This article was original published by Kaiser Health News:
Repeal and replace is on-again, off-again, but that doesn’t mean the rules affecting your insurance will remain unchanged.
The Trump administration late Thursday issued a final rule aimed
at stabilizing the health law’s insurance marketplace that could have
rapid, dramatic effects on people who do not get insurance through work
and buy it on the Affordable Care Act’s exchanges.
The final rule upholds much of what was proposed by the
administration in February, including a shorter enrollment window,
tighter vetting of people who sign up outside of those open periods and
efforts to require some consumers to show proof of prior insurance
coverage.
The controversial proposal by the Health and Human Services
Department drew letters from nearly 4,000 organizations and individuals
during an unusually short, 20-day public comment period that ended in
early March. In their comments, consumer groups hated it, saying it
would wreak havoc by making it harder to get coverage, while insurers
were generally supportive.
But such experts as Christopher Condeluci of CC Law & Policy in
Washington, D.C., saw the initial proposal released in February by HHS
as helpful for insurers, though he also thinks more adjustments are
necessary.
“Does it meet all the carriers’ ‘asks’ when it comes to what changes
are needed? No, I don’t think it goes far enough,” said Condeluci, a
former staffer to the Senate Finance Committee who specialized in
insurance issues.
Sabrina Corlette, who studies the individual marketplace for the
Center on Health Insurance Reforms at Georgetown University, said the
directive could result in fewer healthy enrollees — which insurers also
would not like — and don’t address some of the biggest concerns for the
industry, such as the fate of federal subsidies that help low-income
consumers pay deductibles and other out-of-pocket costs. “This is
nibbling away at the margins,” she said. She could not be reached late
Thursday for comment on the final version.
Here are four ways the stabilization rule might change the individual health insurance market:
If You Owe, You Pay First
The final rule, to be published in the Federal Register next week,
says, consumers would have to repay past-due premiums from the previous
12 months before being granted new coverage if they sign up with the
same insurer. Because the law allows a three-month grace period before
people who haven’t paid premiums are kicked out of coverage, a
consumer’s overdue premiums could tally hundreds of dollars — even more
than $1,000.
The move aims to discourage people from gaming the system. Insurers
say a person with a bad knee, for example, might enroll and pay just
long enough to get an expensive knee replacement, then stop paying
premiums.
Wait, warn consumer groups and the National Association of Insurance Commissioners in
their comment letters. There might be legitimate reasons people stop
paying premiums — billing errors that are not the fault of the consumer,
for example, or the loss of a job. By making such a change, the groups
argue, the administration would violate a key part of the health law
that requires insurers offer coverage to just about everyone who
applies. “Only those who can rapidly come up with a possibly significant
sum of money by a given deadline can be guaranteed access to coverage,”
wrote Families USA.
Better Act Quickly
Open enrollment for next year would shorten to six weeks, down from
three months. While opening day would remain the same, Nov. 1, the final
rule closes the marketplace Dec. 15 instead of at the end of January.
That period “provides sufficient time for consumers to enroll,” the
administration says, and would mean all who sign up would have a full
year of coverage starting Jan. 1.
The shorter time period, the administration notes, could also reduce
“adverse selection” by trimming the number of people who wait until they
find out they have a health problem to enroll. Consumer groups argue
the proposal could backfire, because those who tend to wait until the
last minute to sign up are often the youngest and healthiest — and they
may miss the enrollment window if it is shorter. Additionally, the
deadline falls around the holidays, when money and time are often tight,
which could have a chilling effect.
Prove You Have A Reason — And Maybe Prior Coverage
The ACA allows people to sign up outside the open enrollment period
for a variety of special reasons, such as moving, losing coverage,
getting married or having a child. This provision has always been a
sticking point with insurers, who have maintained that too many
customers acting during the special enrollment period were sicker and
costlier than average. They also feared some of those customers might
have been taking advantage of this option. In response, the Obama
administration tightened some of these requirements last year and
announced it would run a pilot program starting this summer to randomly
select half of all special-enrollment applicants for verification review, with coverage held until documentation was provided.
Under the new rule, 100 percent of those applications would undergo
preapproval verification, starting in June. Consumers must provide
documentation proving they qualify for special enrollment before getting
coverage. The rule also says for marriage, at a minimum, one member of
the couple would have to prove they had health coverage for at least one
day in the two months before their nuptials.
Consumer groups are unhappy with the pre-verification idea — and the
extra marriage requirement for prior coverage. Particularly hard hit
would be couples who were uninsured previously because they could not
afford coverage as singles — or could not get it under their state’s
Medicaid rules. Additionally, advocates and some regulators say
requiring newlyweds to prove prior coverage violates the health law.
Flexibility — Or Higher Deductibles?
The health law uses a complex formula dividing plans into metal tiers
— bronze, silver, gold and platinum — based on an average percentage of
a typical year’s health care bills they cover. Bronze plans, for
example, currently must cover an average of 60 percent of costs, while a
silver one is 70 percent — and insurers are allowed wiggle room of plus
or minus 2 percent around those averages. The Trump rule tweaks the
formula, allowing insurers to create plans with larger variations around
the average. (It exempts certain silver plans for low-income consumers
from the change.) So, for example, a bronze plan might cover only 56
percent of costs and silver 66 percent. Insurers say this would allow
them to create plans that appeal to more customers, particularly those
looking for lower premiums. But critics say the move would increase
deductibles.
One big problem in boosting enrollment is that many potential
consumers — particularly younger, healthier ones — say premiums are too
high. But adjusting the law in this way could raise deductibles and
other cost-sharing requirements,
which consumers might dislike even more. While the health law sets a
maximum cap per year on such payments, for many those deductibles are
already thousands of dollars annually. Under the proposal, deductibles
could increase by more than $1,000 a year, according to advocacy group
Families USA’s analysis.
Update: This story was updated at 6:30 pm EST on April 13, to reflect the release of the final market stabilization rule.
Kaiser Health News, a
nonprofit health newsroom whose stories appear in news outlets
nationwide, is an editorially independent part of the Kaiser Family
Foundation.
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