CMS drops rule aimed at stabilizing ACA market
- The federal government proposed a rule on Wednesday aimed at helping to stabilize the ACA individual and small group insurance markets.
- It proposes to expand pre-enrollment verification, provide more flexibility with offering coverage options, shorten the open enrollment period in the individual market for the 2018 plan year, among other changes.
- The proposals come the day after Humana announced it will fully exit the ACA market for 2018 because it sees "further signs of an unbalanced risk pool." While Humana was never a large player in the ACA markets, it is one of the first major insurers to completely exit them.
Many of the major health insurers have been scaling back their ACA participation due to financial losses. Just this morning, Aetna CEO Mark Bertolini said the exchanges were in a "death spiral." In UnitedHealthcare's case, such an exit has led to an expected $4 billion in revenue loss. Still, major insurers exiting the exchanges certainly threatens the stability of the nascent market.
Since President Donald Trump was inaugurated, Republicans have been working to shore up the ACA market and not be blamed if and when it does indeed go under. AHIP President and CEO Marylin Tavenner recommended a number of changes in December 2016 that she believes are required to repeal-and-replace the ACA "responsibly," which included getting rid of ACA taxes on insurers, and "implementing effective verification of individuals’ eligibility" prior to enrollment. "The individual insurance market was a challenge before the ACA and continues to be one today," Tavenner said in a statement.
Republicans have also been working with the Congressional Budget Office on ACA replacement plans.
While it was recently revealed that Americans are at an all-time low rate regarding uninsurance (8.8%), enrollment in the ACA's fourth open enrollment period was down for the first time with a total of 9.2 million sign ups, a drop of nearly 500,000 from the year before.
The government has been attempting to enroll younger and typically healthier individuals to help stabilize the ACA's risk pool. While a 2016 HHS report suggested that the risk pools are stabilizing because of the cost reductions that occurred in states with strong ACA enrollment growth, it shows per member monthly paid claims in the individual market decreased by 0.1% between 2014 and 2015.
The new HHS Secretary, Tom Price, an orthopedic surgeon who has been an opponent of the ACA, touted the newly proposed changes on Twitter:
The New York Times' Margot Sanger-Katz picked up on an interesting tidbit in her initial analysis of the rule (the whole tweet storm is worth the read):
Newest idea: people who drop coverage mid year and then sign up for the same plan in the next year would owe back premiums.— Margot Sanger-Katz (@sangerkatz) February 15, 2017
Comments on the rule must be submitted by March 7.
- Department of Health and Human Services Patient Protection and Affordable Care Act; Market Stabilization
- Centers for Medicare & Medicaid Services CMS Issues Proposed Rule to Increase Patients’ Health Insurance Choices for 2018