According to a press release from the Department of Health and Human Services (HHS), the proposed rules aim to stabilize the individual and small group health insurance markets. HHS says the proposed rule would do this by shortening the 2018 enrollment period, lowering insurers’ minimum standards for care to qualify for the exchanges and forcing beneficiaries to pay back any premium owed prior to obtaining coverage for the next year. The Centers for Medicare & Medicaid Services (CMS), which is part of HHS, cited data showing that 21% of individuals stopped paying premiums during 2015 and that almost half of those individuals re-enrolled in the same plan in 2016.
The rule addresses complaints by insurance companies about potential abuse of special enrollment periods by requiring people to submit documents proving they qualify for changes to their coverage. This requirement would take effect in June of 2017. Another change to the special enrollment rules would limit an individual’s ability to change metal levels during a special enrollment period. Also, newly married couples would have to prove that one of them was previously covered.
The proposed regulatory changes aim to promote more continuous coverage of individuals, particularly healthier individuals.
The proposed rule would expand the range of permitted actuarial value de minimus variation. This may lead to higher out-of-pocket costs for consumers.
Under the proposed rule, the annual open enrollment period for individuals would be shortened from November 1, 2017 – January 31, 2018 to November 1, 2017 – December 15, 2017. This change had been scheduled to take effect for 2019 and the proposed regulations would move this up by a year.
The proposed rule states that it is the intention of CMS to rely on state regulators to ensure network adequacy, starting in 2018.
CMS also released a revised proposed timeline for the qualified health plan certification and rate review process for 2018. CMS hopes to finalize these rules before insurance companies are required to file their 2018 plans and rates.
With a number of insurance companies considering withdrawing from the exchanges, the proposed rule can be seen as an attempt to shore up the exchanges. It is not clear that the changes will be enough to shore up the exchanges, particularly if the individual mandate is repealed, as is proposed by the American Health Care Act currently being considered by Congress. CMS acknowledges that the net effect of the proposed rule is uncertain and may not have the desired effect on enrollment, premiums or overall health care spending. CMS indicated that it considered maintaining the status quo, but determined that the changes are urgently needed to stabilize health insurance markets, to incentivize insurers to enter or remain in the exchanges, to ensure premium stability and to increase choices for consumers.