On June 14, the Government Accountability Office (GAO) released a report outlining the criteria federal officials used in determining whether to award waivers exempting health plans from the national health care reform law’s minimum annual benefit requirements.  The GAO determined that Centers for Medicare & Medicaid Services (CMS) officials awarded waivers in cases where plans would otherwise have significantly raised health coverage premiums or limited access to care.  Examining a sample of 58 approved applications, GAO officials found that most projected a premium increase of at least 10 percent under the law’s annual benefit requirement, while nearly 75 percent of a sample of 65 denied applications projected premium increases of 6 percent or less.

From the report:

The Patient Protection and Affordable Care Act (PPACA), which became law in March, 2010, generally prohibits health insurance issuers and group health plan sponsors from imposing annual limits on the dollar value of “essential” covered health benefits beginning on January 1, 2014, but allows restricted annual limits, as defined by the Secretary of Health and Human Services (HHS), on the value of those benefits until that time. In setting these annual limits, HHS is statutorily required to ensure that individuals’ access to needed services remains available with a minimal impact on plan premiums. In June 2010, HHS set restrictions on annual limits for each plan year from September 2010 through December 2013. To mitigate a potential impact on individuals’ access or premiums for existing plans with benefit limits below these amounts, HHS established a waiver program based on the statutory requirement. Under the program, issuers or other group health plan sponsors could apply for a waiver from the annual limits set by HHS if they attested and presented evidence that meeting the annual limits would result in diminished access to benefits or a significant increase in premiums. To implement various provisions of PPACA, including those related to annual limits, HHS created what is now called the Center for Consumer Information and Insurance Oversight (CCIIO). CCIIO is now a part of the Centers for Medicare & Medicaid Services (CMS).

Full Report: Private Health Insurance: Waivers of Restrictions on Annual Limits on Health (PDF | 361 KB)

Government Accountability Office. (2011). Private health insurance: waivers of restrictions on annual limits on health.