CMS prescribes palliative relief for what ails the ACA

CMS issues final rule to increase choices and encourage stability in health insurance market for 2018

Individuals obtaining coverage in the Marketplace created by the Affordable Care Act have faced double-digit premium increases, fewer plans to choose from, and a market that continues to be threatened by insurance companies jumping ship. The Centers for Medicare & Medicaid Services (CMS) last week issued the final Market Stabilization rule, to help lower premiums and stabilize individual and small group markets and increase choices for Americans. The CMS rule is designed to provide some relief for patients and issuers now.

CMS reported these recent statistical “death rattles” of the Affordable Care Act:

  • Many states saw double digit increases in their insurance premiums including:  AZ – 116%, OK – 69%, TN – 63%, AL – 58%, PA – 53%
  • Approximately 500,000 fewer Americans selected a plan in the exchange open enrollment in 2017 than in 2016.
  • Approximately one-third of counties in the U.S. have only one insurer participating in their exchange for 2017.
  • Five states have only one insurer participating in their exchange for 2017.
  • The premium for the benchmark second-lowest cost “silver plan” on Healthcare.gov increased by an average of 25 percent from 2016-2017.

“CMS is committed to ensuring access to high quality affordable healthcare for all Americans and these actions are necessary to increase patient choices and to lower premiums,” said CMS Administrator Seema Verma. “While these steps will help stabilize the individual and small group markets, they are not a long-term cure for the problems that the Affordable Care Act has created in our healthcare system.”

The final rule makes several policy changes to improve the market and promote stability, including:

  1. 2018 Annual Open Enrollment Period: The final rule adjusts the annual open enrollment period for 2018 to more closely align with Medicare and the private market. The next open enrollment period will start on November 1, 2017, and run through December 15, 2017, encouraging individuals to enroll in coverage prior to the beginning of the year.
  2. Reduce Fraud, Waste, and Abuse: The final rule promotes program integrity by requiring individuals to submit supporting documentation for special enrollment periods and ensures that only those who are eligible are able to enroll. It will encourage individuals to stay enrolled in coverage all year, reducing gaps in coverage and resulting in fewer individual mandate penalties and help to lower premiums.
  3. Promote Continuous Coverage: The final rule promotes personal responsibility by allowing issuers to require individuals to pay back past due premiums before enrolling into a plan with the same issuer the following year. This is intended to address gaming and encourage individuals to maintain continuous coverage throughout the year, which will have a positive impact on the risk pool.
  4. Ensure More Choices for Consumers: For the 2018 plan year and beyond, the final rule allows issuers additional actuarial value flexibility to develop more choices with lower premium options for consumers, and to continue offering existing plans.
  5. Empower States & Reduce Duplication: The final rule reduces waste of taxpayer dollars by eliminating duplicative review of network adequacy by the federal government. The rule returns oversight of network adequacy to states that are best positioned to evaluate network adequacy.

CMS’s final rule can be found here.

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