Comparison of Consumer Protections in Three Health Insurance Markets: Medicare Advantage, Qualified Health Plans and Medicaid Managed Care Organizations

Discussion

Medicare Advantage plans, QHPs and Medicaid MCOs provide coverage for an increasing number of people and increasing shares of the insured population in the United States. Over the course of a lifetime, an individual may be covered in one, two, or all three of these insurance markets. Further, many of the same insurance companies or plan sponsors offer products in two or all three of these markets. While many consumer protections between the markets are similar, differences could both cloud consumers’ understanding of their rights in the different programs and fragment oversight by government entities and administration by plan sponsors.   Transitioning between types of coverage that have significantly different consumer protections raises issues of not only equity, but ease of administration, oversight and consumer understanding of how to use their insurance and exercise their rights. Whether these differences should be maintained warrants further review by policy makers, within the parameters of baseline protections, such as due process, that are constitutionally required for Medicaid.

There may be opportunities to both enhance and streamline oversight of plans across insurance type without sacrificing beneficiary protections since federal oversight can vary significantly across the programs. For example, as plans with oversight from both the federal government and the states, the federal government has set some standards for Medicaid managed care plans but has provided states considerable discretion – and often more discretion than it has provided to the Medicare Advantage plans. With Medicare Advantage plans, the federal government has gained considerable experience over the course of recent decades in regulating private Medicare plans, and has increased oversight and expanded consumer protections in reaction to plan behavior and market changes.

The Marketplaces are increasingly populated by the same plan sponsors offering private Medicare and Medicaid products. As a consequence, alignment of consumer protections might also ease administration by the plans offering products in two or all three markets. Likewise, closer alignment of consumer protections between these programs could potentially ease the transition of individuals from one program to another and enhance coordination when someone has more than one type of coverage. Additionally, aligned protections could foster better, more consistent understanding of program rules by consumers.

In addition to aforementioned positive aspects, there may be tradeoffs in strengthening consumer protections. For many of the consumer protections discussed, further enhancement and alignment would be low or no-cost. For example, more uniformity around enrollment periods and consumer information could be low-cost to plans, state and federal governments. However some changes, for example surrounding appeals or benefit design, could cost private plans, public programs, and potentially consumers more resources and money.

Alignment could be achieved in multiple ways, with different effects on plans, enrollees, and federal and state governments. One possibility is that an effort to align protections could cause dilution of consumer protections in favor of uniformity. Another possibility is that alignment could be based on the strongest protection in one single program, and other programs brought up to match that higher standard rather than relying on a lower floor, or a “race to the bottom.” The CMS financial alignment demonstrations for dual eligible beneficiaries offer an example of this “higher standard” uniformity, in that where there is a discrepancy in a protection between Medicare and Medicaid, the stronger protection is adopted. It should be noted that certain protections, such as due process for Medicaid beneficiaries, cannot be diluted because they arise from constitutionally protected property rights. Ultimately, better coordination across markets with an emphasis on consumer protections will help to improve health care for all participants.