Health insurance isn't simple. Neither are government regulations. Put the two together and things can get confusing fast.
So it's not surprising that federal regulators took a stab at making things a bit more straightforward for consumers in new rules unveiled in late February and published Tuesday in the Federal Register. Because those rules are part of a 530-page, dizzying array of changes set for next year and beyond, here are three specific changes finalized by the Department of Health and Human Services that affect consumers who buy their own health insurance in one of the 38 states using the online federal insurance exchange.
1) Consumers could have access to more information about the size of the insurers' network of doctors and hospitals.
Most consumers care about two things: the cost of the plan and whether their doctor or hospital is in the plan's network. The new rules would require insurers to give consumers 30-days' notice when a provider is being removed from the network. They must also continue to provide coverage for that provider for up to 90 days for patients in active treatment, such as those getting chemotherapy or for women in the later stages of pregnancy -- unless the provider is being dropped for cause. Consumers will also see another change: The relative breadth of each plan's network will be noted with three size designations, which are roughly equal to basic, standard and broad.
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2) Consumers could be given slightly more warning about "surprise" medical bills from out-of-network providers.
One of the most common complaints from consumers -- even before the federal health law passed -- concerns bills they get from out-of-network providers. Such bills can hit consumers even when they go to facilities that are in an insurer's network because not all of the doctors and other medical staff in those facilities are part of the network. The new rules make a small change, requiring that amounts paid by consumers for ancillary care -- such as anesthesiology or radiology -- count toward their annual out-of-pocket maximum. That's important because once a patient hits that out-of-pocket maximum, the insurer is responsible for all in-network medical costs for the rest of the year. But the new rule only applies in cases where the insurer hasn't warned patients -- generally at least 48 hours before the hospitalization or procedure -- that they might receive care and bills from such out-of-network providers. Consumer advocates say insurers will simply issue form letters to as many patients as they can to avoid the rule, while insurers complain the rule doesn't get at the heart of the matter: the high charges they say are set by out-of-network providers.
3) Consumers' out-of-pocket costs could be more standardized.
This provision could be the rule's most substantive change. Regulators are requesting that next year insurers voluntarily offer plans with a standard set of coverage costs -- from deductibles to copayments for drugs or doctor visits.
The new rules aim to make comparison shopping easier. The change also gives a nod to a cost hurdle that may keep some consumers from enrolling: having to pay hundreds if not thousands of dollars in deductibles before some common services are covered. To entice those consumers, federal regulators created six standard plans that include specific flat-dollar copayments for urgent care visits, most prescription drugs, primary care, mental health and substance abuse treatment -- without the consumer first having to spend money to meet an annual deductible. "Insurers will have to compete head-to-head providing the same benefit package, one that most consumers will find fairly attractive," said Tim Jost, a consumer representative to the National Association of Insurance Commissioners and former law professor who writes widely on the health law.
Still, the standard copayments in plans will likely seem high for some consumers. For example, the bronze plan standard design sets a $45 copayment for a primary care visit and $35 for a generic drug prescription. Copayments are smaller in the standardized silver plans, which set a $30 flat rate for a primary care visit, $65 for a specialist, $15 for generic drugs, $50 for brand name products and 40 percent of the total cost for the most expensive type of drugs, deemed "specialty drugs." Those amounts are slightly higher than the average costs in silver-level plans sold this year, according to an analysis by consulting firm Avalere.
Insurers opposed the idea of standardized plans, saying they could stifle innovation, lead to higher premiums and make it less likely they will be able to create plans that appeal to a broad variety of consumers. Still, a handful of states, including California, Connecticut, Massachusetts, New York, Oregon, Vermont and the District of Columbia, have designed standardized plans that all insurers in the state marketplace are required to sell. But, because this part of the regulation is voluntary -- meaning the federal government is requesting rather than compelling insurers to make these changes -- it is unclear how much impact it will have on consumers and the marketplace.
So, in the next open enrollment period, consumers could see such standardized plans available in addition to the varied policies currently sold, which can have widely different payment packages. For example, one plan may have a lower deductible but higher out-of-pocket costs for doctor visits, while another might exclude certain office visits from the annual deductible, while a different option does not. Such variations have provided choice for consumers but also made comparing and contrasting plans difficult.
Meanwhile, HHS also finalized its annual increase in the cap on how much consumers can be charged out of pocket annually for such things as deductibles and copayments. The rule applies to those who buy their own coverage and many employers plans. Next year the cap will be $7,150 for an individual or $14,300 for family coverage.
(Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.)