Dive Brief:
- A new Avalere report bolsters insurers' complaints over lax rules around signing up for ACA plans under special enrollment periods (SEPs), finding 2015 SEP enrollees to have cost 5% more than enrollees who signed up during regular open enrollment.
- The report also found these SEP customers to have risk scores at an average of 20% lower than regular customers, impacting insurers' predicted costs under the ACA's risk adjustment program.
- Furthermore, the report found that in 2015, SEP customers kept their plans for a relatively short period of time, averaging a brief 3.6 months vs. 7.8 months for regular enrollees.
Dive Insight:
As a result of its findings, the Avalere analysis identified special enrollment periods as one of the factors causing high costs and instability in the ACA marketplaces.
“Consumers enrolling through special enrollment periods have higher healthcare spending than those picking a plan during open enrollment, and they are staying in the program for shorter periods of time,” Avalere President Dan Mendelson stated. “This is one of many technical problems that is presently destabilizing this program, and should be fixed by the Administration and the Congress to ensure continuity for patients."
Consumers can qualify for special enrollment under a variety of "qualifying events," such as loss of previous coverage, and changes to household size, location, or income.
The shorter average enrollment duration adds to suspicions of SEP abuse, in which consumers may wait until they need healthcare, then find or falsify a qualifying event to use as an excuse to get coverage and then dump it after receiving care.
CMS has already been working to address the issue. A proposed rule announced in August would adjust risk scores for partial-year enrollees, and would codify several special enrollment periods to "ensure the rules are clear and to limit abuse."
The administration first addressed the issue in January, promising tighter access and verification of eligibility, after taking criticism at the time for its more than 30 special enrollment categories, and urging to the public in 2015 to see if people could qualify to sign up past the deadline.