Stabilizing the Individual Health Ins. Market
Those of you who read my previously released – “7-Point Health Care/Insurance Reform Plan” – may recall point no. 2, which was to entice and encourage insurers to come back to the markets and resume offering affordable coverage to willing, able, and ready buyers.
Several folks that read the blog outlining my reform plan posed this question – “If there are no insurers offering individual health insurance in my county (or state) in 2018 (and beyond), will the federal government still enforce the Affordable Care Act’s (ACA) individual mandate; even if its impossible to secure coverage and meet the requirement”? Absent a change in law or regulations relaxing the mandate; or the return of health insurer(s) to the markets that lack any, the answer would be “yes”! This situation presents a formidable conundrum. But…help may be on the way!
The Department of Health and Human Services (HHS) recently issued FINAL regulations (on 4/13/17, taking effect 6/19/17) designed to “stabilize the individual health insurance markets”. These regulations are primarily aimed at reducing (if not preventing) the instances of people gaming the system and waiting to purchase health insurance until healthcare is needed, and subsequently dropping coverage after treatment and charges are complete. Such manipulation of health insurance markets by some consumers has reportedly resulted in a large percentage of health insurance industry losses, compelling many insurers to “cut and run”. The old analogy of “waiting until the house is on fire before purchasing coverage” comes to mind!
Here’s a summary of the new regulations, again, designed to entice insurers back to the markets:
- The annual open enrollment period (AEP) for individual coverage in 2018 is changed to 11/01/17 – 12/15/17, which is shorter than previous AEP’s. This time frame aligns better with many employer plans, and Medicare/Medicare Advantage enrollment periods.
- New rules apply to special enrollment periods (SEP), which are generally created upon experiencing a qualifying event, such as acquiring a dependent, a permanent move, or losing coverage. The new rules:
- allow insurers to require additional, expanded verification of their SEP eligibility;
- limit enrollees ability to change metal coverage levels (i.e., increase coverage midstream) during a coverage year; and
- adjust requirements for SEP’s associated with marriage.
- Allows insurers to collect past due premiums for coverage that was inforce on an applicant within the past year before re-enrolling the applicant. (Note: This regulation encourages continuous coverage.)
- Creates more flexibility for insurers to meet ACA actuarial value minimums allowing for lower premiums and (hopefully) more coverage choices.
- Defers oversight of preferred provider network adequacy from the federal government to states that have the ability/means to conduct such review processes.
Many health insurance companies have already announced their intention to cease selling individual health insurance to new customers, and to terminate inforce coverage, in 2018. Hopefully these regulations will deter further market withdrawals, and perhaps entice new entrants for 2018, 2019, and beyond!
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