January 04, 2019 04:29 pm News Staff – Recently issued guidance from the administration threatens fundamental patient protections and hinders Americans' access to affordable health coverage, the Academy warned HHS and the Treasury Department in a Dec. 19 letter.(3 page PDF)
The guidance document, titled "State Relief and Empowerment Waivers" and published in the Oct. 24 Federal Register, supersedes 2015 rules related to Section 1332 of the Patient Protection and Affordable Care Act (ACA).
As originally enacted, Section 1332 allowed states to propose waivers to the federal government that, if approved, let the states forgo certain parts of the ACA and pursue alternate coverage mechanisms if basic affordability and coverage conditions are satisfied. Under the new guidance, state waiver applications will be evaluated based on whether residents have access to affordable, comprehensive coverage, regardless of the coverage into which people enroll.
This, the Academy wrote, sets the stage for insurers to "reduce or eliminate certain essential health benefits to avoid vulnerable, expensive patients by excluding specific services. In doing so, insurers could potentially make plans more expensive for people with long-term chronic conditions or with sudden medical emergencies."
The Academy has supported waiver programs that allow states the flexibility to innovate -- if such programs maintain protections for essential coverage.
The new guidance, following administration rules issued last year that slackened controls on short-term, limited-duration insurance and association health plans, does the opposite. It undermines the ACA by modifying prior interpretations of the law's so-called "guardrails," allowing states to set aside such key protections as no annual or lifetime coverage limits and treatment for pre-existing conditions.
"The AAFP is deeply concerned states will seek waivers to provide access to less comprehensive or less affordable coverage, compared to the ACA, based on this standard," said the letter, signed by Board Chair Michael Munger, M.D., of Overland Park, Kan. "We urge the departments to maintain the 2015 guardrail policies. The AAFP is also troubled that the new guidance does not explicitly prohibit any waiver that reduces access to care for vulnerable populations, such as the elderly, low-income or those with complicated health conditions."
The letter added, "We are also concerned with the guidance proposal that would allow states to no longer ensure their waiver applications include coverage that qualifies as 'minimum essential coverage' under the ACA."
A report from the Kaiser Family Foundation published Dec. 10 suggests good reason for concern: "Even though states would need to retain an ACA-compliant market with comprehensive policies that do not discriminate based on health status, this uneven playing field could fragment the insurance market, steering healthy consumers to less-regulated coverage and driving up premiums for people with pre-existing conditions whose only options are ACA-compliant plans."
The Academy's letter cautioned against such market fragmentation, reiterating advice provided to HHS last spring regarding the agency's proposed rules on short-term, limited-duration insurance and association health plans.
"We harbor deep concern that these plans will not provide meaningful insurance coverage," the AAFP wrote in its recent letter. "Allowing small employers to buy low-value health insurance plans through association health plans is a step backward from promoting insurance that satisfies critical consumer protections, including coverage for pre-existing conditions, under the ACA."
The updated approach to state waivers may not withstand legal scrutiny, according to analysis from the University of Southern California-Brookings Schaeffer Initiative for Health Policy, which notes that such changes may have to go through the standard rule-making process rather than being issued as guidance.
The Academy's letter called on the administration to restore the original waiver rules.
"The AAFP strongly supports the goal of providing robust access to affordable health coverage for all Americans, but we are afraid that this guidance moves us further away from that goal," the AAFP wrote. "We therefore encourage the federal government to maintain the prior policy."
Related AAFP News Coverage
Don't Loosen Short-term Insurance Rules, AAFP Warns HHS
Academy Urges New Primary Care Benefit Without Cost-Sharing Instead
(4/23/2018)