Navigating the health insurance exchanges: will state regulations guide consumers or chart them off-course?

• Author: Dunham, Kirsten

INTRODUCTION

One of the goals of the Patient Protection and Affordable Care Act ("ACA") is to increase access to quality affordable health care. (1) One significant building block of universal coverage is the health insurance exchange or marketplace, which is meant to create a large pool of enrollees who share the risk and make health insurance more affordable than the individual market, state high risk pools, or paying 100% of premiums under the Consolidated Omnibus Budget Reconciliation Act ("COBRA") after leaving or losing employment. Because a large pool is necessary, high enrollment in the health plans on the exchanges is crucial. The ACA required exchanges to establish a navigator program to provide information and assistance to consumers. This was not so different from the programs developed to assist Medicare recipients in reviewing, evaluating, and enrolling in prescription drug plans. (2)

The political battles over the ACA's passage and implementation have been constant and have not excluded the exchanges and navigator programs. As the federal government moved towards full implementation in January 2014 and the Supreme Court upheld the constitutionality of the ACA's mandate, some states began planning for a state-based exchange while other states opted for the federally-facilitated exchange. Many states that showed no interest in passing legislation to establish a state exchange were willing to pass state licensure requirements for navigators operating in the federal exchanges. Although such legislation is introduced in the name of consumer protection, ACA supporters view the laws as one more attempt to block the successful implementation of health reform.

Missouri has been an active state in response to the ACA since the moment President Barack Obama signed it into law. State citizens have twice passed ballot measures limiting implementation of the ACA, and the Missouri legislature has passed a state navigator licensing law.

This Comment examines the navigator program in the ACA and the political and legal issues surrounding state navigator licensure laws. To provide context, Part I outlines the legislative and legal background of the ACA at the federal level and in Missouri. Going into more detail on the navigator program, Part II first examines the federal regulations as they relate to the requirements of exchanges, the types and functions of consumer assistance programs, and the role of insurance agents and brokers. Part II then analyzes Missouri's state navigator licensure law and regulation.

To help the reader get a picture of the interested stakeholders and their positions, Part III looks at the participation and interests of insurance agents, state lawmakers, and consumer advocates in supporting or halting the state navigator licensure laws. Part IV analyzes similar licensure laws in other states, providing a sense of the trends and commonalities in states that oppose the ACA. Part V questions the legality of some of these state laws by reviewing several lawsuits and analyzing what the Eighth Circuit Court of Appeals might consider in the appeal of a lawsuit enjoining the Missouri law. Finally, this Comment looks at the on-going efforts in Missouri to impose additional state requirements on navigators and makes recommendations to protect consumers without interfering with the navigators' duties under the ACA.

This Comment concludes that rather than passing legislation that is legally questionable, duplicative of federal navigator certification requirements, and protective of certain interest groups, states with federal exchanges should either accept the federal navigator regulations as adequate or establish reasonable licensure requirements that supplement rather than duplicate federal certification and that do not prevent the implementation of the ACA.

PART I: ACA LEGISLATIVE AND LEGAL BACKGROUND

1. Federal Level--The Affordable Care Act

   1. Patient Protection and the Affordable Care Act: General Background

      The ACA was enacted on March 23, 2010. (3) After multiple attempts over the course of several generations to craft national health reform legislation, Congress finally passed sweeping legislation that addressed health care access, quality, and cost. (4) The goals of the federal law include quality, affordable health care, (5) expansion of public health programs, (6) increasing the efficiency of health care delivery, (7) improving public health, (8) building the health care workforce, (9) transparency and disclosure requirements for physicians and nursing homes, (10) "improving access to medical therapies," (11) and creating a public long-term care insurance program. (12)

      Several states, along with the National Federation of Independent Businesses, challenged the constitutionality of the individual mandate in the ACA. (13) The Supreme Court held that Congress did not have power under the Commerce Clause or the Necessary and Proper Clause to force people to engage in an activity by regulating "inactivity," (14) but the individual mandate is constitutional as a tax on individuals who do not purchase health insurance. (15) The Court held that the fine was a tax and not a penalty because the fine was low, there was no scienter requirement, and the fine was collected by the IRS. (16)

   2. Health Insurance Exchanges: ACA's Goal to Increase Access for the Uninsured

      One means used to increase access to quality, affordable health care was to establish health benefit exchanges, or marketplaces, that offer "qualified health plans," which uninsured individuals can choose based on information concerning quality and price. (17) Consumers choose a bronze, silver, gold, or platinum plan based on the amount of coverage they need and how much cost-sharing they are willing to assume. (18) Participants in the exchange may also be eligible for premium assistance tax credits, (19) cost-sharing reduction, (20) or public programs like Medicaid. (21) The exchanges must provide information to enrollees about these programs and screen applicants for eligibility. (22)

      The ACA gave states flexibility to implement and operate state health insurance exchanges that "facilitate[] the purchase of qualified health plans." (23) The law directed the Secretary of Health and Human Services ("HHS") to establish a federally-facilitated exchange ("federal exchange") in the event that a state elected not to establish an exchange, the state exchange would not be operational by January 2014, or the state's proposal did not meet the requirements of the ACA. (24) In establishing the guidelines for the federal exchange, HHS designed another option, the "State Partnership Exchange," which provides states the ability to give input on the federal exchange and play a role in the areas of in-person assistance, plan management, and outreach. (25) This hybrid model provides a bridge for states that were working towards establishing a state exchange, or a permanent system for states that want to maintain some involvement without assuming the full responsibility of the exchange. (26)

   3. Navigators: ACA's Goal to Provide Consumer Assistance

      Consumers must make several decisions regarding health insurance based on factors such as their health care needs, income, and tolerance for risk. In addition, consumers may qualify for the various assistance programs available under the ACA. (27) Selecting a qualified health plan that meets an individual's or family's needs is a complex decision that requires some amount of knowledge about health care and finances. Low health literacy decreases an individual's capacity to understand and process information about health care and services. (28) Therefore, the ACA requires exchanges, whether state-run or federal, to establish navigator programs in which an entity designated as a navigator will conduct public awareness activities, provide information about the health plans and the premium assistance and cost reduction programs, "facilitate enrollment in qualified health plans," and make referrals to any state agency for grievances. (29) The law prohibits a health insurance issuer from being a navigator and disqualifies anyone who receives any direct or indirect payment in connection with signing up new members. (30)

      Navigators must be entities that have connections with the community. (31) The navigator does not have to be an agent or broker, but individuals can enroll in a qualified health plan using a broker. (32) During the Congressional battle over the ACA, groups like the National Association of Health Underwriters, an organization that represents insurance agents and brokers, questioned the need for a navigator program, pointing to the role that their members already play. (33) On one lobby day at Capitol Hill, over 1,000 independent insurance agents delivered a message that brokers wanted to maintain their role in assisting consumers in finding and purchasing health insurance despite any health reform. (34) They warned of unintended consequences if brokers, who are the "experts," were replaced or duplicated by navigators. (35) Language was added to the bill to allow agents and brokers to become navigators. (36)

      In September 2010, the U.S. Department of Health and Human Services began awarding federal funding for implementation activities in the states, including grants to design and establish the health insurance exchanges. (37) Proposed rules for the navigators were published in April 2013, and the final rules were issued on July 12, 2013. (38) By this point, thirty-three states had decided to use the federal exchange, (39) and nineteen states had passed legislation or were debating legislation to regulate navigators in the federal exchanges. (40)

2. Missouri's Response to the ACA

   1. 2010: Saying "NO" to the Individual Mandate

      In Missouri, the ACA has been a political platform for fights between the state executive and legislative branches as well as between the state and federal government...