CMS Issues New Rules Aimed at Improving Health Benefit Exchange Participation

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Even as President Trump and Congress work toward repealing some or all of the Affordable Care Act (ACA), CMS announced a final rule aimed at market stabilization of the Health Benefit Exchanges that are the cornerstone of the ACA.  CMS explained that the stability and competitiveness of the Exchanges have recently been threatened by insurers exiting some markets and increasing rates in others.  The final rule, available here, seeks to address the problem of individuals only seeking coverage after they discover they need medical services, and adding incentives for healthy individuals to maintain coverage.

The final rule includes several changes that attempt to improve the risk pool and address insurers’ concerns.  First, the open enrollment period is being shortened for 2018.  Instead of an open enrollment period of November 1, 2017 through January 31, 2018, the currently set period, enrollment under the final rule is limited to November 1, 2017 through December 15, 2017.  This will make the enrollment period consistent with future years, and improve the risk pools of the individual markets by reducing opportunities for adverse selection. 

The final rule also addresses concerns about potential misuse of the special enrollment periods.  Insurers complained that these periods are abused to enable individuals who are not entitled to special enrollment periods to enroll after they realize they need medical services.  The rule increases pre-enrollment verification from 50 percent to 100 percent of new consumers who attempt to enroll during these special enrollment periods. 

CMS is also revising its interpretation of the Federal guaranteed availability requirement in a way that would permit insurers to apply a premium payment to an individual’s past debt for healthcare coverage.  This change is intended to remove economic incentives for individuals to pay premiums only when they are in need of healthcare services.  This is also important in the effort to ensure individuals maintain continuous coverage throughout the year.  CMS is also making changes in the actuarial values used to determine levels of coverage.  This change is intended to allow insurers greater flexibility in offering new plans, and to help keep cost sharing and premiums stable for consumers.

CMS also announced that it is finalizing policies aimed at affirming the roles of States in regulating their health insurance markets and reducing the regulatory burdens insurers face by participating in the Exchanges.  The final rule signifies recognition that insurer participation is critical to ensuring consumers have access to affordable, quality healthcare coverage.  Insurer participation has been limited in some areas primarily due to market uncertainty and concerns regarding the risk pools insurers face.  CMS is working to address these concerns, even while the administration works to repeal or replace the system through legislation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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