Last Updated 3/2/2023
Issue: Despite efforts in recent years to stabilize health insurance markets, challenges remain in the areas of coverage affordability and consumers' access to needed care. This is due to the underlying costs of health care rising much faster than other goods and services. National health care expenditures now represent 19.7% of the gross domestic product, and they are expected to continue to grow. While seniors are largely protected by Medicare, costly long-term care (LTC) services remain outside of the program's benefits.
Background: The federal Affordable Care Act (ACA) aimed to: 1) improve the rate of health insurance coverage, especially for vulnerable populations; 2) increase the value of coverage through market reforms; and 3) limit cost growth by encouraging health insurers to compete on price and quality. ACA provisions (e.g., guaranteed issue, community rating, the prohibition on pre-existing condition exclusions, and premium subsidies) have brought unprecedented access to individual market coverage to many. At the same time, both compliance with ACA regulations and limited competition in some areas have driven premiums and cost sharing to unaffordable levels for those who do not receive subsidies or have access to other coverage. The federal Centers for Medicare and Medicaid Services (CMS) has reported that insurer exits and rising premiums have priced out those who do not qualify for tax credits or have access to coverage through employers. According to the CMS, unsubsidized enrollment dropped by 9% and subsidized enrollment decreased by 1% from plan years 2018 to 2019.
Status: In 2022, the NAIC continues to provide nonpartisan expertise to the U.S. Congress (Congress) and the Administration, particularly on equity considerations and the differential impact on underserved populations. The NAIC's committees will continue their work to develop model policies and highlight best practices on health care cost control. This includes reviewing long-term care insurance (LTCI) premiums, regulating pharmacy benefit managers, promoting telehealth, and educating consumers on health insurance and their coverage options.
The Health Insurance and Managed Care (B) Committee will examine factors that contribute to rising health care costs and insurance premiums and review state initiatives to address cost drivers. It will also collaborate with the Market Regulation and Consumer Affairs (D) Committee on consumer protection, producer licensing, antifraud efforts, and the monitoring of health plans not regulated under the ACA; i.e., AHPs and STLD plans. The Consumer Information (B) Subgroup plans to develop a series of resources to help consumers understand their coverage and get the most value from their plans. The Health Insurance and Managed Care (B) Committee is also carefully monitoring health insurance issues related to the COVID-19 pandemic including telehealth, rate requests, and continuation of coverage for those losing employer-sponsored coverage.
The Center for Insurance Policy & Research (CIPR) published a report detailing the potential for telehealth to reduce health disparities by surmounting barriers in access to care. This study reveals that the limitations in broadband access and digital literacy will meaningfully limit efforts to increase access to care through telehealth.
Committees Related to This Topic
Alternative Payment Models, Value-Based Payments, and Health Disparities August 2022, CIPR Report
Why Do Small Firms Offer Health Insurance in Spite of the Employer Mandate Exemption? 2022, Journal of Insurance Regulation
Trends in Telehealth and Its Implications for Health Disparities March 2022, CIPR Study
CIPR Consumer Health Insurance Knowledge Survey October 2020, CIPR Study
Guaranteed Renewability in Health Insurance: Taking into Account Changes in Risk Status and the Cost of Dying August 2020, Journal of Insurance Regulation (JIR) (Article Overview)
Assessment of COVID-19 Recession on Health Insurance Coverage Enrollments June 2020, CIPR Study
Special Enrollment Periods For Health Insurance Marketplaces June 2020, CIPR and Wisconsin School of Business
Reinsurance in Healthcare
December 2019, CIPR Regulator Insight
CIPR Health Care Cost Brief August 2019, CIPR Study
CIPR Health Care Cost Drivers Study - Third Installment August 2020, CIPR Study
CIPR Health Care Cost Drivers Study - Second Installment August 2019, CIPR Study
Rising Health Care Costs: Drivers, Challenges and Solutions December 2018, CIPR Study
A Brief Exploration of Rising Health Care Costs August 2018, CIPR Newsletter
Drivers of 2019 Health Insurance Premium Changes Issue Brief June 2018, Academy of Actuaries (AAA)