State of Wisconsin I OFFICE OF THE COMMISSIONER OF INSURANCE 


125 South Webster Street. P.O. Box 7873 . Jim Doy/e, Governor Madison, Wisconsin 53707-7873 •Sean Dilweg, Commissioner Phone: (608) 266·3585 • Fax: (608) 266-9935 

• E·Mail: ociinformation@wisconsin.gov 

Wisconsin.gov Web Address: oci.wi.gov 

August 6, 2010 

Office of Consumer Information and Insurance Oversight 


Department of Health and Human Services 


Attention: OCIIO-9991-IFC 


.P.O. ,Box~8016- .>. ~ - . - ~ t 

Baltimore, MD 21244-1850 

To Whom it May Concern: 

I reviewed the Interim Final Rules for Group Health Plans and Health Insurance 

Coverage relating to Status as a Grandfathered Health Plan. In response to the 

solicitation for comments in various sections of the rule, I suggest adding further 

guidance in four areas: the model disclosure language; provider network changes; 

prescription drug formulary changes; and cost sharing provisions. 

.Disclosure Statement to Consumers 

The .interim fmal rule requires insurers to provide consumers with a disclosure. 

statement indicating their plan is believed to be a grandfathered plan. The model 

disclosure language requires consumers to contact their plan administrator to find out 

which consumer protections apply or do not apply to grandfathered plans. I suggest 

directing the National Association of Insurance Commissioners to develop a 

standardized table for inclusion in the consumer disclosure document that details the 

specific reforms applicable to individual, group and collectively bargained 

grandfathered plans. 

Provider Network Changes 

I recommend specifying in the rule that a plan loses grandfathered status if there is 

any significant reduction or loss of a provider network after March 23, 2010, including 

the following: 

• 	 A whole network is replaced. 

• 	 A network loses an entire specialty. 

• 	 A hospital is dropped from a network. 

• 	 Network changes result in a reduced availability of services in a specific 

geographical area. 
Prohibiting the above changes protects consumer access to service providers under 

their current plan. Insurers choosing such changes to their networks are significantly 

reducing service options that were available prior to March 23,2010 and should 

therefore lose grandfathered status. 

Prescription Drug Formularies !; 

Indicate in the rule that a plan loses grandfathered status if changes to a prescription 

drug formulary, made after March 23, 2010, create barriers to access. Such changestl 

include: 

• 	 Increasing the cost differential between prescription drug tiers beyond a 

certain threshold. 

• 	 Adding an additional prescription drug tier, if the new tier is likely to 

significantly increase policyholder's out of pocket costs. 

• 	 Moving a significant amount of drugs specific to a certain condition to a 

higher tier or moving all drugs from one tier to a higher tier. - <- --, - - -- '-' - - ~'"'""'-;:' - . 	 "!;.- ~~ 

Prohibiting the above changes protects consumer access to prescription drugs under 


their current plan. Insurers choosing to modify" their prescription drug formularies, in 


a manner noted above, are making a significant change to coverage and should lose 


grandfathered status.· 


Cost Sharing Provisions . 


The Interim Final Rule indicates that plans lose grandfathered status if there is an 


increase in a fixed-amount copayment that exceeds the greater of the following: 


• 	 An amount equal to $5 increased by medical inflation; or 

• 	 Medical inflation plus 15 percentage points. 

The rule also indicates grandfathered status is lost if there is any increase measured 

from March 23, 2010, in a percentage cost-sharing requirement (e.g. co-insurance). 

It is not clear whether these copayment provisions apply to copayments for 

prescription drugs. I recommend clarif:ying that the copayment restrictions apply to 

prescription drug copayments. For many consumers, prescription drugs are a critical 

and expensive component of their treatment regime. If excessive cost sharing changes 

are made, resulting in ap incre.ase out of pocket payment for consp.mers, a health.p~an 

should lose its grandfathered status. .. "~. . -.. -- ~ - --- --­

Ifthere are questions or follow up needed regarding my recommendations, please 

contact Jennifer Stegall of my office at: 608-267-7911 or 

Jennifer.Stegall@wisconsin.gov 

Sincerely, 

Commissioner 

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