Virgil Dickson | February 15, 2017
The Trump administration has released its first healthcare-related rule. It aims to appease insurers looking to curb the number of sicker people who sign up for coverage on the individual insurance exchanges.
The rule, meant to help stabilize that market by evening out the risk pool, would shorten the enrollment period for 2018. Instead of lasting three months, it will start on Nov. 1 and end on Dec. 15. That allows consumers to receive a full year of coverage and makes it easier to process enrollment.
Officials at the CMS considered allowing enrollment next year to remain open from November 1 to January 31 as planned, but ultimately determined that an immediate change would improve the risk pool and ease insurers’ concerns.
The White House appears to be offering insurers a reprieve while Congress attempts to coalesce around a plan to replace the Affordable Care Act. The rule only has a 20-day comment period that ends March 7, indicating that are attempting to get these changes in place as quick as possible.
Marilyn Tavenner, president of America’s Health Insurance Plans, recently asked Congress to address the uncertainty surrounding regulation of the individual insurance market created by the ACA. On Wednesday, she lauded the efforts.
“While we are reviewing the details (of the rule)…we appreciate the Administration’s efforts in proposing policies intended to address stability, affordability, and choice, helping consumers get the coverage they need,” she said.
The rule tightens enrollment eligibility. Anyone who signs up during special enrollment will be subject to strict documentation. To that end, the agency is expanding a pilot announced last year that tests the impact of stricter verification. The agency had planned to have only 50% of new applications for special enrollment periods to submit documents before their coverage begins. The agency now proposes to expand that to 100%. That move is estimated to result in an additional 650,000 individuals having their enrollment delayed every year until eligibility verification is completed.
Insurers say both issues are key to discouraging people from signing up when they realize they need costly medical services and then dropping coverage after they receive care.
The rule also allows insurers to refuse to cover a person who hasn’t paid their premiums. The issuer would have to apply this policy to all employers or individuals regardless of health status.
However, the rule acknowledges that this provision may require a change in some state laws. It will also not apply to those with coverage via the federally-facilitated Small Business Health Options Program due to operational constraints.
Health plans will also get more flexibility in creating products to sell on their market, meaning they’ll no longer be tied to levels of coverage mandated by the ACA.
The rule also proposes that responsibility of network adequacy (making sure plans offer enough providers and a good variety of them) would shift from the CMS to states. Insurers currently must meet both federal and state standards on network adequacy.
That will reduce administrative burdens, said Dan Mendelson, CEO of Avalere Health.
The agency also proposes rolling back a CMS requirement for providing access to “essential community providers,” which serve predominantly poor and medically underserved neighborhoods. Plans sold through the federal exchange have been required to include at least 30% of such providers in the territory covered. The Trump administration wants to lower that to contracts with at least 20% which was the standard in 2014. If plans fail to provide that level of access to essential community providers, they’ll need to provide an explanation as to why their product should still be allowed to be sold on the exchange. The CMS will then determine if that explanation is adequate.
None of the proposals in the rule address critical policies insurers say they need before deciding to remain in the individual market for 2018. That decision needs to be made as soon as March.
During a Senate Finance committee hearing earlier this month, Tavenner said insurers wanted subsidies such as the advanced premium tax credits and cost-sharing reduction payments to be paid in their entirety for the next two to three years. They also wanted full federal reinsurance payments for 2016. The pool of money was supposed to be paid to insurers that covered higher risk patients.
Finally, Tavenner said it’s imperative the individual mandate continue to be enforced as long as current market rules prohibit the exclusion of preexisting conditions, require guaranteed issue of insurance policies and impose community rating requirements.
Source: Modern Healthcare