Time: D H M S

BREAKING: CMS extends transitional plan cut-off date 3 months.

Last week I decided to check in on the "grandfathered/transitional plan" situation and attempted to do some crude back-of-the-envelope math to try and get a rough idea of just how many people are still enrolled in these non-compliant policies, and how many may still be enrolled in them a year and a half from now.

Under the ACA, people in grandfathered policies (ie, those which they were enrolled in prior to March 2010 and which haven't been noticeably changed since) are allowed to keep those policies as long as they want to, even though they aren't ACA-compliant. The carrier can drop the plan if they wish, but if they don't, the enrollee can stick with it pretty much forever. Transitional plans (otherwise known as "Grandmothered" plans), however, are the ones which aren't ACA-compliant but which people enrolled in between March 2010 and October 2013. Those plans, which were originally supposed to be End Of Lifed as of 12/31/13, were given two extensions: The first bumped them out by 1 full year; the second bumped them out by an additional 2 years...or, actually, 2 3/4 years. For reasons which I've never quite been able to understand, the actual cut-off date for these policies was September 30, 2017.

Anyway, my sloppy math projected that there might be perhaps 400,000 people still on "grandfathered" plans by next fall, and perhaps 200,000 still on "transitional" plans...on the individual market. As InsureBlog writer Patrick Paule reminded me, that doesn't include millions of small group plan enrollees who are likely still enrolled in "transitional" plans as well.

In any event, 5 days ago I tweeted out the following:

@LouiseNorris BTW, why on earth do grandmothered plans expire on 9/30/17 instead of New Year’s?

— Charles Gaba (@charles_gaba) February 25, 2016

@charles_gaba renewals for one more year, and the 2nd extension allowed for renewals for 2 additional years.

— LouiseNorris (@LouiseNorris) February 25, 2016

@patpaule @LouiseNorris right, but I meant why not cut them off on 12/31/17 instead of 9/30/17?

— Charles Gaba (@charles_gaba) February 25, 2016

Well, guess what was just announced yesterday?

We are committed to smoothly bringing all non-grandfathered coverage in the individual and small group markets into compliance with all applicable PHS Act sections, including those relating to single risk pools, no later than 2018. Therefore, we will extend our transitional policy to policy years beginning on or before October 1, 2017, provided that all policies end by December 31, 2017. Specifically, States may permit issuers that have renewed policies under the transitional policy continually since 2014 to renew such coverage for a policy year starting on or before October 1, 2017; however, any policies renewed under this transitional policy must not extend past December 31, 2017. We will work with issuers and States to implement this policy, including options such as allowing policy years that are shorter than 12 months or early renewals with a January 1, 2017 start date. This approach will facilitate smooth transitions from transitional coverage to Affordable Care Act-compliant coverage, which requires a calendar year policy year in the individual market.

As Paule clarified:

@charles_gaba @LouiseNorris insurers will be filing 15 month rate guarantees with 10-1-16 effective dates. Also 14 and 13 mo guarantees.

— Patrick Paule (@patpaule) March 1, 2016

In other words, next year's policy rates will be locked in to coincide with 12/31/17 regardless of when they actually start to line everything up with the calendar year, which makes total sense to me.