Trump Administration Toughens Obamacare Enrollment Criteria

By Sara Hansard

People who owe premiums for Obamacare plans face tighter requirements to pay up before they enroll again under a final rule released April 13 by the HHS.

That was one of the few changes made to the market stabilization final rule (RIN:0938-AT14) that implemented many changes called for by health insurers to try to prevent Affordable Care Act enrollees from waiting until they are sick to sign up for coverage. Insurers say that practice has led to higher claims and premiums.

This first major rule to be issued by the Trump administration Department of Health and Human Services is an attempt to stabilize the faltering ACA exchange plans, which have lost money since they started in 2014. But the most immediate issue to be addressed is funding subsidies for the lowest-income enrollees. On April 13 a group led by former Senate Majority Leaders Bill Frist (R-Tenn.) and Tom Daschle (D-S.D.) joined health insurers, medical providers and employer groups in calling for definite funding of subsidies for low-income enrollees through 2018.

Action Needed on Cost-Sharing Subsidies

“Action to address the future of [cost-sharing reduction] subsidies is needed immediately,” said the statement from the Bipartisan Policy Center. “Uncertainty regarding the future status of CSR subsidies is undermining health plans’ confidence in the individual health insurance market. The uncertainty will mean higher costs passed on to consumers.

“Moreover, health plans have indicated that failure to continue CSR subsidies could cause many of them to exit these marketplaces and discontinue offering individual market coverage or significantly increase premiums,” the statement said. Insurers are to start filing premium proposals for the ACA marketplaces in May in some states, and by June 21 for the federal exchanges.

The cost-sharing subsidies are expected to be worth $9 billion in 2017.

Under the final rule, people who are in arrears in paying premiums must make up their payments before enrolling for the following year to issuers that are in the same corporate group. The proposed rule would only have required back payment to the same issuer.

Special Enrollment Periods

The rule requires people who want to get coverage outside normal open enrollment periods to verify that they are eligible to do so—for example, because of having a baby or getting married. Insurers have reported that claims have been higher for people enrolling during special enrollment periods, and they called for tighter rules to prevent people from gaming the system until they need medical services.

“This final rule adopts some important changes that have been needed for some time in order to improve the functioning of the individual market, and we appreciate those changes,” Marilyn Tavenner, president and chief executive officer of America’s Health Insurance Plans, said in a statement. “Those improvements include tightening up rules for special enrollment periods, greater flexibility in product and benefit design, and simplified administrative processes.”

“However, there is still too much instability and uncertainty in this market. Most urgently, health plans and the consumers they serve need to know that funding for cost-sharing reduction subsidies will continue uninterrupted,” Tavenner said. Without the funding, millions of Americans who buy their own plan will be harmed and premiums will go up nearly 20 percent, she said.

Continuous Coverage

The Centers for Medicare & Medicaid Services, the HHS agency that issued the rule, asked for comments on additional policies that would promote continuous coverage, but it didn’t make any changes to the final rule. Insurers had supported requiring people to stay covered in order to avoid paying penalties.

“It has all of the problems of the proposed rule,” Timothy Jost, a consumer representative with the National Association of Insurance Commissioners, told Bloomberg BNA April 13.

A provision that will allow plans to cover slightly less in medical claims than what has been required is “going to increase cost sharing and reduce premium assistance for some people,” Jost said. For example, silver plans could cover only 66 percent of medical claims instead of the 70 percent that has been required.

House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) issued a statement April 13 saying the changes made by the rule “will not produce any meaningful improvements for the stability of the ACA Marketplace, and could significantly increase the cost of health insurance for millions of Americans. Additionally, today’s final rule from HHS is noticeably silent on the issue of cost-sharing subsidies, which is the single most important action for market stability.”

Shorter Open Enrollment

The open enrollment period for 2018 will be shortened almost in half under the rule, from Nov. 1 through Dec. 15. That will likely result in fewer people enrolling but will also probably mean insurers will get a full year’s worth of premiums. Many people sign up for the exchanges, which enrolled an estimated 12 million people in 2017, but many drop their plans during the year.

Republicans have called for returning more regulatory power over health-care policies to states, and the rule takes the first move in that direction by deferring to states to set rules regarding the adequacy of provider networks for exchange plans.

“Some states are good at that. Some states haven’t done much with it,” Jost said. “Inasmuch as people have been complaining networks are narrow this is a step in the wrong direction.”

But Katie Allen, executive director of the Council for Affordable Health Coverage, which represents employers, pharmaceutical companies, insurers, patient groups and physician organizations, told Bloomberg BNA April 13, “We see this as a positive move from the administration.” Congress needs to act to fund the cost-sharing subsidies, however, she said.

“While CMS has taken steps to correct some of the current challenges in the marketplace, these changes likely are not significant enough to sway health plan decisions for the upcoming plan year,” said Cara Kelly, a vice president at Avalere Health. “Losing health plans from the exchanges is still a risk for 2018.”

Recent Avalere analysis found that exchange enrollment has fallen well below initial projections, and Avalere data for 2017 exchange plans show that one in three regions in the U.S. will have no insurer competition.

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

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

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