Healthcare coverage in the U.S. is highly decentralized, with multiple coverage markets, including employer-sponsored insurance, Medicare, Medicaid and the individual market. While there are and continue to be distinct differences in the ways Medicare, Medicaid and the individual market are regulated, there is increasing regulatory alignment, particularly among those primarily regulated by the Centers for Medicare and Medicaid Services (CMS) and/or states. Several factors are encouraging this growing trend toward alignment:
- More individuals transition among different types of coverage throughout their lifetimes. The Affordable Care Act (ACA) increased healthcare coverage options by expanding Medicaid, eliminating rating rules by health status in the individual market, and subsidizing coverage for certain individuals in marketplaces or exchanges. With these changes in place, most people are now eligible for some type of healthcare coverage. Given the number of increased options and the frequency with which people change employers and experience income fluctuations throughout a lifetime, many people find themselves transitioning between employer-sponsored coverage, Medicaid, individual market coverage and, as they reach 65, Medicare. Some, known as the dual eligibles, may even have both Medicare and Medicaid at the same time. In addition, members of the same family may be enrolled in different types of coverage concurrently.
- Insurance coverage has grown through public programs. The percentage of Medicare and Medicaid beneficiaries enrolled in Medicare Advantage (MA) and Medicaid managed care respectively has been growing. Currently, 31 percent of Medicare beneficiaries are in MA, and as baby boomers age into Medicare, MA enrollment is likely to surge. More than 70 percent of Medicaid beneficiaries are in managed care, with several states considering moving more of the long-term beneficiaries and/or services under managed care plans.
- Health insurance companies sell products in multiple markets. Increased insurer participation in Medicare, Medicaid and the individual market has led to more insurance companies offering coverage in two or more major markets.
All of these factors have led to an increased focus on aligning the regulatory rules. A quote from Marilyn Tavenner, American Health Insurance Plan’s (AHIP’s) CEO and CMS Administrator captures the issues: “One day I might be in employer-sponsored coverage. The next day I might be in Medicaid. The next day I might be in an exchange, and ultimately I’m going to be in Medicare. I shouldn’t have to relearn how the world works every time I move from payer to payer. The payers feel this way as well.”
Evaluating Provider Networks
The current Administration has made a point of attempting to align the regulatory rules where possible, as recently noted in the Medicaid managed care final rule and the MA call letter. We are starting to see this attention to alignment across a variety of elements, including quality measures, consumer transparency, appeals processes, and, particularly, the evaluation of provider networks.
Network adequacy is a hot topic across the coverage programs for many reasons. A key reason is the focus on narrow networks. Marketplace plans tend to have more narrow networks than employer-sponsored insurance. An Avalere study found that QHP (Qualified Health Plan) networks were typically two-thirds the size of employer-sponsored insurance networks. This discrepancy is likely due to the emphasis on premiums. Surveys of enrollees have found that most are ranking costs as more important than network size in their choice of plans. A May 2015 Kaiser Family Foundation survey of the individual market found that 82 percent of enrollees listed cost as very important compared to 60 percent for networks.
Because individuals transition between coverage and/or plans often, ensuring continuity of care is another reason that network adequacy is a critical issue. Being able to switch plans becomes important as personal factors, such as age and employment, change. Consumers often want the option to keep the same providers even if their insurance coverage changes, and for those with severe health conditions, maintaining care regimens is vital.
Up-to-date provider information is a way for consumers to ensure continuity of providers while shopping for new coverage options. CMS strengthened provider directory requirements for QHPs, requiring up-to-date provider directories to be available online and in machine readable formats for those in the federally-facilitated marketplace. In its May 2016 rule, CMS strengthened Medicaid managed care requirements to a similar standard. In addition, in the April 4, 2016 MA call letter, CMS indicated that revisions to the Medicare provider directory requirements are forthcoming to better align with Medicaid managed care and QHP requirements.
Finally, the ACA requires increased protection for in-network cost sharing with a cap on in-network out-of-pocket costs for both QHPs and employer-sponsored insurance, but protections are limited for out-of-network cost sharing. Surprise billing, usually described as when a patient chooses to have a covered service provided by an in-network provider but receives care from an out-of-network provider without his or her knowledge or consent, remains an issue.
There are some protections at the federal level, but for now the states are leading the way, with a variety of initiatives and approaches being adopted across the country. As state policies protecting consumers of different types of insurance become more ubiquitous throughout the nation, federal policies around out-of-network protections will eventually catch up and are likely to continue driving toward alignment across Medicaid managed care, MA, and the marketplace.