Letter to HHS on the Interim Final Portions of the Regulations to Establish Healthcare Exchanges

Mr. Steve Larsen
Center for Consumer Information and Insurance Oversight
U.S. Department of Health and Human Services
Washington, D.C.

RE: Interim Final Portions of the Regulations to Establish Exchanges, CMS–9989–F

Dear Mr. Larsen:

Michigan Consumers for Healthcare respectfully submits the following comments to the Department oHealth and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) and the Center for Consumer Information and Insurance Oversight (CCIIO) in response to the interim final sections of the regulations establishing Exchanges, published in the Federal Register on March 27, 2012.

Michigan Consumers for Healthcare (“MCH”) is a coalition of more than 150 consumer health advocacy and community based organizations dedicated to access to affordable, quality healthcare through a successful, consumer-focused implementation of the Affordable Care Act in our state. Through our successful efforts to build a statewide coalition that reflects the diversity of our state, MCH is now positioned to reach more than five million healthcare consumers in Michigan—nearly half of the state’s population—regarding healthcare reform. Our membership continues to grow through vigorous, strategic recruitment efforts; it now includes organizations representing senior citizens, the disability community, numerous racial, ethnic, and religious groups, and historically underrepresented constituencies such as the LGBT community. As Michigan’s statewide consumer coalition dedicated to healthcare reform, we offer the following comments to ensure that the residents of our state receive the best possible consumer protections as Exchange regulations are finalized.

MCH recognizes and appreciates the work of CCIIO in responding to comments in the recent Exchange regulations. The final regulations are a positive, important step in implementing the Affordable Care Act and moving toward health coverage for all Americans.

MCH focuses our comments on areas of the regulations that are interim final to ensure consumer protections on these issues. However, we note our comments are offered in an uncertain environment in several respects. To date, Michigan’s legislature has failed to pass legislation to create an Exchange; indeed, it has not even authorized the use of federal establishment grant funding to begin planning for an Exchange.  As time passes and our legislature continues to delay, it appears more likely that Michigan will be one of the states that will be required to implement a Federally-facilitated or Partnership Exchange model. MCH is preparing for that contingency, but the lack of clear processes and standards from CCIIO to govern such Federally-facilitated and Partnership Exchange models hampers our efforts to analyze, adopt, and advance consumer-friendly policy positions and consumer outreach and education regarding these models. We take this opportunity not only to comment on the sections below, but also to urge CCIIO to move as quickly as possible to provide this guidance in the interest of consumer protection.

§155.220(a)(3) – Brokers and web-based brokers

The interim rule recognizes agents and brokers, specifically web-based agents, as potentially having an active role in marketing and selling Exchange products. While web-based brokers may play an important role in ‘spreading the word,’ about insurance, they also may create consumer confusion.  Because the population accessing the Exchange may have little or no experience with agents/brokers, it is necessary to avoid confusion requiring brokers or agents to post a disclaimer on their websites stating that they are not the official Exchange, and directing consumers to the Exchange website for actual enrollment. This disclaimer can also assist consumers who are acquainted with and have had negative experiences with web-based brokers in the past, and who consequently might avoid the Exchange unless they understand how and why it differs.

MCH is concerned that web-based brokers may promote some health products over others. This could create adverse selection and threaten the sustainability of the Exchange; in fact, it could completely undermine its success. Additionally, this selective promotion by brokers may confuse consumers and lead them to choose plans that are not in their best interests, placing their health and financial well-being at risk. CCIIO should provide clear rules to ensure brokers provide information on the full range of QHPs available to prevent brokers from steering consumes to certain plans based on brokers’ financial incentives. Web-based brokers should also be required to show information on plans’ quality ratings from HHS.

We applaud CCIIO’s decision in the final regulation to prohibit brokers from receiving compensation from enrollment in non-QHP plans while serving as a Navigator. This rule will help to protect consumers from being swayed to certain plans due to broker bias.   We would further recommend strengthening the interim regulation to ensure that, when agents and brokers assist with applications for financial assistance through the insurance affordability programs, they are held to the same high expectations required of Navigators.

In addition, we encourage CCIIO to create rules requiring that the Exchange have meaningful oversight of agents and brokers. While agents and brokers are required to register with the Exchange, it is not clear what consumer protections will be included as a result. States that allow agents and brokers to assist consumers should be required to develop rules specifying when, how, and what agents and brokers must disclose to consumers regarding financial compensation and conflicts of interest. Brokers and agents should also be required to meet privacy, conflict of interest, and training standards developed by the state. Finally, brokers should be held to standards for all members of a household, even if only some are eligible for QHPs. CCIIO rules reinforcing transparency and oversight will ensure that consumers are provided with impartial information and will support the viability of Exchanges.

Finally, there must be strong provisions in place to protect consumers from unwanted solicitation, scamming, and similar practices that are particularly associated with web-based commercial environments, as well as vigorous enforcement of these consumer protections through appropriate penalties, sanctions, and other legal measures.

§155.302 – Options for conducting eligibility determinations

With the new options for Exchanges to divide responsibility for eligibility determinations between agencies, HHS and states must ensure that the system remain seamless, so applications are not lost or slowed down as they move between different agencies. Consumers should sense no difference regardless of which entity makes the eligibility determination for affordability programs. To safeguard consumers, a state that bifurcates the eligibility process between agencies should be required by HHS to show that it has adequate data sharing and IT systems to coordinate the eligibility process between agencies. Based on the experience of states seeking to coordinate coverage between Medicaid and separate CHIP programs, “hand offs” between affordability programs can lead to eligible people falling through the cracks, even when states have the best of intentions. In Michigan, it was not until August 2010, that systems modifications were completed to allow an electronic interface between the Medicaid eligibility system and the MIChild contractor when a child was no longer eligible for Medicaid.  In addition, HHS should develop a monitoring and enforcement process to determine if states are performing adequately toward the goal of a seamless system of eligibility and enrollment.

§155.310(e) – Timeliness standards

For the system to work seamlessly and enroll consumers as quickly as possible in appropriate coverage, it is crucial that the eligibility process for an Exchange is designed to be as close to “real time” as available technology, integration, and data sources will allow. The regulations require Exchanges to make a determination “promptly and without undue delay,” which is not sufficiently specific. We are encouraged that HHS intends to develop a more specific standard in further guidance. In developing that standard, we urge HHS to aim for “real time” enrollment whenever possible, and when not possible, to set a maximum number of days that any individual application can take to be processed. We believe that a 30-day standard for both the exchanges and the Medicaid and CHIP agencies should be an exceptional limit, measured from the date of application to the final determination of eligibility, and only when electronic data are not available. Additionally, we call for the adoption of a stricter aggregate standard, one that would require the majority of applications to be processed in a very short period of time, but allow up to 30 days for a smaller percentage of outlier cases. All timeliness standards should apply equally to Medicaid, CHIP, and the Exchange so that eligibility is determined promptly and in a consistent timeframe across all programs.

§155.345(a) and §155.345(g) – Agreements between agencies administering affordability programs

The final regulations should ensure that agreements between the Exchange and Medicaid/CHIP agencies contain safeguards to ensure a seamless eligibility determination process, including those proposed in this interim provision, regardless of where an individual applies for coverage and what entity makes final determinations. As indicated above, we believe states should be required by HHS to show that they have adequate and tested data sharing and IT systems to coordinate the eligibility process between agencies and the Exchange, so that additional and unnecessary steps or efforts are not imposed on the consumers. Testing must incorporate rigorous consumer usability testing and evaluation, using a sufficient number of test subjects who reflect the demographics and characteristics of the population as whole, including those with disabilities.

Conclusion

We appreciate this opportunity to offer our comments on the sections above, and reiterate that CCIIO should release guidance and provide greater clarity on the processes and standards for Federally-facilitated and Partnership Exchange models, especially because it increasingly unlikely that Michigan and certain other states will pass consumer-friendly legislation to establish their own Exchanges in time to comply with statutory guidelines. In developing these standards, CCIIO must be mindful of placing consumer needs first by ensuring that all Exchanges operate seamlessly, rapidly, and without barriers to enrollment in appropriate coverage for the consumer. Finally, the structure of the Federally-facilitated and Partnership Exchange models must enable consumers to hold them accountable for providing high-quality and affordable healthcare coverage through transparent processes, robust consumer representation in Exchange governance, and coordination between stakeholders.

We thank you for your continued efforts and opportunities to provide consumer input.

Respectfully submitted,
Don