Health Law Tempers States' Insurance Mandates

Is that health service covered?

iStockphoto

For decades, states have set rules for health coverage through mandates. These laws require insurers to cover specific types of medical care or services.

The Affordable Care Act aims to curb this piecemeal approach to coverage by establishing minimum standards for insurance coverage in individual and small group plans nationwide and requiring states to pay for mandates that go beyond them.

States, however, continue to pass new mandates, but with a twist: Now they're adding language to sidestep the health law, making it tougher than ever for consumers to know whether they're covered or not.

State mandates vary widely. Some require coverage of broad categories of benefits, such as emergency services or maternity care, or of very specific benefits such as autism services, infertility treatment or cleft palate care. Others require that certain types of providers be covered, such as chiropractors. The requirements may apply to all individual and group plans regulated by the state, or they may be more limited.

While patient advocates view state mandates as a crucial tool in their efforts to address coverage shortcomings, the insurance industry generally opposes mandates, saying they drive up the cost of insurance.

Since the health law established a comprehensive set of "essential health benefits" that individual and small group plans must cover (unless they existed prior to passage of the law in 2010), it was hoped that mandates would no longer be much in demand, says Sabrina Corlette, project director at Georgetown University's Center On Health Insurance Reforms.

Mandates are "not the most rational way to build a benefit package," says Corlette.

To discourage states from passing mandates that go beyond essential health benefits requirements, the law requires states, not insurers, to cover the cost of mandates passed after 2011 that apply to individual and small group plans sold on or off the state health insurance marketplaces. If a mandate increases a plan's premium, states will be on the hook for the additional premium cost that's attributable to the mandate.

The payment requirement is waived until 2016, says Kelly Brantley, a senior manager at Avalere Health.

Rather than forgoing mandates altogether, some states are simply excluding from the mandates plans that the states would have to pay for. The result: Consumers who buy individual or small group plans may not get the mandated benefits that are required in large group plans. (Self-funded plans, used by many large employers to pay employee claims directly rather than buying insurance for that purpose, aren't bound by state mandates.)

That's what's happening with state mandates related to autism coverage, says Lorri Unumb, vice president of state government affairs at Autism Speaks, an advocacy group.

By the group's count, 37 states and the District of Columbia have mandates requiring autism coverage. In 26 states, autism coverage is part of the essential health benefits, typically because coverage was mandated before 2012 and so was included in that state's "benchmark" plan that sets the standard for coverage there.

New mandates are different. "For the most part, the states that have passed autism mandates post Dec. 31, 2011, have excluded ACA-compliant plans from the mandate," Unumb says.

States have taken different approaches to structuring new mandates so they don't have to pay for them, says Justin Giovannelli, a research associate at Georgetown's Center on Health Insurance Reforms. The law may say that the mandate only applies to large group plans, for example, or that it doesn't apply to any plans that are required to provide the essential health benefits. A state may say that if the mandate increases premiums by a certain percentage the provision doesn't apply.

Confused? Policy experts fear consumers will be too.

"Your state has passed a law but everything is so market specific it's hard to know what coverage you're getting," says Katie Keith, research director at the Trimpa Group, a consultant for autism and other advocacy groups.