"Just Saying Something's Covered Doesn't Make it So" by Lisa Kaplan Howe

The Connector staff spent much of their summer making technical changes and clarifications to the Minimum Creditable Coverage (MCC) regulations. Many of the proposed changes make important and beneficial changes: clarifying that coverage under out-of-state plans can satisfy the individual mandate and that Veterans Administration coverage satisfies the mandate, and ensuring that High Deductible Health Plans provide adequate coverage of basic health care needs to be deemed “creditable” by the state. However, one of the issues that the ACT!! Coalition will highlight in our testimony at today’s hearing is far from technical and it’s impact could be devastating.

From the start, the regulations have required that, to be considered creditable, a health plan must cover a “broad range of medical benefits.” With revisions to the regulations, the Connector has made clear that some of those services are “core services,” which cannot be limited by annual benefit caps or limited to an indemnity fee schedule. Cost-sharing for these services also must count toward the out-of-pocket cap. The core services are physician care, inpatient acute hospital care, day surgery and diagnostic tests.

The other “broad range” services, emergency services, maternity and newborn care, mental health services, prescription drugs and radiation and chemotherapy, can be subject to limitations on how much the plan will pay for the service in a given day or year and the cost-sharing need not count toward a plan’s out-of-pocket cap.

In dividing up medical care into the “broad range” group and the “core services” group, the revisions create a dangerous distinction. Taken too far, these limitations will make the coverage for these basic health care services illusory and create barriers to needed health care.

We fully expect that most plans will provide adequate coverage for consumers’ basic health care needs. And yet, we know that not all will. The following extreme limitations already exist in Massachusetts health plans today: a cap of $850 on coverage of diagnostic imaging services per year, despite the fact the average cost for just one MRI is $1890 and just one PET scan can cost as much as $6000; or a cap of $2,500 on hospitalization coverage per year, even though typically just one hospitalization will significantly exceed that amount. Another plan refuses to cover emergency room visits that do not result in inpatient admission. Each of those plans could be considered “creditable” by the state even though they leave people with woefully inadequate coverage for their health care needs.

The significant limitations that can be put on the coverage of services included in the “broad range” undercut the very coverage that the regulations seek to ensure and leave individuals with only the illusion of coverage. Consumers who think they have comprehensive coverage for their basic health care needs will be left to shoulder the much of the cost for these services fully out-of-pocket. Many will accrue significant medical debt, the leading cause of personal bankruptcy in the United States, as they struggle to pay for needed services. Others will go without needed preventive and life-saving health care they cannot afford. It is counter-intuitive to require coverage of these services only to permit that coverage to be undermined in this manner.

According to the regulations themselves, their purpose is “to provide individuals (and dependents) purchasing the coverage with financial access to a broad range of health care services…without incurring severe financial losses as a result of serious illness or injury.” Adequate standards for “creditable” plans guarantees that insured individuals have access to needed medical care and are not left underinsured. Adequate MCC standards also ensure that nobody is required to purchase insurance that has an affordable premium but doesn’t meet basic adequacy standards. By allowing certain benefits to be subject to unlimited exclusions and limitations, the Connector Board would be undermining their own standards. Requiring a service to be covered on paper doesn’t do you much good if the coverage is so lean that you can’t get access to the health care that you need.

Lisa Kaplan Howe is the Private Market Policy Manager at Health Care For All