Ensuring Health Insurance Protections for Consumers

The Affordable Care Act gives all Americans greater freedom and control over their health care decisions through new consumer protections and accountability provisions for health insurance companies. These provisions build upon the framework established by the Health Insurance Portability and Accountability Act of 1996 (HIPAA).  Since the enactment of the Affordable Care Act, states and the Centers for Medicare & Medicaid Services (CMS) have taken many steps to implement the new consumer protections.  Together, we are working to ensure that all health care consumers in all states will benefit from the law’s new protections.

Framework for Enforcement

The Public Health Service Act (PHS Act) establishes a framework for states and CMS to enforce the Affordable Care Act and other PHS Act provisions.  This enforcement structure contemplates that states be responsible for enforcing the Affordable Care Act market reform provisions, both inside and outside the Health Insurance Marketplace.
    
Under this framework, CMS only has the responsibility to enforce the market reform standards when a state notifies CMS that it does not have statutory authority to enforce or that it is not otherwise enforcing one or more of the provisions, or if CMS determines that the state is not substantially enforcing the standards.  This state-federal enforcement framework has been in place since 1996, and the Affordable Care Act builds on it.  The changes to the health insurance market coming in 2014 make consistent, market-wide enforcement important to ensure a level playing field inside and outside the Marketplaces and to minimize or eliminate opportunities for adverse selection.  Successful enforcement of the new standards will ensure our nation’s health care consumers receive the benefits offered by the Affordable Care Act.

State Enforcement

CMS has worked collaboratively with states to enforce the early market reforms of the Affordable Care Act, and is taking the next step in providing the new consumer protections to each American.  The enforcement structure is very much a partnership between the states and the federal government.  As the primary regulators, states can use their existing enforcement framework and tools to monitor compliance with the market reform standards.  Examples of such tools include policy form review, complaint investigation, market conduct examinations, and market analysis.

CMS Enforcement

If a state notifies CMS that it does not have statutory authority to enforce or that it is not otherwise enforcing the Affordable Care Act market reform provisions, or if CMS determines that the state is not substantially enforcing the provisions, then CMS is responsible for enforcing these consumer protections.  CMS will seek to establish a collaborative arrangement with the state in such a circumstance.  In such a collaborative approach, the state will continue to perform the same regulatory functions with respect to the Affordable Care Act market reform provisions as it does to ensure compliance with state law, and will seek to achieve voluntary compliance from issuers if the state finds any potential violations of the law’s market reform provisions.  If the state finds a potential violation and is unable to obtain voluntary compliance from an issuer, it will refer the matter to the CMS for possible enforcement action.

If CMS is responsible for enforcing the market reform provisions in a state without an agreed-upon collaborative enforcement arrangement, CMS will work directly with issuers to enforce the market provisions in that state.  To do so, CMS will notify issuers in the respective state that issuers must submit policy forms to CMS for review for compliance with the market reform provisions and CMS will notify issuers of any concerns.  CMS will also conduct targeted market conduct examinations, as necessary, and investigate consumer complaints to ensure compliance.  

At any time, a state that is willing and able may assume enforcement authority of the Affordable Care Act market reform standards.  When that happens, CMS will work with the state to ensure an effective transition.

Current Landscape

As of March 1, 2013, most states have either informed CMS they have the authority to enforce or have entered into a collaborative arrangement with CMS to enforce the new consumer protections in the Affordable Care Act.  Missouri, Oklahoma, Texas, and Wyoming have notified CMS that they do not have the authority to enforce or are not otherwise enforcing the Affordable Care Act market reform provisions.  CMS looks forward to working with these states – as well as other states – to ensure that all Americans are afforded all the protections of the Affordable Care Act.