The individual market health-contingent wellness programs cannot base rewards, such as lower premiums and deductibles or cash payouts, on meeting a specific health factor standard. (Photo: Shutterstock)
The Trump Administration is resuscitating a 2013 demonstration project contained within the Patient Protection and Affordable Care Act that would create a 10-state health-contingent wellness test program for the individual health insurance market.
Health-contingent wellness programs have long been controversial because consumer advocates say they tend to favor the already healthy and place additional financial burdens on those in less that peak health. They have been effectively banned from the individual marketplace—save for the demonstration project that was authorized as part of a Final Rule released in 2013. Health-contingent programs differ from participatory programs in that the latter do not set standards of achievement, but merely encourage participation.
The Centers for Medicare & Medicaid Services issued a bulletin Monday essentially urging states to apply for one of the 10 demonstration project openings. Proposals must meet fairly strict guidelines for fairness to all insured individuals and programs will be carefully evaluated, CMS said in a release.
As with other reforms within the PPACA reform, the Trump Administration credits itself with unveiling an innovative approach to better health, despite the fact that the demonstration program was approved under the Obama Administration.
"Today's announcement is another example of President Trump's commitment to driving better health outcomes by offering states new flexibility to innovate and empower Americans to make the best healthcare decisions for themselves and their families," said CMS Administrator Seema Verma. "Allowing states to implement these wellness programs in their individual markets offers the opportunity to not only improve the health of their residents but also to help reduce healthcare spending."
The individual market health-contingent wellness programs cannot base rewards, such as lower premiums and deductibles or cash payouts, on meeting a specific health factor standard.
State proposals can take two general formats, CMS said. States may design their own plan model, consistent with the caveats and requirements of the 2013 Final Rule. Or, "a State that wants to provide health insurance issuers with more flexibility may allow issuers to design wellness programs (issuer-based demonstration project)."
HHS will evaluate the proposals and approve no more than 10 state programs to participate in the demonstration project.
State proposals must be fashioned with five guiding principles in mind.
- All persons eligible for the program must be given an opportunity at least once a year to qualify for the rewards of the program.
- The size of the reward for meeting the program goals cannot exceed 30 percent of the total cost of coverage.
- Health-contingent wellness programs must provide a "reasonable alternative standard" or waiver of the health-contingent standard for individuals who find it unreasonably difficult to meet the otherwise applicable standard because of their medical condition, or for whom it is medically inadvisable to attempt to satisfy the standard.
- A notice must be available explaining that alternative standards are available.
- Programs "must also be reasonably designed to promote health or prevent disease, not be overly burdensome, not be a subterfuge for health status discrimination, and not use a highly suspect approach."
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
