could default to the federal
government.
gThe reforms to health insurance under the Affordable Care Act are a huge
boon to consumers, who for decades have been forced to buy health insurance in a
marketplace where insurers can discriminate against anyone who is sick,h said
Commonwealth Fund vice president Sara Collins. gThis all changes in 2014. But
because insurance regulation falls to the states, states need to take action to
make sure they can enforce the law and ensure their residents can fully benefit
from it.h
The health insurance market reforms that begin in 2014 apply to plans both
inside and outside the state health insurance marketplaces and include:
- Guaranteed Issue: Requires insurers to accept every
individual and employer that applies for coverage.
- Ban on Waiting Periods: Employers cannot impose waiting
periods longer than 90 days before an employee can be eligible for
coverage.
- Rating Requirements: Insurers are restricted from using
health status, gender, and other such factors in setting premiums.
- Ban on Preexisting Condition Exclusions: Insurers cannot
exclude or limit coverage for people with preexisting health problems.
- Essential Health Benefits: Requires insurers to cover a
comprehensive set of health benefits.
- Out-of-Pocket Cost Limits: Holds out-of-pocket costs to
the level established for high-deductible health plans that qualify for health
savings accounts.
- Actuarial Value: Requires insurers to cover at least 60
percent of total costs under each plan and sell plans that meet new benefit
tiers based on average costs covered.
For their study, the researchers reviewed actions taken by states and the
District of Columbia to implement the 2014 reforms between January 1, 2010, and
October 1, 2012. They found that states have taken the following steps:
- One state, Connecticut, has passed legislation that addressed all seven of
the new reforms.
- Another state, California, passed legislation on six of the seven
reforms.
- Nine states—Arkansas, Maine, Maryland, New York, Oregon, Rhode Island,
Utah, Vermont, and Washington—and the District of Columbia have passed laws or
issued new regulations covering at least one of the seven new market reforms.
According to the authors, future state action is critical. Without new
legislation, regulators in at least 22 states would be limited in their ability
to use all of the tools they need to protect consumers under the Affordable Care
Act. The authors say that while states can use existing authority to promote
compliance with many of the lawfs requirements, gquestions remain about how
effectively states can enforce the 2014 market reforms without new or expanded
legal authority.h
gBecause few states have taken formal action to date, we expect 2013
legislative sessions to be a critical time for state policymakers who wish to
limit direct federal enforcement of the reforms and for consumers expecting to
benefit from these new protections,h said Katie Keith, the studyfs lead author.
gState legislators and regulators should consider whether new legislation or
regulations—either to amend existing state law or to give their insurance
department more authority—are adequate to ensure meaningful regulatory oversight
and promote consumer protections at the state level.h
Moving Forward
Despite finding that few states have
acted to implement the 2014 health insurance market reforms, the authors expect
additional state action in 2013. A prior analysis of state action taken to
implement the Affordable Care Actfs 2010 health insurance market reforms found
that nearly all states ultimately required or encouraged compliance with those
reforms, which included bans on lifetime limits on benefits and dependent
coverage for young adults up to age 26. The authors note that uncertainty around
the law due to last yearfs Supreme Court challenge and the recent presidential
and congressional elections could have caused states to delay taking action on
the 2014 market reforms.
In states that do not take new action, additional coordination may be
required between state and federal regulators to address enforcement gaps. As
states contemplate new action, they are likely to look to how federal regulators
define what it means for a state to gsubstantially enforceh these reforms, and
whether this standard will demand that states have explicit enforcement
authority.
gIt is encouraging that nearly all states took action on the
Affordable Care Actfs early market reforms in 2010,h said Commonwealth Fund
president David Blumenthal, M.D. gNow, it is critical that states do the same
with these reforms, to help ensure that their residents benefit from secure,
affordable health insurance coverage.h
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Methodology: This analysis is
based on a review by researchers at the Georgetown University Health
Policy Institutefs Center on Health Insurance Reforms of new actions taken
by all 50 states and the District of Columbia between January 1, 2010, and
October 1, 2012, to implement or enforce seven of the Affordable Care
Actfs most critical consumer protections that go into effect for health
insurance plan or policy years beginning on or after January 1, 2014. In
the brief, these provisions are referred to as the Affordable Care Actfs
2014 market reforms. The review included new state laws, regulations, and
subregulatory guidance. The resulting assessments of state action were
confirmed by state regulators.
State regulators were also surveyed about
their authority to enforce or write new regulations regarding the 2014
market reforms. Forty-one states responded to the survey, although the
report identifies only the 11 states that took new action on their
enforcement and rulemaking authority. The states that may rely on their
existing enforcement and rulemaking authority to enforce the Affordable
Care Act are not identified, with findings presented only in
aggregate. |
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The Commonwealth Fund is a private foundation supporting independent
research
on health policy reform and a high performance health system.