Oklahoma health insurance consumers will still receive benefits and protections of the Affordable Care Act
Barriers still remain in achieving the real goal of the Affordable Care Act (ACA), to get uninsured Americans affordable healthcare coverage. The Supreme Court created one of these barriers when it ruled that the federal government could not force states to expand Medicaid coverage to all individuals with incomes less than 138 percent of the Federal Poverty Level (FPL). As a result, 14 states, including Oklahoma, have decided or are leaning towards not expanding Medicaid.
The latest barrier is the unwillingness of some states to enforce the consumer protection provisions of the ACA. In states unwilling or unable to enforce these provisions, the Centers for Medicare and Medicaid (CMS) has empowered the Center for Consumer Information and Insurance Oversight (CCIIO) to directly enforce the provisions.
These provisions, which take effect January 1, 2014, reform current health insurance market practices. They are designed to protect health insurance consumers by guaranteeing accessible, affordable, and adequate health insurance plans:
- Accessibility – The consumer protection provisions of the ACA will make health insurance more accessible by requiring that insurers guarantee healthcare coverage to all who apply and prohibiting waiting periods of longer than 90 days.
- Affordability – To ensure affordability of health insurance plans, insurers can only vary rates based on four factors: family composition, geographic area, age and tobacco use. The ACA further limits the variation for age and tobacco use. An insurance company cannot charge an adult more than 3 times the rate of a younger person, and can only charge a tobacco user 1.5 times more than a non-tobacco user. Consumer out-of-pocket cost will also be limited under the ACA and insurers will be required to cover at least 60 percent of the plan’s total cost.
- Adequacy – As a result of the market reforms, insurance companies will no longer be able to exclude preexisting conditions from coverage. The law also outlines ten categories of essential health benefits that must be covered by insurance plans being offered through the insurance marketplace.
Health insurance regulation is primarily a state action. In partnership with the federal government, states are expected to enforce the consumer protections provisions of the ACA. States will be responsible for enforcing the provisions for insurance plans offered inside and outside of the health insurance marketplaces. However, CMS will step in and enforce the law if states notify the agency of their lack of authority or unwillingness to enforce the law, or if CMS finds that a state is not substantially enforcing the provisions.
A report by the Commonwealth Fund found that only 11 states so far have taken legislative action to enforce the ACA insurance market reforms. To be fair, some states already have the necessary legislation in place to enforce these provisions, so no more action is required on their part. However, four states, including Oklahoma, have notified federal officials that they will not be taking action to enforce the consumer protection provisions.
In a press release, Commissioner John Doak explained that the Oklahoma Insurance Department would not be participating in a collaborative effort with CCIIO to enforce the ACA. He also released a letter sent to the CCIIO director explaining his department’s lack of authority to enforce the ACA and his disapproval of subjecting health insurers to a “system of dual regulation.” In the letter, Commissioner Doak expressed his concern regarding the impact these dual regulations would have on Oklahoma consumers.
This system of dual regulation is actually nothing more than requiring insurers to take an extra administrative step to ensure compliance with the ACA. Since Commissioner Doak refuses to enforce the ACA, Oklahoma health insurers will now have to submit policy information and other health insurance plan documentation directly to the federal government. CCIIO will confirm that insurers comply with ACA market reforms and will work with those found to be non-compliant.
For health insurance consumers in Oklahoma, there should be little concern with the federal government regulating health insurance plans. Even some on the right, in our state, have expressed a welcoming attitude in having the federal government enforce the ACA market reforms. Within Wyoming, another state where the federal government will be enforcing the ACA, the outlook for federal enforcement of the ACA is relatively positive.
The Oklahoma legislature could authorize Commissioner Doak to enforce the ACA in the future, but until that time the federal government will ensure that Oklahoma health insurance consumers are receiving the benefits and protections provided by the ACA.
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