Back in mid-February – which already seems like a long time ago – with newly appointed HHS secretary Tom Price only a few days into his new position, CMS released its first Trump-era notice of proposed rulemaking. Meant to shore up the individual insurance market while the longer-term fate of the Affordable Care Act (ACA) is determined, it’s been the subject of much debate during the shorter-than-usual comment period (20 days versus the more typical 60). Here’s a high-level look at the key provisions in the final rule released last Thursday, April 13:
- Shorter open enrollment period – The open enrollment period will be half as long as previous years – November 1 through December 15. There will need to be sufficient consumer education to avoid fewer people enrolling, especially fewer younger people, particularly given the lower than expected numbers of younger/healthier enrollees that we’ve seen to date.
- Tougher rules around payment – Insurers have more leeway to collect unpaid premiums and to not provide policies to people who have not paid. The idea is that this will encourage more people to have continuous coverage. Previously, insurers had to grant consumers a 90-day grace period before canceling coverage, and coverage could not be denied in subsequent enrollment periods.
- Tighter controls on Special Enrollment Periods (SEP) – More controls around SEPs are detailed in the final rule regarding verification, metal coverage upgrades and coverage effective dates. Most notably, documentation will be required regarding SEP circumstances (marriage, divorce, birth, etc.). It will be important to monitor the impact of the additional requirements on younger people who lose employer coverage, again to ensure that we keep as many younger/ healthier people enrolled as possible.
- More lenient network adequacy standards – There will be more flexibility for insurers around how many Essential Community Providers are in a network, and monitoring of network adequacy will now be performed by states.
- More variation in plan design – Due to changes in the allowed variation in actuarial value used to determine metal levels of coverage, insurers will be able to offer plans with lower premiums and higher out-of-pocket costs to the member. These plans will appeal to younger, healthier people. But it’s possible that since the subsidies are tied to the cost of plans, this could have the effect of lowering the value of tax credit subsidies.
Whether these changes improve choice and lower premiums — thus adding to overall market stabilization as intended — will surely vary widely market by market.
The missing piece for insurers as filing deadlines for 2018 loom is the fate of cost-sharing reduction subsidies. Will the federal government continue to fund these reimbursements to insurers? Without that answer, true stability can’t be achieved. And without this continued funding, we can expect higher premiums and further market destabilization.