CMS Proposes New Rule to Stabilize ACA Markets

A recent rule proposed by the Centers for Medicare & Medicaid Services (CMS) intends to stabilize the Affordable Care Act (ACA) individual and small group insurance markets by expanding pre-enrollment verification, providing more flexibility with offering coverage options, and shortening the open enrollment period in the individual market for the 2018 plan year. 

“The health and competitiveness of the [Affordable Insurance Exchanges], as well as the individual and small group markets in general, have recently been threatened by issuer exit and increasing rates in many geographic areas,” the proposed rule states. “Some issuers have had difficulty attracting and retaining the healthy consumers necessary to provide for a stable risk pool that will support stable rates.”

The proposed rule comes at a time when many major health insurers have slowly been pulling out, or lessening their ACA participation, citing financial losses. Specifically, insurer UnitedHealthcare expects roughly $4 billion in revenue losses—roughly $200 million in losses in 2016, alone. Similarly, Mark Bertolini, CEO of Aetna, said at a Wall Street Journal Conference that the individual exchanges under the ACA are in a “death spiral.” Additionally, Humana recently announced it will not participate in the 2018 ACA market.

Per the proposed rule, CMS noted that in order to stabilize individual and small group insurance market that is losing insurers, more options to draw consumers to the market and vibrant competition to ensure consumers have access to competitively priced, affordable covered, are needed. 

“Americans participating in the individual health insurance markets deserve as many health insurance options as possible,” Patrick Conway, MD, acting administrator of CMS, said in a press release. “This proposal will take steps to stabilize the Marketplace, provide more flexibility to states and insurers, and give patients access to more coverage options. They will help protect Americans enrolled in the individual and small group health insurance markets while future reforms are being debated.” 

In order to improve the risk pool, CMS proposed: 

•changing the dates for open enrollment to November 1 to December 15 rather than November 1 to January 31; 

•increasing pre-enrollment verification of eligibility for all categories of individual market special enrollment periods for all States; 

•revising the interpretation of the guaranteed availability requirement to allow issuers to apply a premium payment to an individual’s past debt owed for coverage within the prior 12 months; and, 

•increasing the minimal variation in the actuarial values used to determine metal levels of coverage for 2018.

“The proposed changes in this rule are intended to promote issuer participation in these markets and to address concerns raised by issuers, states, and consumers,” CMS stated. “We believe such changes would result in broader choices and more affordable coverage.” —Julie Mazurkiewicz