CAHC Comment Letter on Extending Grandfathered Plans in the Group Market

CENTERS FOR MEDICARE & MEDICAID SERVICES
DEPARTMENT OF HEALTH AND HUMAN SERVICES

ATTENTION: CMS-9923-NC

Thank you for the opportunity to provide comments on the issues surrounding grandfathered plans in the group market. These plans provide valuable coverage options for many consumers and business owners. While the RFI focuses on the group market, the issues are similar in the individual market and we will take the opportunity to discuss both in these comments.

The Council for Affordable Health Coverage (CAHC) is a broad-based alliance with a singular focus: bringing down the cost of health care for all Americans. Our membership represents a broad range of interests – organizations representing small and large employers, manufacturers, retailers, insurers, patient groups, and physician organizations. As a result, these comments reflect the positions of CAHC, but may not necessarily reflect the individual views of all members.

Since at least the early 1990’s, states have protected consumers and business owners from plan cancellation through guaranteed renewability provisions in state laws, and, in 1997, HIPAA duplicated the approach in federal law. As a result, consumers had assurances that once they bought coverage, they could keep it. Unfortunately, the ACA has made that much more difficult with overly restrictive guaranteed availability rules. This was more so based on interpretations from the prior administration that made it more difficult for insurers to maintain coverage for consumers in grandfather plans.

As you note in the RFI, the number and percentage of consumers in grandfathered policies continues to fall. In the individual market, some of that is explained by the natural churn of the market. Most consumers only stay in the individual market for less than 5 years. Employers on the other hand may keep their coverage longer. Consumers and employers have kept their grandfathered plans for a reason. In some cases, it might be the grandfathered plan is much more affordable than a similar ACA plan. In other cases, the grandfathered plan may include broader provider networks or benefits that are no longer available in the individual or group health insurance market. As a result, for many consumers keeping their grandfathered plan is an affordability and access necessity.