The Trump administration and new Health and Human Services Secretary Tom Price are under fire over new proposed rules introduced on Wednesday to help stabilize the troubled individual insurance market.
Health care advocates and congressional Democrats claim the proposals are a wish-list-come-true for the insurance industry and would weaken or reverse many important consumer protections of the Affordable Care Act.
The rules, which would take effect in coverage year 2018, would cut the marketplace enrollment period in half from three months to 45 days — November 1, 2017 through December 15, 2017 for coverage beginning January 1, 2018.
The proposal would also lower the minimum coverage requirements for policies to be designated at the gold, silver, bronze and platinum metal levels. For example, bronze plans that must now cover no less than 60 percent of medical costs would be allowed to cover 56 percent to 62 percent of medical costs. Silver plans covering at least 70 percent of costs, could cover 66 to 72 percent under the proposal.
“The provisions in this proposed rule aim to improve the health and stability of the Exchanges,” the 74-page proposal states. “They provide additional flexibility to issuers for plan designs, reduce regulatory burden, seek to improve the risk pool and lower premiums by reducing gaming and adverse selection and (incentivizing) consumers to maintain continuous coverage.”
Insurers were heartened by the moves to steady the Obamacare marketplaces, where insurers have faced higher-than-expected medical costs, lower enrollment and fewer young plan members to offset the cost of sicker, older plan members.
On Thursday, Humana announced plans to halt their marketplace coverage in 11 states next year as Congress decides how to repeal, repair or replace the troubled health law.
In a statement, Marilyn Tavenner, President and CEO of America’s Health Insurance Plans, commended the Trump administration for seeking many of changes that the trade group had championed.
“While we are reviewing the details, we support solutions that address key challenges in the individual market, promote affordability for consumers, and give states and the private sector additional flexibility to meet the needs of consumers,” Tavenner’s statement said. “We appreciate the Administration’s efforts.”
Health are advocates like Debra Ness, President of the National Partnership for Women & Families, were less impressed.
“While the proposed rule issued today by the Centers for Medicare & Medicaid Services (CMS) states that it aims to improve the health and stability of the exchanges and increase affordability for consumers, in reality it would do neither,” Ness said in a statement. “The hypocrisy is rich, given that the administration’s own actions have already been a destabilizing force, and given that the rule would shift more of the cost burden to consumers, make it more difficult for people to enroll in health coverage and put at risk people’s ability to access providers of their choice.”
To address insurers’ concerns about people using the special enrollment period to sign up for coverage only after they require medical care, the Trump administration plans to implement a pilot program to widen pre-enrollment screening from half to all applicants in the special enrollment period beginning in June 2017 in all states that use the HealthCare.gov marketplace.
Special enrollment periods extend the enrollment opportunities for people who lose or must adjust their coverage due to job loss, relocation, child birth or other qualifying events.
The administration expects 650,000 people to be subject to the enhanced screening, which the administration estimates will take 12 minutes apiece and cost more than $5.3 million to execute.
Consumers would be given 30 days to provide documentation under the Trump plan, during which time their coverage would be “pending” and would not apply. Currently people have up to 90 days to make a payment during which their coverage remains in effect.
“We anticipate that there would be a reduction in costs to issuers since they would not have to process any claims while the enrollments are “pended,” the proposal said.
Chris Hansen, president of the American Cancer Society Cancer Action Network, said in a statement that limiting the special enrollment period will hurt cancer patients whose work lives and personal lives are often disrupted.
“Cancer patients often experience a change in their insurance status due to the nature of their disease,” Hansen’s statement said. “Whether they lose employer-sponsored coverage due to being too sick to work or relocate to be closer to caregivers or specialized cancer centers, these patients need to be able to enroll in health insurance quickly and without gaps in coverage. The proposed (special enrollment period) changes would require documentation that is often challenging to quickly obtain and will likely overwhelm an already overburdened verification system. We are concerned that this change could delay a patient’s treatment and jeopardize a person’s chance of survival.
Trump’s plan would also allows insurers to apply a premium payments to plan members’ “outstanding debt” from previously unpaid premiums owed to the same insurer. That insurer can also refuse to activate new coverage for failure to pay past due premiums “assuming state law does not prohibit such action,” the proposal states.
Individuals who have unpaid premiums with one insurer would still be allowed to enroll in coverage with a different carrier. But the administration wants to allow issuers to reject an enrollment application from people with a record of premium non-payment unless the applicant pays their past-due premiums.
An estimated 21 percent of individual market plan members stopped premium payments in 2015, and nearly 90 percent repurchased new plans in 2016 – about half purchased the same plan they had stopped payment on, the proposal states.
The Trump proposal was expected to require plan members to maintain their coverage without lapses in order to retain the ACA requirement of guaranteed coverage regardless of preexisting medical conditions. But the proposal only sought comment on that possibility.