NAHU’s Washington Update is on hiatus this week. In lieu of our usual collection of articles and podcast, we are summarizing the most recent regulatory action affecting our industry.
On Wednesday, February 15, the Trump Administration released its first significant health policy action, a proposed rule intended to stabilize the individual and small group private health insurance markets for 2018. The 71-page proposal released by the Centers for Medicare and Medicaid Services (CMS) includes the following significant components:
- A proposed change to the planned individual market open enrollment period for 2018. Currently, the individual market open enrollment period is slated to be the same as this year, November 1, 2017-January 31, 2018. The rule proposes to change the 2018 period to November 1-December 15, 2017, which would not only reduce the enrollment time by half, but also make the period overlap significantly with the Medicare annual enrollment period as well as with open enrollment time for the many employer-sponsored plans that operate on a calendar-year renewal cycle.
- Proposed changes to actuarial value (AV) calculations, which should impact plans available in both the individual and small group markets nationally in 2018. Generally, the proposed rule would expand the variation allowed of the AV of metal level (bronze, silver, gold and platinum) plans of -4/+2 percentage points, rather than +/- 2 percentage points. This proposed change would impact all non-grandfathered individual and small group market consumers whose purchasing options are composed of metal level plans. Under the proposed standard, for example, a gold plan could have an AV between 76 and 82%, which would expand the range of cost-sharing options available. The proposed rule would not change the de minimis range for the silver plan variations (the plans with an AV of 73, 87 and 94%) available on the federal exchange at this time. The de minimis variation for a silver plan variation of a single percentage point would still apply. Also, bronze plans already had an expanded allowable variation, so the change for expanded bronze plans would be from +5/-2 percentage points to +5/-4 percentage points.
- A proposed requirement that all new consumers who seek to enroll in exchange coverage during a special enrollment period (SEP) via HealthCare.gov complete expanded pre-enrollment verification (currently only 50% were slated to be subject to expanded verification). This expanded eligibility verification would begin on July 1, 2017. Consumers with SEPs would be able to submit their applications and select a plan and coverage start date, but the consumers’ enrollment would be “pended” and their information would be held by HealthCare.gov and not released to the issuer until SEP eligibility was confirmed. Consumers would have 30 days to provide documentation, and they would be able to upload documents into their account on HealthCare.gov or send their documents in the mail. The proposed rule urges state-based exchanges to take similar action and requests comment as to whether they should be compelled to do so.
- A planned tightening of SEP eligibility requirements relative to people who have a previous history of nonpayment of premiums, documentation of a move, and gaining a SEP for a marriage. In addition, CMS indicates it will impose a more rigorous test for future uses of the exceptional circumstances SEPs, including requiring supporting documentation where practicable, and will also include a review of the current list of exceptional circumstances.
- The proposal would ban metal plan changes during the coverage year for individual market consumers generally and limit special enrollment coverage options available via HealthCare.gov to prevent adverse selection. The rule asks for comments as to whether state-based exchanges should have to act similarly.
- If an individual was behind on premium payments and then reenrolled in coverage, the proposed rule would allow issuers to apply a premium payment to an individual’s past debt owed for coverage from the same issuer enrolled within the prior 12 months.
- To make it easier for issuers to build networks, CMS proposes a write-in process to identify essential community providers (ECPs) who are not on the Department of Health and Human Services list of available ECPs for the 2018 plan year and lower the ECP standard to 20% (rather than 30%).
- New deference to state reviews for network adequacy in states in which a federally facilitated exchange is operating, provided the state can demonstrate their authority is at least equal to the “reasonable access standard” outlined in the law and that they have means to assess issuer network adequacy, regardless of whether the exchange is a state-based or federal exchange.
- Finally, the proposal contains a commitment to soon issue a revised timeline for health insurance issuers to decide if they would like to participate as qualified health plans in the individual and SHOP exchange marketplaces for plan year 2018. The revised timeline is intended to provide issuers with additional time to implement the market reform changes proposed in this rule and give them a greater incentive to compete in the individual and small group marketplaces.
Comments are due on this proposed rule by March 7, 2017. NAHU is currently evaluating the provisions of the proposal and how they may impact our members, their clients and the stability of the individual and small group markets. CMS has also asked for additional market stabilization ideas to be submitted, so NAHU will provide them with a detailed letter on behalf of the membership about both the potential of the proposed rule and our additional ideas to improve the private individual and group marketplaces.
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