A physician has not taken office as Health and Human Services secretary since 1989, when Georgia’s Dr. Louis Sullivan was chosen by the first President Bush. Now another astute Georgia physician, Congressman Tom Price, is the nominee. Price brings the background of being a medical provider, understanding patient care and knowing how government action impacts the affordability of health care services.
Much of the discussion about the ACA has centered around the legislative kabuki required to reform it. But as President Trump has already shown, swift action can be taken to address the ACA through executive order, just as executive orders were used in the previous administration to shape how the law was implemented. The pen may be more powerful than the legislative process.
Many of the most impactful parts of the Affordable Care Act were decided on a Washington whim, by agency bureaucrats, resulting in a slew of regulations. In coordination with the president, Price, once confirmed, could immediately push forward regulatory reforms that would strengthen Georgia’s health insurance market on Day 1.
The three are: 1) Encourage Continuous Coverage 2) Reclassify Agent Commissions under MLR Rule 3) Return Insurance Regulation to the states.
1) Continuous Coverage Drives Competition:
Continuity of coverage is critical to the success of any reform. Current projections estimate 580,000 Georgians will sign up for coverage through the January 31 open enrollment. Unfortunately, abuse of special enrollment periods (SEPs), allowing sign-ups outside of open enrollment, have contributed to significant financial losses by Georgia’s insurance carriers, leading to reduced competition in the individual market.
“Life happens,” as the saying goes, but the SEPs intended to address people’s unforeseen problems have been abused. Every year, HHS has expanded “exceptional circumstances” for SEPs beyond major life events. This has allowed too many individuals to get coverage outside of open enrollment, receive health care services, then drop coverage. And SEP enrollees spend more than those with continuous coverage, especially on high-cost drugs. The abuse of SEPs should stop on Day 1.
2) Reclassify Agent Commissions under MLR
The Medical Loss Ratio (MLR) requirement states that 80 percent of all premium dollars must go to medical care, and 20 percent for administrative costs. But through rule-making, HHS negatively affected access to insurance agents by including the agents’ commissions among administrative costs. Individuals shopping on the exchange, the self-employed and Georgia’s small businesses often rely on agents to give advice and recommend the right plan. Health plans want to continue to partner with agents, and MLR reclassification of their commissions can happen on Day 1.
3) Return Insurance Regulation to the States
Congressman Price has been quoted as stating, “the problem I have with Obamacare [the ACA] is that its premise is ‘Washington knows best.’ ” These comments have been echoed by Georgia Insurance Commissioner Ralph Hudgens, in a recent letter to congressional leaders. Health care is delivered locally, and health insurance companies manage networks with local providers. Rate review, benefit design and consumer protection are best managed not by officials in Washington, but by our state’s insurance commissioner, who has to face the voters every four years. Let’s allow local leaders the flexibility to work with insurers to design the best solutions for Georgia citizens. These three reforms can happen on Day 1.
Graham Thompson is the executive director of the Georgia Association of Health Plans (GAHP), the leading state trade association representing the health insurance industry.