Wednesday, February 19, 2014

While the overall goals of the Affordable Care Act are spot on, there are various unintended consequences.  As the Administration tries to fix some of these, others are left standing.  I think what people find frustrating is that there seems to be little transparency about the process and the standards by which some changes are permitted and some are not.  As is often the case, complaints arise not so much because of the decision that is made as the process by which it is made.

An example concerns a request by Massachusetts, summarized in a recent blog post by the Associated Industries of Massachusetts:

Massachusetts employers are living through a twisted version of Cinderella in which the federal fairy Godmother helps everybody but the one who needs to get to the Ball.

The ACA limits to four the rating factors used to calculate small group health insurance premiums, while current Massachusetts law allows for additional consideration of factors such as industry, participation rate, group size, intermediary discount and group purchasing cooperatives.

Governor Deval Patrick requested a rating-factor waiver on September 3, noting that “a waiver of rating factor requirements will avoid increases in health insurance premiums for a large segment of our small-employer population and their employees.” Secretary of Health and Human Services Kathleen Sebelius denied the request on September 26.

A study by health insurance companies indicates that the rating changes have raised or lowered rates for small companies by up to 57 percent, on top of average increases of 3.7 percent in their base insurance premiums.

The federal government has already granted more than 1,200 ACA waivers and made numerous administrative modifications to the law. Except on the rating factor issue.


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