Some states have told CMS they lack legal authority, or are otherwise unwilling, to enforce the Affordable Care Act’s market-reform provisions that kick in next year. AIS’s Health Reform Week (HRW) discussed the situation with Katie Keith, J.D., assistant research professor at the Georgetown University Health Policy Institute’s Center on Health Insurance Reforms. She is co-author of a Commonwealth Fund report that found few states so far have enacted new legislation to oversee the ACA’s market reforms. Below are excerpts from the second half of the interview. The first half ran April 5.
HRW: If the feds have to enforce the ACA, what does that mean for resolving consumer complaints, as well as the implementation of the law?
Keith: I think it’s important to note that the law will be enforced one way or another— either by the states or the federal government. But what we heard in our conversations with state regulators is that there’s a real interest in keeping enforcement at the state level. This is because state regulators have a long history of performing enforcement functions, working with the insurers in their state, and responding to consumer complaints.
Further, if most states enter into collaborative arrangements with CMS, consumers may not know the difference between who is enforcing (the state versus CMS) and are likely to continue to report their complaints to the state insurance department. In turn, state regulators could rely on federal enforcement if unable to achieve voluntary compliance from the insurer. In contrast, if CMS is directly enforcing the reforms in a state, consumers may be referred to CMS to resolve complaints. This runs the risk of being confusing or complicated for a consumer but it is too early to tell what effect this will have on successful implementation of the law.
If states do take on this responsibility, will they have sufficient resources and manpower for adequate enforcement?
We did not hear this concern raised by many state regulators, probably because the states have long been the primary enforcers of health insurance in the individual and small group markets. But, because many of the products for the 2014 plan year must be created anew (for example, to incorporate new requirements such as the essential health benefits package), state regulators in at least some states indicated that they were likely to have to review a higher volume of documents than they typically have in the past and that they were building in new processes, such as reviewing plans to make sure that the benefits are not designed in a discriminatory manner
What are the other implications?
While much emphasis has been on the new exchanges, the 2014 market reforms apply to coverage in these markets both inside and outside the exchange. Thus, states will continue to have a significant role regulating the “non-exchange” market even in states where the federal government is running the exchange. The takeaway is that if a state doesn’t have the full authority it needs to regulate, it could mean that — unless the state passes new legislation or enters into a collaborative agreement with CMS — the federal government runs the exchange and enforces the reforms outside the exchanges too.
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