The Trump administration on Wednesday introduced a rule that’s intended to quell health insurers’ concerns about the stability of the Affordable Care Act’s individual and small group marketplaces in 2018.
The rule, proposed by the Centers for Medicare and Medicaid Services, tightens the length of the 2018 open enrollment period, encouraging healthier individuals to enroll for full-year coverage. Under the rule, the enrollment period would still open on Nov. 1, but would close on Dec. 15 instead of Jan. 31.
Insurers have pushed for more clarity on how Republicans plan to stabilize the insurance market while they move forward on repealing and replacing the ACA. The rule comes after President Donald Trump signed an executive order on Jan. 20 that gave heads of agencies broad powers to “minimize the unwarranted economic and regulatory burdens” of Obamacare.
“We anticipate this change could improve the risk pool because it would reduce opportunities for adverse selection by those who learn they will need services in late December and January; and will encourage healthier individuals who might have previously enrolled in partial year coverage after December 15th to instead enroll in coverage for the full year,” the rule states.
But CMS said that the rule, which modifies the actuarial value used to determine the levels of Obamacare health plans, may lead to higher out-of-pocket costs for consumers.
“The proposed change in (actuarial value) could reduce the value of coverage for consumers, which could lead to more consumers facing increases in out-of-pocket expenses, thus increasing their exposure to financial risks associated with high medical costs,” the rule states. “However, in the longer run, providing issuers with additional flexibility could help stabilize premiums, increase issuer participation and ultimately provide some offsetting benefit to consumers.”
The rule also addresses insurers’ complaints about potential abuse of special enrollment periods in the individual market, requiring people to submit documents proving they qualify for changes to their coverage.
Notably, the rule doesn’t address age-rating bands that set how much more insurers can charge older people compared to younger participants. Some insurer and consumer groups want to see the current three-to-one ratio loosened to lower premiums for younger people.
Families USA, a group that represents consumers, criticized the CMS rule.
“By making it harder to enroll, they are creating their own death spiral that would deter young adults from gaining coverage, thereby driving up costs for everyone,” Ron Pollack, the group’s executive director, said in a statement. “Very significantly, the administration has completely reneged on its promise to lower deductibles. Instead they are increasing cost-sharing and cutting back financial assistance for coverage.”
The Alliance of Community Health Plans, which represents at least 19 health insurers across the United States, praised the proposed changes, saying they give insurers and other health care players more stability in the transition away from the ACA.