CIAB urges HHS to establish a national benchmark health plan
In an open letter to Secretary of Health and Human Services Tom Price, Ken A. Crerar, president of the Council of Insurance Agents & Brokers, has requested that the economic burden of the Affordable Care Act be reduced by establishing a national benchmark health plan in lieu of current costly state-enhanced benchmark plans.
“Adoption of a basic national plan is a cost reduction tool that the ACA directed the Department of Health and Human Services to develop,” Crerar said. “Not only did the Obama Administration HHS affirmatively decide not to do so, but in the way it directed the states to establish their individual benchmark plans, it essentially ensured that allowing for less benefit-rich plans currently is prohibited.”
Crerar’s letter comes shortly after President Trump’s executive order to “exercise all authority and discretion available” to alleviate ACA-related fiscal burdens on states, individuals, families, healthcare providers and other industry participants.
Crerar said CIAB supports the president’s executive order and as a way of supplementing this order, Crerar asks Price to act upon an often-overlooked cost containment mechanism in the ACA — namely, development by the federal government of a standard, streamlined benchmark health plan.
“The ACA requires HHS to establish such a national benchmark by definition and standardizing the minimum benefits package for qualified health plans,” Crerar said. “Further, the ACA dictates that if states impose benefit mandates for QHPs that go beyond the benchmark plan requirements, the state must defray the cost of those additional benefits.”
Crerar added that the expectation was that the national benchmark plan would be basic and affordable, and the state subsidization requirement would lead to massive reform of benefit mandates across the country.
“Broad mandate reform and its attendant cost saving potential was thwarted, however, when the previous administration refused to adopt a basic national plan, and instead, allowed each state to establish its own ‘benchmark’ that includes each and every benefit mandate required by that state before 2012,” Crerar said. “These enhanced state-mandated plans, which are now locked in place under current regulations, drive up costs for insurers and consumers.”
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By expanding plan options and competition, Crerar said this will drive reform of the healthcare system, give consumers the freedom to purchase what they want and control rising costs.
“To that end, one increasingly popular idea is to allow sales of health plans across state lines,” Crerar said. “The Council contends that establishing a basic national benchmark — which could even be modeled after existing state benchmarks — would serve the same purpose as interstate sales without triggering complexity and concerns related to our state-based insurance system, oversight responsibility and consumer protection functions of the states.”
The cost saving-tools Crerar mentions in his open letter is currently available to HHS, and Crerar said, it would not require a multi-year “off ramp” that other proposals may require.