Health Insurer Market Behavior after the Affordable Care Act: Assessing the Need for Monitoring, Targeted Enforcement, and Regulatory Reform

Abstract

The primary goal of the Patient Protection and Affordable Care Act (“ACA”) is to connect Americans with affordable, medically necessary health care. The first step toward achieving that goal is insurance expansion. The ACA’s first two years of insurance expansion have allowed millions of Americans to join the ranks of the insured. The second step recognizes that the content of health coverage matters, as appropriate insurance connects consumers with necessary care. The ACA therefore requires most plans offered in the individual and small-group markets to cover a slate of ten essential health benefits. There is a third necessary step in fulfilling the promise of the ACA, however. Once people are connected with insurance plans covering essential health benefits, it is vitally important that the plans deliver on the promise to provide necessary care in a timely, appropriate manner. The expanded health insurance markets, however, are built on the state-regulated, market-driven health insurance system that predated the passage of the ACA. Whether consumers fare well or poorly after the ACA will depend on the market behavior of the health insurers selling individual and small-group plans.

This Article focuses on four aspects of the market behavior of private health insurance plans that have historically caused concern: (1) contractual exclusions of certain categories of care from coverage, (2) utilization review and “medical necessity” judgments, (3) restricted provider networks, and (4) discrimination in plan design and administration. With regard to all four aspects, this Article contends that there continues to be a need for monitoring by advocates, federal and state regulators, and others, as well as for targeted enforcement, to ensure that the promise of the ACA is fulfilled. Information derived from monitoring and enforcement should in turn create a feedback loop enabling federal and state policymakers to determine where regulatory reform is needed.

Keywords: Affordable Care Act, ACA, PPACA, essential health benefits, medical necessity, contract exclusions, discrimination, parity, network adequacy, appeals. coverage denials, access to care. covered benefits