PA-NABIP Pulse May 2024

The Facts of the Month

Here is something to mention when discussing coverage trends in the month ahead.

While the federal transparency in coverage rules require that every health plan maintain a price transparency tool with data specific to every consumer, only 20% of people with employer-sponsored coverage report using a cost comparison tool. However, of those who did, almost 60% say it changed their behavior. Fifty-one percent chose a facility that was less expensive, and 41% used plan tools to predict the cost of a procedure or treatment ahead of time. Thirty-five percent chose a provider who was less expensive, and 22% opted for a less expensive medical service.

Source: NORC University of Chicago Study, “Employer-Provided Coverage Delivers Better Access to Care.” May 2024

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!

  1. Pennsylvania Legislature Advances Telemedicine Bills

Recently, both of Pennsylvania’s state legislative chambers have passed measures that set standards for the coverage of telemedicine services. Senate Bill 739, sponsored by Elder Vogel Jr. (R-47), was approved by that Chamber on May 8, 2024, by a vote of 47-1. It is currently pending consideration by the House Insurance Committee. Meanwhile, House Bill 1512, which was sponsored by Representative Christina Sappey (D-128) was approved by the lower chamber on April 10, 2024, and referred to the Senate Committee on Banking and Insurance on April 22, 2024.

Both bills would require health insurance issuers offering fully-insured coverage in the state to reimburse qualified providers for covered services appropriately provided through telemedicine and establish standards of care for services provided through telemedicine. The Senate-passed legislation is more extensive and also applies to Medicaid and CHIP, the Children’s Health Insurance Program. In addition, Senate Bill 739 establishes terms for when payment reimbursement isn’t required such as if the equipment or service isn’t in legal compliance, the service is inconsistent with the standard of care, and when the service is provided out of network.

Given that Pennsylvania is one of only a few states that does not have a legal framework for insurance coverage of telemedicine, and the benefits of such care, PA-NABIP supports this type of framework. Our state legislative committee is watching the progress of both bills closely and will inform our membership right away, should either pass both chambers and advance to Governor Shapiro for signature.

  1. New Legislation to Create Individual Health Insurance Subsidy Program

Governor Shapiro’s 2024-2025 budget proposal included plans to invest $50 million in the state’s individual health insurance market reinsurance pool, in order to free up funding and then use those monies to create a health insurance subsidy program for lower and middle-income Pennsylvanians who buy coverage through Pennie, the Commonwealth’s individual market health insurance exchange. To advance this idea, Representative Patty Kim (D-103), who is Chair of the House Insurance Committee, recently introduced House Bill 2234, which outlines the Governor’s proposal. The House Insurance Committee has already considered and approved the bill.

House Bill 2234 would create an affordability assistance program within Pennie beginning with the 2025 coverage year. The program would be designed to incent enrollment in exchange-coverage based on income or other eligibility criteria. In addition, since the bill would provide additional funds to the Commonwealth’s reinsurance pool, it should help other Pennsylvanians purchasing individual market insurance coverage by reducing their premium rates.

PA-NABIP will continue to monitor this legislation, which appears to be on a fast-track, and keep our membership apprised of the outcome.

  1. Biden Administration Rescinds Trump-Era AHP rule

The federal Department of Labor recently issued a final rule rescinding the association health plan (AHP) regulation adopted in 2018, during the Trump Administration. It leaves in place the original federal rules governing AHPs and other multiple employer welfare arrangements (MEWAs). The intention of the 2018 rule was to expand the number and type of AHPs available to American businesses. However, the rule conflicted with many state laws and Attorneys General of twelve states, including Pennsylvania, filed suit challenging the regulation in federal court. Due to this suit, large components of the 2018 rule were stayed by the federal court system, largely preventing the establishment of new AHPs governed by the broader 2018 rule. By repealing the 2018 measure, the Biden Administration hopes to eliminate any market-based confusion about AHPs.

Now that the 2018 rule is repealed, the only AHPs available nationally, are those that exist based on the original platform of state and federal regulation of AHPs and other MEWAs which require AHPs to be offered by bona fide associations that operate for a purpose independent of offering health insurance coverage. Longstanding Pennsylvania law limits the availability of traditional AHPs offering fully-insured coverage and largely prohibits any from offering self-funded coverage. However, AHPs are a more viable coverage option in other states.

Legislation intended to allow greater access to AHPs based on the 2018 federal rule, House Bill 555, is currently pending in the Pennsylvania House of Representatives. PA-NABIP did not take a position on this measure when it was introduced, but due to the repeal of the federal AHP rule upon which it is based, the measure is now a moot point and unlikely to advance any further.

Check This Out!

If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!

A new Kaiser Family Foundation brief examines and summarizes the evidence about consolidation among health care providers as more community hospitals become part of a larger system, and more physicians are in practices owned by hospitals and systems.

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