Health policy innovation was a top priority during 2020 legislative sessions, with states enacting more than 75 bills aiming to ensure that health care is accessible and affordable. While a number of these innovations responded to the COVID-19 pandemic, others focused on promoting a more efficient and effective health care system, broadly.
Many of the bills addressed high health care costs to consumers—long a priority for state policymakers—by targeting surprise billing, health insurance marketplaces, consumer protections and price transparency, among other topics.
Protecting consumers from surprise medical billing—when patients are unknowingly charged the difference between what the provider bills and their insurer pays—is rapidly gaining bipartisan support. This year, Indiana, Georgia and, most recently, Michigan (HB 4459 and HB 4460) joined 29 other states in providing consumers relief from these charges, also known as balance billing. Surprise-billing protections will likely remain a priority in the coming year, especially in light of the pandemic.
Marketplace Stabilization and Reforms
Insurance coverage gains have stalled across the U.S. since 2016—and the pandemic may have broader implications when it comes to the uninsured rate. Consequently, many states are pursuing policy solutions to increase access to coverage options through the Affordable Care Act’s individual and small-group marketplaces.
Colorado and New Jersey established assessment fees on certain health insurers to fund reinsurance programs and state-based premium subsidies to certain ACA health plan enrollees. The ACA previously included this assessment on health insurers, but federal lawmakers permanently repealed it in 2019.
Colorado also passed legislation establishing an “easy enrollment program,” which allows uninsured individuals to indicate on their tax returns whether they want the state’s health insurance exchange to determine whether they qualify for free or subsidized care. Maryland put a similar program in place at the beginning of 2020.
Maine lawmakers tackled small-business health insurance costs by requiring the state to merge its individual and small-group marketplaces by 2022 and extend its reinsurance program to small-group plans (given federal approval).
While marketplace premiums for benchmark silver plans decreased in 2020, premiums are still costly for some individuals who are not eligible for ACA subsidies. The Trump administration endorsed expanding certain coverage alternatives, including Association Health Plans (AHPs) and Short-Term Limited Duration (STLD) Health Plans, that were intended to give states flexibility to address affordability. But these plans may offer less comprehensive coverage as they do not have to provide certain consumer protections that apply to the individual marketplaces.
For example, in 2020, Indiana SB 184 authorized the Indiana Farm Bureau to provide health benefit coverage for members and their families. The legislation specifically states the benefit coverage is not insurance, thus exempting the plan from state insurance regulations and federal ACA standards.
Recognizing concerns around consumer protections, some states also acted to limit such plans. Virginia SB 404 reduces the maximum allowed term of STLD plans from 364 days to three months and restricts their sale during ACA open enrollment.
ACA Consumer Protections
At least 19 states have enacted legislation since 2018 codifying some of the ACA’s consumer protection provisions into state statute. Four of these states—Arizona, California, Maryland and Virginia—passed legislation in 2020.
Consumer protection provisions include prohibiting insurers from varying premiums based on an enrollee’s health status, requiring coverage for the ACA’s 10 essential health benefits and various other protections. Some states codified one or two of these provisions, while others incorporated several into statute. In some states, including Arizona, Florida and Louisiana, consumer protection laws do not go into effect unless the Supreme Court overturns or federal lawmakers repeal the ACA.
Data suggests that most of the growth in health care spending in recent years can be attributed to increases in the costs of hospital, physician and clinical services. State and federal policymakers are leveraging health care price transparency as a potential strategy to curb rising health care costs. Price transparency takes many forms, but the overall intent is to increase consumer knowledge of health care prices. Though limitations may exist as consumers may struggle to shop for health services due to the complex nature of the health care system, or not seek out pricing information.
For example, Georgia SB 303 (2020) aims to provide greater price transparency for non-emergency services with the disclosure of certain pricing information through insurer websites to allow consumers to compare costs.
Heading into the 2021 legislative sessions, the costs of health care—a perennial issue for both individual consumers and the broader health system—will likely remain a top policy priority for the states, especially as the COVID-19 pandemic continues.
Jack Pitsor is a research analyst, and Samantha Scotti and Colleen Becker are senior policy specialists in NCSL’s Health Program.