The Kaiser Family Foundation (KFF) has published a report entitled “Comparison of Consumer Protections in Three Health Insurance Markets: Medicare Advantage, Qualified Health Plans and Medicaid Managed Care Organizations.” The report is authored by Center Senior Policy Attorney David Lipschutz, former Center Policy Attorney Andrea Callow (now at Families USA) and Karen Pollitz, MaryBeth Musumeci and Gretchen Jacobson at KFF.
The report examines similarities and differences in federal consumer protection standards for these three programs that provide insurance coverage through private plans, including eligibility, enrollment, renewability, benefits, cost-sharing and other issues. In some instances, the different set of rules across the three markets can be easily explained; for example, differences in allowable cost-sharing reflect different statutory requirements. However, the rationale for other differences – such as minimum coverage standards for prescription drugs, network adequacy standards, appeal rights when claims are denied, and the circumstances under which an enrollee may change plans mid-year – is less clear.
The paper urges further exploration of whether the different set of rules for plans that provide coverage to Medicare, Affordable Care Act/Marketplace and Medicaid enrollees are in the best interest of consumers, plans, and the federal government. Individuals can, and do, move between these different sources of coverage, sometimes within the same calendar year. This leads to confusion if their rights and protections shift abruptly following an enrollment change. At the same time, the report asserts that it is important to not dilute existing consumer protections for the sake of achieving uniformity, particularly where strong provisions are in place and needed to safeguard vulnerable populations.
Read the Executive Summary Below. The full report, along with a comprehensive chart, is available on the KFF website at: http://kff.org/medicare/report/comparison-of-consumer-protections-in-three-health-insurance-markets/.
Executive Summary: Comparison of Consumer Protections in Three Health Insurance Markets: Medicare Advantage, Qualified Health Plans and Medicaid Managed Care Organizations
Private plans that provide health coverage to people with Medicare or Medicaid, and in the new Marketplaces collectively serve more than 70 million Americans as of January 2015 – and the numbers are on the rise.[i] These plans – Medicare Advantage plans, Qualified Health Plans (QHPs) and Medicaid Managed Care Organizations (MCOs) – operate under rules established by the federal government, many of which are designed to ensure that enrollees have access to coverage and the full scope of benefits and providers to which they are entitled. The rules for plans in each of the three markets differ, even though each market is overseen and regulated, to some degree, by the same federal agency, the Centers for Medicare and Medicaid Services (CMS). In addition, Medicaid MCOs and QHPs may be subject to more stringent consumer protection standards established and enforceable by the state in which they operate. This report examines similarities and differences in federal consumer protection standards for Medicare Advantage plans, QHPs, and Medicaid MCOs. It focuses on rules established at the federal level, though some states have chosen to go above the federal minimums and impose additional requirements for QHPs and Medicaid MCOs.
These three insurance markets were created at different times, for different purposes and for different populations, and to some extent, the different set of rules in which plans operate reflect this diversity. While Medicare is a purely federal program, Medicaid is a joint federal/state program, and the Marketplaces are subject to minimum federal standards but can be administered by either states or the federal government, or the two in partnership. Medicare was designed to serve people ages 65 and older, and younger people with disabilities, without regard to income. Medicaid is a program for individuals with low-incomes and also is a major source of coverage for people with disabilities. The Marketplaces were created to provide insurance to non-elderly people without access to other sources of coverage. The consumer protections now in place for both Medicare Advantage and Medicaid MCOs have evolved over time, and in response to issues that have emerged over many years. The rules for Marketplace plans are relatively new, developed and implemented following enactment of the Affordable Care Act.
Our comparison of the federal consumer protections requirements for Medicare Advantage, QHPs and Medicaid MCOs, finds some similarities across the three markets, as well as several notable differences that could have important implications for consumers (See Table ES-1). In some instances, the different set of rules across the three markets can be easily explained; for example, differences in allowable cost-sharing reflect different statutory requirements. However, the rationale for other differences – such as minimum coverage standards for prescription drugs, network adequacy standards, appeal rights when claims are denied, and the circumstances under which an enrollee may change plans mid-year – is less clear.
While beyond the scope of this paper, further work is needed to explore whether the different set of rules for plans that provide coverage to Medicare, Marketplace and Medicaid enrollees are in the best interest of consumers, plans, and the federal government. Many insurers operate in all three markets – so inconsistencies in applicable standards can add to administrative burden. In addition, individuals can and do move between these different sources of coverage, sometimes within the same calendar year, and may also be confused, if their rights and protections shift abruptly following an enrollment change. At the same time, it is important to not dilute existing consumer protections for the sake of achieving uniformity, particularly where strong provisions are in place and needed to safeguard vulnerable populations. Analysis of the reasons for and impact of some of these differences could inform whether more consistency across programs would be helpful.
[i] See Kaiser Family Foundation Medicare Health and Prescription Drug Plan Tracker for Medicare Advantage Enrollment, available at http://kff.org/data-collection/medicare-health-and-prescription-drug-plans/ Kaiser Family Foundation State Health Facts for Marketplace Enrollment, available at http://kff.org/other/state-indicator/state-marketplace-statistics-2015/ Kaiser Family Foundation Medicaid Managed Care Tracker for Medicaid Managed Care Enrollment, available at http://kff.org/medicaid/state-indicator/total-medicaid-mc-enrollment/