In February, the Center for Medicare and Medicaid Services (CMS) issued its annual rule regarding the Notice of Benefits and Payments Parameters (NBPP).  These changes, if finalized, represent a potentially dramatic shift in Healthcare policy in the United States based on how the federal government reviews state-based insurance mandates, which may impact the Commonwealth’s finances.

Under Obamacare, the federal government is empowered to review any state-based mandates adopted after the ACA’s enactment to defray costs associated with the mandates. As laid out in the Affordable Care Act (ACA), if the state-based mandate did not qualify as an Essential Health Benefit, the respective state must defray and cover the cost of the mandate.  These payments were either to take the form of a direct rebate to the consumer or a payment to insurance companies to prevent premium increases.

Although the ACA provides this mechanism to keep costs in health insurance lower, the federal government has never once utilized this authority.  However, the new NBPP makes it clear that under the current administration, the federal government will attempt to review mandates going back to December 2011 and review state-based insurance mandates for potential defrayal.

Recognizing our nearly $6 billion structural deficit, the Commonwealth should begin preparing for the possibility that prior insurance mandates adopted by the Commonwealth may now constitute a financial obligation from our General Fund.

In order to determine the exposure and potential General fund liability health insurance mandates might impose on our budget, I have authored a resolution directing the Legislative Budget and Finance Committee to review every mandate adopted over the past 15 years.   

The resolution requires that LBFC review each mandate to determine whether it is subject to defrayal, the cost defrayal would have on the Commonwealth, along with the impact the mandate has on small group and individual insurance plans.

Please join me in supporting this important analysis, as it examines the impact insurance mandates have on the state’s budget and in the marketplace.