Health Insurance Market: Two Recent Changes & Their Impact on Labs

Amid all the talk of sweeping reform of the health insurance marketplace, the smaller, interim changes get overlooked despite their direct impact on labs and other providers. Two such changes took place last month.

1. CMS Props Up Health Insurance Markets
In August, CMS awarded $8.6 million in grant funding to 30 states and the District of Columbia to help state insurance regulators strengthen their respective health insurance markets. These grants are part of a larger initiative, $250 million designated for State Rate Review Grants, provided by the Patient Protection and Affordable Care Act (PPACA), intended to improve the process for how states review proposed health insurance rates.

According to CMS, states can use the allocated funds during the next 24 months for a variety of planning and implementation objectives related to the selected market reforms and consumer protections, including but not limited to implementing or enhancing policy form review, hiring or contracting with a clinician to review formularies, developing actuarial and economic analyses, and performing market scans of the respective state’s health insurance market to improve and expand the number of coverage options.

What the funding suggests: The PPACA, also known as the Affordable Care Act (ACA) and Obamacare, is far from dead.

Why it matters: Patient health insurance coverage, although always subject to change, is unlikely to face widespread disruption. The phrase about “performing market scans of the respective state’s health insurance market to improve and expand the number of coverage options” is especially telling.

2. Short-Term, Limited-Duration Health Insurance Expanded
Separately, the Internal Revenue Service (IRS), Employee Benefits Security Administration, and Department of Health and Human Services (HHS) last month issued a final rule that expands the availability short-term, limited-duration health insurance, from a maximum of three months to a maximum of three years.

The rule, which takes effect Oct. 2, 2018, is in response to an executive order signed by President Trump in 2017, entitled “Promoting Healthcare Choice and Competition Across the United States.”

What the insurance covers: Short-term health insurance is not “qualifying insurance,” and as such does not have to meet the minimum requirements or “essential health benefits” of the ACA. One of these minimum requirements is laboratory services.

Although many short-term health insurance plans include laboratory services, not all plans are equal. What’s more, short-term insurance does not generally cover pre-existing conditions.

Why it matters: From the standpoint of providers and patients, short-term insurance amounts to lesser coverage and is likely to affect reimbursement, and perhaps treatment decisions. From an IRS standpoint, short-term health insurance policyholders may owe an additional payment with their taxes.

Issues related to location: This is a federal rule, but individual state rules may differ. In Vermont, for example, extended short-term, limited-duration health insurance is not available. Anticipating federal action, Vermont signed into law Act 131, which among other things, mandates that short-term plans can only last for three months and cannot be renewed.

It is recommended that you check the laws in the states in which you do business in order to anticipate how this change may affect your facilities.