Special Enrollment Verification Likely Under Coming HHS Rule

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By Sara Hansard

The Trump administration will likely require verification of eligibility for people signing up for health plans outside of normal enrollment periods under a proposed rule under review.

That will probably be the top change called for by health insurers, although it isn’t clear yet what the proposed rule from the Centers for Medicare & Medicaid Services will say, according to people who follow health-care policy. The proposed rule, titled Patient Protection and Affordable Care Act, Market Stabilization (RIN: 0938-AT14), was received Feb. 1 for review by the White House Office of Management and Budget.

President Donald Trump issued an executive order Jan. 20, his first day in office, laying out his goal for “minimizing the economic burden of the Patient Protection and Affordable Care Act pending repeal.” The proposed rule is his administration’s first move to do so.

Neither the CMS nor OMB responded to a request from Bloomberg BNA for comment on when the proposed rule would be released or what would be included.

Insurers Calling for Quick Action

Health insurers have called for quick action to provide stability to the individual market as Congress prepares to repeal and replace the ACA. If the requirement to have insurance or pay a penalty is repealed, as Republicans have called for, incentives need to be in place for people to buy coverage, Marilyn Tavenner, president and chief executive officer of America’s Health Insurance Plans (AHIP), testified Feb. 1 to the Senate Committee on Health, Education, Labor and Pensions. Tavenner laid out steps she said were needed to stabilize the individual market.

The proposed rule is likely to include “a lot of the stuff you’ve been hearing insurers talking about for awhile,” Ed Haislmaier, who worked on Trump’s transition team for the Department of Health and Human Services, told Bloomberg BNA Feb. 2. Haislmaier is a senior research fellow for health policy at the conservative Heritage Foundation.

“The focus is on protecting people who have coverage and are at risk of losing it, as opposed to focusing on enrolling people, possibly at the expense of making it unaffordable for somebody else,” Haislmaier said. For 2017, premiums in the most popular ACA plans rose an average of 25 percent and the number of choices dropped sharply as insurers backed away from the money-losing exchange plans.

Special Enrollment Periods

Special enrollment periods are supposed to be used only for life-changing events, such as marriage or the birth of a child. Health insurers have called for tighter rules to prevent people from waiting until they are sick to sign up for coverage. In February 2016, America’s Health Insurance Plans and the Blue Cross Blue Shield Association released a report finding that health-care costs were 24 percent higher for people who enrolled through special enrollment periods during the first three months of 2014 than those coming in during the normal open enrollment period.

Under the proposed rule, prospective enrollees may be required to provide verification that they are eligible for a special enrollment period before they are covered, Katie Allen, executive director of the Council for Affordable Health Coverage (CAHC), told Bloomberg BNA Feb. 2. The CAHC, which represents employers, health insurers, pharmaceutical manufacturers, patient groups and providers, Feb. 1 released its recommendations for replacing the ACA, which included stricter verification for special enrollment periods.

Group health plans require verification before people are allowed to enroll outside of special enrollment periods, Allen said.

Fewer Young Enrollees?

But Timothy Jost, a consumer representative with the National Association of Insurance Commissioners and an ACA supporter, told Bloomberg BNA Feb. 2 that requiring stricter verification of special enrollment eligibility could result in fewer young, healthy people enrolling in the individual market.

“The problem is not that too many people are cheating on the special enrollment periods,” Jost said. Fewer people are enrolling through special enrollment periods than the number who may be eligible, he said. A 2016 Department of Health and Human Services report on the results of a special enrollment period verification pilot program found that younger consumers are more likely to fail to complete the verification process than older consumers.

Tightening special enrollment eligibility “will probably have the effect of driving young people away and ending up with an older and sicker enrollment group,” Jost said.

Other Policy Changes

Other policy changes that may be made in the proposed rule include changes to the grace period health insurers must follow under the ACA for covering people who haven’t yet paid premiums and changes to third-party payments that are allowed, Allen said.

The HHS has discouraged third-party payments from hospitals or other groups, such as dialysis services providers, because it can result in conflicts of interest as providers steer patients into plans that pay higher rates than government programs, such as Medicare, Allen said. But third-party payments haven’t been prohibited, she said. “So they might prohibit it.”

In addition, the CMS could grant more regulatory relief to health plans by giving them more flexibility in benefit designs and in rules governing the actuarial values that plans must meet, Allen said.

The CAHC also has suggested that the CMS delay the deadlines for insurers to file details of their 2018 plans until Sept. 1. The filings are generally due in May under current regulations.

Joel Ario, who was President Barack Obama’s first leader of the ACA exchanges, told Bloomberg BNA Feb. 2 that he hopes the proposed rule will cover “more than special enrollment periods and grace periods. I hope in particular it addresses the cost-sharing reductions. That’s really the single biggest item needed for stability in the market in 2018; in 2017 for that matter.”

A federal district court ruled in 2016 in favor of the House of Representatives, which sued the Obama administration for providing the cost-sharing subsidies to low-income people without a congressional appropriation. Without the cost-sharing subsidies many insurers would suffer greater losses on exchange plans in 2017 and they would likely withdraw from the market in 2018.

To contact the reporter on this story: Sara Hansard in Washington at shansard@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com

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