CMS Issues Proposed Rule to Increase Patients’ Health Insurance Choices for 2018

Centers for Medicare & Medicaid Services (CMS), Press release, February 15, 2017

The Centers for Medicare & Medicaid Services (CMS) today issued a proposed rule for 2018, which proposes new reforms that are critical to stabilizing the individual and small group health insurance markets to help protect patients. This proposed rule would make changes to special enrollment periods, the annual open enrollment period, guaranteed availability, network adequacy rules, essential community providers, and actuarial value requirements; and announces upcoming changes to the qualified health plan certification timeline.

“Americans participating in the individual health insurance markets deserve as many health insurance options as possible,” said Dr. Patrick Conway, Acting Administrator of the Centers for Medicare & Medicaid Services. “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.”

The rule proposes a variety of policy and operational changes to stabilize the Marketplace, including:

Special Enrollment Period Pre-Enrollment Verification:  The rule proposes to expand pre-enrollment verification of eligibility to individuals who newly enroll through special enrollment periods in Marketplaces using the platform. This proposed change would help make sure that special enrollment periods are available to all who are eligible for them, but will require individuals to submit supporting documentation, a common practice in the employer health insurance market. This will help place downward pressure on premiums, curb abuses, and encourage year-round enrollment.

Guaranteed Availability:  The rule proposes to address potential abuses by allowing an issuer to collect premiums for prior unpaid coverage, before enrolling a patient in the next year’s plan with the same issuer. This will incentivize patients to avoid coverage lapses.

Determining the Level of Coverage:  The rule proposes to make adjustments to the de minimis range used for determining the level of coverage by providing greater flexibility to issuers to provide patients with more coverage options.

Network Adequacy:  The proposed rule takes an important step in reaffirming the traditional role of states to serve their populations. In the review of qualified health plans, CMS proposes to defer to the states’ reviews in states with the authority and means to assess issuer network adequacy. States are best positioned to ensure their residents have access to high quality care networks. Also plans will now be required to include only one0fifth of essential community providers (ECPs) within their networks, removing from the patient the option of receiving care from the other four-fifths of ECPs.

Qualified Health Plan (QHP) Certification Calendar:  In the rule, CMS announces its intention to release a revised proposed timeline for the QHP certification and rate review process for plan year 2018. The revised timeline would provide issuers with additional time to implement proposed changes that are finalized prior to the 2018 coverage year. These changes will give issuers flexibility to incorporate benefit changes and maximize the number of coverage options available to patients.

Open Enrollment Period:  The rule also proposes to shorten the upcoming annual open enrollment period for the individual market. For the 2018 coverage year, we propose an open enrollment period of November 1, 2017, to December 15, 2017. This proposed change will align the Marketplaces with the Employer-Sponsored Insurance Market and Medicare, and help lower prices for Americans by reducing adverse selection.…

CMS Proposed Rule:…

CMS today released a new proposed rule allegedly designed to “protect patients” by stabilizing the plans offered in the ACA insurance exchanges. A cursory reading of the press release would tend to confirm this intent, but a careful reading of the release and especially the executive summary of the proposed rule will reveal that the rule is designed to improve the market for the insurers with a detrimental impact on potential enrollees of the insurance plans.

Revising the CMS rhetoric to match more accurately the actual impact on patients:

* Special Enrollment Period Pre-Enrollment Verification: Qualifying categories for special enrollment will be reduced, and documentation requirements increased. This will reduce the number of individuals with greater needs that the insurers would be required to accept outside of open enrollment – reducing adverse selection, but it will prevent many individuals who missed open enrollment because of the administrative burden from becoming insured.

* Guaranteed Availability: Insurers may apply premiums paid as a credit against unpaid premiums for the prior year, and then deny coverage because of non-payment for the current year. This will protect insurers from individuals who have difficulty paying the premiums, but at a cost of leaving individuals uninsured in spite of a good faith effort to pay current premiums.

* Determining the Level of Coverage: The insurers will be allowed greater flexibility in the variation of the actuarial values for the metal tiers. This greater flexibility will likely translate into less generous benefits for the beneficiary.

* Network Adequacy: The responsibility for regulatory oversight of network adequacy would be further shifted to the states. Although that would reduce the regulatory burden for the insurers, it would also threaten the adequacy of provider networks in states that have relaxed standards of how many physicians and hospitals would have to be included in the networks. Patients may find access to be impaired.

* Qualified Health Plan (QHP) Certification Calendar: Insurers would be allowed more time to incorporate benefit changes and maximize the number of coverage options available to patients. Allowing insurers more time to manipulate the benefits would allow them to reduce services more likely needed by the beneficiaries while increasing coverage for those services less likely to be used.

* Open Enrollment Period: The open enrollment period will be terminated six weeks earlier. This will protect insurers from many individuals with greater health care needs who often enroll later in the open period. This reduces adverse selection for the insurers but at a cost of leaving uninsured more individuals who have greater needs.

It is not only CMS that is catering to the insurers. Right now Congressional staff members are negotiating with representatives of the insurance industry to help write the replace and repair provisions promised by the politicians. It appears that the legislative proposals will be designed to protect and enhance the market for insurers, though at a cost of reducing the adequacy of coverage for the patients.

Why are we taking such good care of the insurers? We don’t even need them. We need a program that takes good care of patients – all patients. That would be an improved Medicare that includes everyone.