Questions raised over Blue Cross health plans
FARGO — A degree of uncertainty hangs over more than 237,000 consumers covered by Blue Cross Blue Shield of North Dakota whose policies were in effect before passage of the Affordable Care Act.
The status of the North Dakota Blues’ so-called "grandfathered plans" — for those enrolled before March 23, 2010 — was left uncertain after a July 25 opinion by state Attorney General Wayne Stenehjem.
Stenehjem’s opinion concluded that some plans offered in North Dakota by two major health insurers — Sanford Health Plan and Blue Cross Blue Shield of North Dakota — likely fail to comply with federal law by excluding coverage for residential treatment of adults for substance abuse. The opinion applied to the plans sold on the health insurance marketplace established under the Affordable Care Act, commonly called Obamacare.
State Insurance Commissioner Adam Hamm said Monday, however, that the problems identified in Stenehjem’s opinion will be corrected when the insurance plans renew beginning Jan. 1.
Thus, he said, it’s unlikely the "grandfathered status" would be revoked by federal officials, who have sole authority to make that determination, Hamm said.
"Those issues will be addressed for the plan year 2015 and after," Hamm said. "We have it sorted out."
So far, Hamm said, he is unaware of the federal government revoking "grandfathered" status from any health insurance plans after passage of the Affordable Care Act in 2010.
In fact, he said, he is unaware of any federal reviews for North Dakota or other states of traditional health insurance plans with "grandfathered" status, which allows them to remain in force despite new requirements.
The loss of grandfather status would mean coverage would have to meet the standards established for health insurance plans sold under the new online "marketplace" for plans offered under the Affordable Care Act — a switch that could mean more extensive coverage and therefore higher premiums.
In his opinion, Stenehjem concluded that Blue Cross Blue Shield policies with the privileged "grandfather" status could be removed, but the determination ultimately hinges on interpretations by state and federal regulators.
More than two weeks later, the North Dakota Insurance Department and federal officials with the Centers for Medicare & Medicaid Services Center for Consumer Information and insurance Oversight still are reviewing the issue and have yet to decide.
"BCBSND continues to work with the North Dakota Insurance Department and the Center for Consumer Information and Insurance Oversight to ensure that all benefit plans comply with both state and federal law," North Dakota Blues’ spokeswoman Andrea Dinneen said in a statement Monday.
The attorney general’s opinion and governmental reviews were triggered by complaints by substance abuse treatment centers and Sen. Tim Mathern, D-Fargo, who in December asked Stenehjem for his legal opinion.
The issue stems from the state’s selection of a benchmark health insurance plan for coverage sold under the Affordable Care Act’s marketplace, the so-called "metallic plans," with gold, silver and bronze coverage tiers.
North Dakota’s benchmark plan, recommended by Hamm and approved by federal officials, does not require coverage for residential treatment of adults for substance abuse.
As a result, Blue Cross Blue Shield had to "adjust to the benchmark plan," Dinneen said in her statement, reducing the level of coverage under its "grandfathered plans."
Kurt Snyder, executive director of Heartview Foundation in Bismarck, which provides residential treatment for substance abuse, said the North Dakota Blues’ traditional plans dropped two of three levels of adult residential treatment for substance abuse.
The new metallic plans sold through the marketplace provide no adult substance abuse coverage, nor does the Sanford Health Plan, adopted as North Dakota’s benchmark plan, Snyder said.
As a result, he said, many adults who need residential treatment for substance abuse are going without coverage, which can mean they seek treatment in emergency rooms or end up in jail, he said.
Benefits for adult residential treatment for substance abuse will be required of all plans in North Dakota beginning Jan. 1, Hamm said, including both "metallic" and "grandfathered" plans.
Changes in benefits and premiums can only be made once a year, under federal law, and the deadline already had passed when plans had to be approved for 2014, Hamm said.
Benefits and premiums can’t be increased in the middle of a plan year, because that is not allowed by law and because increasing coverage would add costs not covered by premiums, he said.
Whether the traditional Blue Cross Blue Shield plans lose their "grandfather" status rests on several legal or administrative interpretations Hamm now believes are essentially moot.
One is whether dropping two levels of adult residential treatment qualifies as "the elimination of all or substantially all benefits to diagnose or treat" a particular condition, Stenehjem wrote.
However, Dinneen noted in her statement, "grandfathered plans are able to make routine changes that do not violate" certain requirements, which also include raising co-insurance charges or significantly raising co-payments.
She also noted, however, that the Blues continue to provide other levels of care for adult substance abuse, including inpatient care and outpatient care.
Meanwhile, the Centers for Medicare & Medicaid Services, which enforces the Affordable Care Act, is reviewing North Dakota’s benchmark plan for the new "metallic plans" to see if their failure to cover adult residential substance abuse treatment violates a federal law requiring "parity" for physical and behavioral health.
"CMS is currently reviewing this issue and will provide more information when we have concluded our analysis," Richard Allen, an associate regional administrator in Denver, wrote Snyder in a letter dated Aug. 5 and received Monday.