Dive Brief:
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HHS announced Wednesday a multi-pronged strategy aimed at improving the ACA marketplace risk pool.
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The list leads with curbing abuses of short-term plans, a tactic being used by some insurers to serve healthy consumers, which prevents those healthy individuals from balancing the sick in the ACA's risk pool.
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HHS' second major change will be weighing prescription drug usage to provide a better measure of enrollees’ health status for the risk adjustment program.
Dive Insight:
HHS is moving to halt the trend toward cheaper, short-term health coverage following news that sales for such policies have surged, despite their lack of consumer protections and the fact that enrollees still owe a federal tax penalty because they do not fulfill the requirements for health coverage under the ACA.
According to an April report by The Wall Street Journal, HealthMarkets found short-term sales for 2015 to be about 150% higher than they were in 2013, and a survey by eHealth found 51% of buyers cited price as the basis for their choice, compared to just 39% who cited a need for the temporary coverage for which the plans are designed.
HHS noted some issuers are selling short-term plans that last for almost a year, after which enrollees need to reapply. Their consumers see it as a win because of the savings, while the issuers are able to target only the healthy and bypass the consumer protections required of regular plans under the ACA.
"By keeping these consumers out of the ACA single risk pool, such abuses of limited duration coverage increase costs for everyone else, and they could have a greater impact over time if allowed to become more widespread," the HHS announcement stated.
A new proposed rule would limit such policies to less than three months and disallow renewals at the end, as well as require issuers to disclose the plans' limitations in not providing minimum essential coverage or protecting buyers from a tax penalty.
HHS' other strategies include considering the cost of partial-year enrollees to improve the risk adjestment program; helping those turning 65 transition to Medicare; fully implementing the Special Enrollment Confirmation Process, and continuing efforts to reduce data-matching issues to help keep healthy, eligible adults from giving up on the process of obtaining coverage.