A proposed rule that would significantly shorten the amount of time individuals get to enroll in health insurance plans in 2018 was released by federal officials on Wednesday, as part of an attempt to incentivize insurers to stay in the health insurance marketplace while the Trump administration tries to repeal and replace the Affordable Care Act.
The proposed rule issued by the U.S. Department of Health & Human Services and its U.S. Centers for Medicare & Medicaid Services (CMS) also would create stricter enrollment requirements, and allow insurers to deny coverage to someone with prior unpaid premiums. It also would loosen rules about the level of coverage required by individual plans and allow states, rather than the federal government, to determine whether the ACA marketplaces provide adequate care for their residents, in other boons to the insurance industry.
The rule is designed to stabilize the marketplace by assuaging the fears of insurers, many of which have stopped selling coverage on the public health-insurance exchange markets because of, among other reasons, the government’s failure to make good on payments it promised as part of the ACA’s risk corridor program, as well as uncertainty about the timing and contents of the Republicans’ replacement health care law.
“This proposal will take steps to stabilize the marketplace, provide more flexibility to states and insurers, and give patients access to more coverage options,” Dr. Patrick Conway, acting administrator of the Centers for Medicare & Medicaid Services said in a written statement. “They will help protect Americans enrolled in the individual and small group health insurance markets while future reforms are being debated.”
The response from the industry was positive.
“Our commitment is to ensure short-term stability and long-term improvements,” Marilyn Tavenner, president and CEO of America’s Health Insurance Plans, a national trade association, said in a statement. “While we are reviewing the details, we support solutions that address key challenges in the individual market, promote affordability for consumers, and give states and the private sector additional flexibility to meet the needs of consumers.”
But others were more skeptical and questioned whether the proposed rule would have the desired effect. Under the proposal, open enrollment for the 2018 coverage year would run from Nov. 1 to Dec. 15, 2017, a full month and a half shorter than enrollees had in 2016. That could prove problematic, since younger, healthier people who are less expensive to cover and crucial to the risk pool of insurers, tend to wait until the last minute to enroll, Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities, said in an interview earlier this week, before the final proposal was issued.
In addition, the proposed rule includes additional “hoops to go through” for people enrolling during special enrollment periods, which are available to people who have experienced certain life events such as getting married or having a child.
The change would require “pre-enrollment verification of eligibility,” namely the submission of supporting documentation, which, according to HHS officials, is a common practice in the employer health insurance market.
“Many of the proposals by [the] Trump administration are about reducing enrollment and could move us in the wrong direction,” Park said. “You worsen the risk pool if you make it harder to enroll.”
Although the rule is designed to stabilize the marketplace and encourage issuer participation while an alternative health care law is being developed, health care legal experts aren’t so sure it will have that effect.
“While I think this proposed rule has some helpful elements and has features that issuers have asked for to varying degrees, it’s not going to change the overall uncertainty of where the marketplaces, where the exchanges are going,” says Christine Clements, a partner in Crowell & Moring’s health care group.
“We need to know what the administration is going to propose. Only then will there be more stability.”
Clements cites the provision that allows issuers, before enrolling a patient in the next year’s plan with the same issuer, to collect premiums for prior unpaid coverage –the so-called guaranteed availability or continuous coverage provision — and the heightened verification requirement for individuals participating in the special enrollment period, as significant departures from the current system that would be helpful in preventing consumers from taking advantage of the system.
“I don’t think the [guaranteed availability] provision is a game changer, but at least the government is thinking about that requirement and the burden [potential abuse] puts on issuers,” she says.
But the rule does little to address one of the core problems associated with the ACA, Clements says: the failure of young, healthy people to enroll in the marketplace, which is necessary for providing a stable risk pool that will support stable rates.
Thomas N. Bulleit, a partner at Ropes & Gray, says that although the rule is “an insurer wish list,” the question remains as to whether it is enough incentive to keep a substantial number of insurers in the exchange for the 2018 coverage year.
Bulleit notes that the rule is arguably most significant because it sends a strong signal that CMS either expects the ACA to continue to operate or expects Congress to enact a replacement that, like Obamacare, provides sufficient funding for people to continue to buy insurance.
Contact the reporter Kristen Rasmussen at firstname.lastname@example.org
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