The Centers for Medicare and Medicaid Services announced rule changes designed to entice more insurers to remain on the Affordable Care Act exchanges as Republicans mull an overhaul of the Obama administration health care law.
The proposed changes by CMS are designed to stymie abuses of the system and ensure that insurers get paid. This comes after Aetna pulled out of 11 state exchanges and Obamacare supporter Mario Molina began expressing doubts about the law.
Some tweaks CMS announced Wednesday include:
- Requiring people seeking to enroll in exchange plans during special enrollment periods to submit documentation proving they are eligible. CMS said that will encourage year-round enrollment and hopefully put downward pressure on premiums, which rose an average of more than 20 percent in the past year.
- Shortening the open enrollment period to a 45-day period between Nov. 1 and Dec. 15 for the 2018 coverage year. That would better align the marketplaces with the employer-sponsored insurance market and Medicare.
- Allowing insurers to collect prior unpaid premiums from patients before enrolling them in the following year’s plan. This should help reduce coverage gaps, according to CMS.
- Deferring to states in assessing insurer network adequacy. CMS said states are best positioned to ensure their residents have access to high-quality care networks.
- Providing insurers more flexibility in determining levels of coverage, giving patients more coverage options.
“Americans participating in the individual health insurance markets deserve as many health insurance options as possible,” Patrick Conway, acting administrator of CMS, said in a prepared statement. “This proposal will take steps to stabilize the marketplace, provide more flexibility to states and insurers, and give patients access to more coverage options. They will help protect Americans enrolled in the individual and small group health insurance markets while future reforms are being debated.”
Seth Chandler, visiting scholar at Mercatus Center, told Watchdog.org that while the changes aren’t really part of any big-picture reform, they will help keep more insurers on the exchanges until major reform occurs.
“Even if Republicans took no steps to repeal the ACA, it may become dysfunctional if steps aren’t taken to make sure that insurers aren’t going to lose money,” he said.
Others health care industry observers saw Wednesday’s announcement as a positive step.
Ceci Connolly, president and CEO of Alliance of Community Health Plans, said the change “begins to address concerns about the stability of the individual market, but does not resolve all of the uncertainty for plans and patients alike. Without adequate funding it will be extremely difficult to provide high-quality, affordable coverage and care to millions of Americans.”
But Chandler described the new-rule reveal as “a blue tarp over part of a roof with many leaks.”
He told Watchdog it doesn’t address a few fundamental problems that need to be sorted out soon, including the program’s risk adjustment model. That is the vehicle by which insurers with more high-risk patients are compensated by insurers with more low-risk patients. The current system deters smaller insurers from entering the market, Chandler said.
The costs of the law are higher than projected, and with every premiums increase, more taxpayer dollars are allocated to the pay for it.
“We’re getting fewer people in the Obamacare exchanges than anticipated, but those in the program are also costing more than anticipated,” Chandler said.
Also on the horizon: a decision from the Trump administration and Republican leaders in Congress about whether to fund cost-sharing subsidies that many lawmakers contend are nothing more than a bailout of insurance companies.
Republicans successfully sued the Obama administration to stop the payments in 2014, contending the executive branch had no legal authority to make the payments in the absence of a congressional appropriation. Congress could now appropriate the money to fund the subsidies, which allow low-income insurance buyers to pay less for coverage, or choose not to.
If no money is forthcoming, more insurers are likely to abandon the exchanges, resulting in fewer choices, higher premiums and the potential collapse of the Obamacare exchange system.