New final regulations designed to bring stability to the individual health insurance market may not matter if the White House follows through on a threat to kill subsidies paid to insurers to help reduce deductibles and other out-of-pocket costs for low-income patients.
The final rule from the Centers for Medicare & Medicaid Services grants a number of wishes sought by the insurance industry to help bring a level of predictability and flexibility when designing plans for the individual market. Specifically, it does the following:
• Shortens the open enrollment period for the 2018 plan year to 6 weeks running from Nov. 1 to Dec. 15, so that open enrollment closely aligns with Medicare and other private insurance.
• Requires individuals to submit documentation when seeking coverage through a special enrollment period.
• Allows insurers to collect past-due premiums before issuing coverage for a future year.
• Provides more actuarial flexibility to allow for different plan designs.
• Returns network adequacy oversight to states.
The new rules are not expected to alter the existing market dynamic, according to Kelly Brantley, vice president at Avalere Health.
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“I would say the rule is nominally helpful, but it’s really unlikely to persuade anyone, particularly those insurers who are already on their way out. I don’t think this a game-changer for them,” she said in an interview.
The American Medical Association, in comments to the CMS when the rule was proposed as a draft, said that if finalized, the rule “would raise premiums, out-of-pocket costs, or both for millions of moderate-income families and would make it more difficult for eligible individuals to enroll in health coverage and access needed care.”
The potential impact of these regulatory changes could be moot if President Trump makes good on his threat to withhold cost-sharing subsidies to insurers. The subsides already are the subject of a lawsuit brought by the House of Representatives against the Obama administration; they continue to be paid while the suit makes its way through the judicial process. President Trump has threatened to cut off the subsidies in an effort to force Congressional Democrats to the negotiating table regarding the repeal and replacement of the Affordable Care Act.
“My take on this is that the [market stabilization] rule as written is not likely to shift the market, really, in terms of access,” Ms. Brantley said. “The bigger question is whether the cost-sharing reductions are going to be paid. I think that has a bigger likelihood of influencing issuer participation and robustness of the market in 2018.”
Even with the changes made by the market stabilization rule, “there is still too much instability and uncertainty in this market,” Marilyn Tavenner, president and CEO of the industry group America’s Health Insurance Plans, said in a statement. “Most urgently, health plans and the consumers they serve need to know that funding for cost-sharing reduction subsidies will continue uninterrupted.”
Ms. Tavenner noted that without the subsidies, more plans are likely to drop out of the health insurance exchanges, leading to premium increases, and “doctors and hospitals will see even greater strains on their ability to care for people.”
The AMA, in an April 12 letter to President Trump, cosigned by America’s Health Insurance Plans, the American Academy of Family Physicians, the American Hospital Association, the Federation of American Hospitals, the American Benefits Council, the Blue Cross Blue Shield Association, and the U.S. Chamber of Commerce, stated that the “most critical action to help stabilize the individual market for 2017 and 2018 is to remove uncertainty about continued funding for cost sharing reductions.”
Ms. Brantley added that if the subsides were cut, “it makes it more challenging to bring any kind of money back into the system at a later point. I think it would be hard for those cost-sharing reductions to go away at this point and then ever come back, but I do think that it’s a possibility that that could happen.”
The CMS released the final rule April 13, 2017, and it is scheduled for publication in the Federal Register on April 18, 2017.