Individual Health Insurance Markets Stabilization Final Rule

April 13, 2017 by CMS

The Centers for Medicare & Medicaid Services (CMS) issued the final Market Stabilization Rule, to help lower premiums and stabilize individual and small group markets and increase choices for Americans.  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 carriers exiting the market.

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

2018 Annual Open Enrollment Period: The final rule adjusts the annual open enrollment period for 2018 to align with Medicare more closely.  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.

Reduce Fraud, Waste, and Abuse:  The final rule promotes program integrity by requiring individuals to submit supporting documentation for special enrollment periods (SEP) and ensures that only those who are eligible can 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.  Anyone applying for coverage under a SEP requires pre-enrollment verification of eligibility.  Consumer will be given 30 days to provide documentation of the SEP and the effective date will be retro-active to the date of the plan selection.

A second set of rule changes for SEP’s is to limit metal level change options.  In particular, for a person with a SEP on a current metallic plan, they would not be able to upgrade the metal level when experiencing a SEP.  Example:  birth of child, no metal change for family without change of tax credit eligibility.

Eligibility Limits:  The rule limits the SEP for marriage to only allow enrollment if at least one partner had minimum essential coverage or lived outside the United States or in a United States territory for one or more days during the previous 60 days.  Consumers claiming a SEP due to a move would also have to show proof of prior coverage for one or more days within the 60 days prior to the move.  Documentation of the move would be required as well showing both the previous address and the new permanent address.

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.

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.

Empower States & Reduce Duplication:  The final rule reduces waste of taxpayer dollars by eliminating duplicate 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.

Please note:  Insurance Carriers have until 6/21/2017 to determine if they will offer plans in the individual exchanges for 2018 (previously, the deadline was 5/3/2017).

The final rule can be found, here: https://s3.amazonaws.com/public-inspection.federalregister.gov/2017-07712.pdf

Recent statistics related to the Affordable Care Act:

  • Approximately 1/3 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% from 2016-2017.
  • Approximately 500,000 fewer Americans selected a plan in the exchange open enrollment in 2017 than in 2016.
  • Many states saw double digit increases in their insurance premiums including: AZ – 116%, OK – 69%, TN – 63%, AL – 58%, PA – 53%

For more information contact:
Corporate Benefits Network, Inc.
(727) 381-9288
www.corporatebenefitsnetwork.com
concierge@corporatebenefitsnetwork.com