HHS Notice of Benefit and Payment Parameters for 2015 under the Patient Protection and Affordable Care Act: Final Rule
Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS), March 11, 2014
This final rule sets forth payment parameters and oversight provisions related to the risk adjustment, reinsurance, and risk corridors programs; cost sharing parameters and cost- sharing reductions; and user fees for Federally-facilitated Exchanges. It also provides additional standards with respect to composite premiums, privacy and security of personally identifiable information, the annual open enrollment period for 2015, the actuarial value calculator, the annual limitation in cost sharing for stand-alone dental plans, the meaningful difference standard for qualified health plans offered through a Federally-facilitated Exchange, patient safety standards for issuers of qualified health plans, and the Small Business Health Options Program.
Final rule (335 pages): http://www.ofr.gov/OFRUpload/OFRData/2014-05052_PI.pdf
Any major legislation, once enacted, must then be subjected to a rule making process to have guidelines by which to administer the law. Legislation as complex as the Affordable Care Act (ACA) is expected to have an extensive set of rules, but this 335 page final rule on just a few aspects of the legislation demonstrates how unnecessarily complex ACA is.
The rule on risk adjustment, reinsurance, and risk corridors is a good example. Risk adjustment transfers funds from insurers who enrolled lower-cost, healthier individuals to insurers who had higher expenses because their enrollees had greater health problems (an almost impossible task to do fairly). Reinsurance is paying insurers a portion of their losses if they had higher than expected expenses for their enrollees. Risk corridors establish two levels of spending – one below which profits are excessive and the other above which losses are excessive – levels used to protect against inaccurate initial rate setting by the insurers.
The final rule is highly complex, which is not surprising since it is difficult to adjust for fairness after health care losses have occurred. It should be obvious that this administrative complexity is not to protect patients, but rather it is to protect the insurers. In fact, much of the profound complexity of ACA was based on making reform work for the insurers while sacrificing policy improvements that would be designed to work best for patients.
Under a single payer system, risk adjustment, reinsurance, and risk corridors would not even be necessary since you would not have competing private insurers that are each trying to game the system.
If you really want to understand better how our politicians selected the wrong model for reform, read the 335 pages of this final rule. Then read the thousands of other pages of final rules that also apply to ACA.
Yes, there would be rules under Improved Medicare for All, but they would be administratively efficient rules selected to make the system work better for patients, not for private insurers.