The Facts of the Month
Here is something to mention when discussing coverage trends in the month ahead.
Twenty-three percent of adults who say they were disenrolled from Medicaid since early 2023 remain uninsured. Overall, 19% of adults who had Medicaid prior to the start of the unwinding of eligibility standards put into place during the COVID-19 pandemic say they were disenrolled at some point in the past year. Of this group, 70% were left at least temporarily uninsured, while 30% already have another form of private health coverage in place.
Source: KFF Survey on Medicaid Unwinding
The Big Three
Each month PA-NABIP identifies three top public policy or legal developments that could impact our members and clients. Here are this month’s big three!
- Pennsylvania Insurance Department Issues New Guidance Encouraging Coverage of OTC Contraceptive
The federal Food and Drug Administration (FDA) recently approved the first-ever daily over-the-counter (OTC) birth control pill, Opill, and the Shapiro Administration is strongly encouraging all health insurance carriers offering fully-insured coverage in the Commonwealth to cover the cost of this medication via both retail and online sources. To incent coverage, the Pennsylvania Insurance Department has announced that they will require additional information from all insurers that choose not to cover OTC contraception options during the annual rate filing and approval process. For carriers that elect not to cover OTC contraceptive, the PID will require additional data to assess why OTC contraception is not covered by the health care plan.
The retail price of Opill is approximately $20 for a one-month supply, and the Shapiro administration believes this new coverage incentive could save Pennsylvanian women nearly $250 a year for over-the-counter contraception.
- New State Guidance on the Use of Artificial Intelligence in Insurance
On April 6, 2024, the PID issued Notice 2024-04, to provide guidance for insurers licensed to do business in Pennsylvania on the use of Artificial Intelligence (AI). The new guidance includes recommended best practices for how insurers obtain, develop and use certain AI technologies and systems, and advises insurers on what information PID may request during an investigation or examination. Notice 2024-04 is based on a model developed by the National Association of Insurance Commissioners in 2023, and Pennsylvania is the eighth state to adopt the bulletin.
The guidance:
- Reminds insurers that decisions supported by AI systems must comply with all applicable insurance laws and regulations;
- Encourages innovation while recognizing potential risks such as inaccuracies, unfair discrimination, data vulnerability, and lack of transparency;
- Sets forth the Department’s expectations regarding the kinds of information and documents about an insurers’ AI systems that the Department would expect to be produced upon request; and
- Outlines specific guidelines for governance structures, accountability, monitoring, audit protocols, and training within the AIS Program.
- Federal Regulatory Round-Up
The Biden Administration recently finalized several regulations that could impact NABIP members and our clients. They include the 2025 Notice of Benefits and Payment Parameters, and the Centers for Medicare and Medicaid Services issued the 2025 Rate Announcement for the Medicare Advantage and Medicare Part D Prescription Drug Programs. These two measures will govern how private health insurance and private Medicare plans handle coverage and payment issues during the year ahead. In addition, the Administration issued a final regulation that changes the standards for short-term, limited duration insurance coverage, and requires new consumer notifications when group health plans offer fixed medical or hospital indemnity coverage as part of their benefit offerings.
2025 Notice of Benefits and Payment Parameters
This annual catch-all measure is the vehicle the federal government uses to implement ACA provisions and policies concerning private health insurance and the health insurance exchange marketplace. Some highlights include:
- An extension of a pandemic era special enrollment period to allow people with family incomes at or below 150% of the federal poverty level to enroll in exchange-based coverage at any point during the calendar year rather than just the annual enrollment period.
- A policy change to allow states to add routine adult dental services to their essential health benefits (EHBs) base benchmark plan starting in 2027 if they want to do so.
- Clarification that for fully-insured small group plans, if plan-level prescription coverage is more generous than the applicable state EHB benchmark plan, the more generous coverage the plan offers is considered to be EHB coverage subject to annual maximum-out-of-pocket limits and the prohibition on annual and lifetime dollar limits. The only exception is if the coverage of the drug is subject to a state mandate. A Fact Sheet document issued along with the rule notes that while the new prescription drug coverage requirement does not apply to self-funded, level-funded, and large group fully insured plans right now, the Administration intends to propose extending this requirement to those markets in a future regulation.
2025 Rate Announcement for Medicare Advantage and Part D Plans
The proposed version of this rule would have dramatically changed how Medicare agents are compensated and eliminated the role of managing agencies/general agencies in Medicare. The Biden Administration did not finalize that proposal, but the final rule did create a new definition of broker “compensation” Medicare Advantage or Part D plan, designed to capture all potential sales and marketing activities. The rule also:
- Increases the national agent/broker fixed compensation amount for initial Medicare Advantage or Part D enrollments by $100, as opposed to the initially proposed increase of $31.
- Prohibits contract provisions between Medicare Advantage organizations/Part D sponsors and third-party marketing organizations (TPMOs) which may directly or indirectly create an incentive to inhibit an agent or broker’s ability to objectively assess and recommend the plan that is best suited to a potential enrollee’s needs.
- Requires TPMOs to obtain informed individual consent to share any personal beneficiary data collected for marketing, Medicare Advantage or Part D enrollment purposes. TPMOs must use transparent and prominently placed disclosure forms, and the consent documents cannot be blanket consent forms. Instead, TPMOs must obtain individual consent for each disclosure.
- Directs Medicare Advantage plans to issue a “Mid-Year Enrollee Notification of Unused Supplemental Benefits” annually between June 30 and July 31 of the plan year. Plans must personalize notices for each enrollee and include a list of any supplemental benefits not accessed by the individual during the first six months of the year. In addition, the notification must consist of the scope of the benefit, cost-sharing, instructions on how to access the benefit, any network application information for each available benefit, and a customer service number to call if additional help is needed.
Short-Term, Limited-Duration Insurance and Independent, Non-coordinated Excepted Benefits Coverage Final Rule
After allowing longer short-term, limited-duration insurance(STLDI) contracts to exist for several years, the Biden Administration took action to restore STLDI coverage back to the limited contracts available during the Obama Administration. The new rule:
- Amends the federal STLDI definition, limiting it to an initial contract of no more than three months, and a maximum coverage period of no more than four months, including renewals and extensions.
- Prevents the “stacking” of STLDI policies by preventing the same issuer, or any of its affiliates, from selling another STLDI policy to the same person within a 12-month period.
- Revises content and standards for the consumer notice that must accompany the sale of a STLDI policy.
For newly issued policies, the notice and coverage period limitation requirements will take effect with coverage beginning on or after September 1, 2024. STLDI policies issued or renewed between now and August 31, 2024, follow the old STLDI rules, unless a state takes action to limit STLDI coverage sold in the state.
Regarding fixed indemnity excepted benefits coverage, the initial iteration of the proposed rule would have banned offering fixed indemnity hospital coverage in conjunction with a group health plan and added increased consumer notification requirements. The final regulation dropped the proposed ban on offering fixed indemnity hospitalization coverage in concert with a traditional group health plan, although the Biden Administration noted it may return to a variation on this idea in future rule-making. Instead, the rule revises the current consumer notice that is currently required when someone buys a fixed indemnity plan on an individual basis and expands the notice requirement to fixed indemnity plans sold through employer group plans. The new notice provision takes effect on or after January 1, 2025.
Check This Out!
If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!
The National Academy for State Health Policy has a toolkit for states looking to transform their health systems by pursuing payment and delivery system reforms through population-based global budgets, value-based payments, and investments in primary care to help ensure patient access to high quality care. It serves as a repository for relevant mater
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