HHS issues 6 major ACA exchange changes for 2018 (while simultaneously trying to kill the ACA)

In a classic case of trying to have it both ways, the Trump Administration is simultaneously taking every action it can to damage/kill the ACA while also taking actions which are supposedly attempting to stabilize it. This is leading to some very...interesting...results, such as this press release sent out an hour or so ago:

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

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.”

("while future reforms are being debated", aka "we don't have the slightest idea if, when, or how the GOP actually intends to kill off the ACA, so we're slapping these regulations together in the meantime).

The funny thing is that four of the six changes aren't necessarily bad ideas (that is, they may be, but they're at least worth consideration):

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 HealthCare.gov 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.

I was actually among those who called for off-season enrollment to require documentation/verification last year, and the HHS Dept. did indeed start implementing this policy starting last summer, although until now they were only requiring pre-verification of 50% of SEP enrollees (basically, they were "spot-auditing" half of those who tried to sign up). It sounds like they're gonna make it mandatory for 100% of SEP enrollees going forward.

As I noted last year, I don't know how much of an issue SEP abuse actually is, but if it's a legitimate problem, this doesn't seem unreasonable to me.

  • 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.

If I understand this correctly, currently, if you enrolled in an exchange policy for 2016 but didn't pay a premium or two, you were still allowed to come back and renew your policy for 2017. If this was the case, then unless I'm missing something, this change is a reasonable one.

  • 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.

DANGER, WILL ROBINSON. If I'm understanding this correctly, it basically would allow the carriers to water down the actuarial value of the policies at each metal level while still claiming that they qualify for that designation. In other words, right now, Bronze, Silver, Gold and Platinum plans have to cover ~60%, ~70%, ~80% and ~90% of healthcare costs respectively, with 2% wiggle room (ie, a Silver plan can cover 68% and still be considered "Silver"). This would double that wiggle room to 4% (ie, 66% would still be considered "Silver"). Again, it's more complicated than that, but this strikes me as a very bad idea, as it completely defeats the whole "Metal Level" concept and opens the door to the slippery slope towards "mini-meds" or "junk policies".

  • 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.

POSSIBLE DANGER, WILL ROBINSON. This is a "federal vs. state" thing. Right now, CMS reviews/determines whether or not the doctor/hospital networks are adequate to qualify for ACA exchange listing; this change would kick that authority back to the states. This is probably no big deal for some states, but obviously opens up a lot of potential for abuse in others.

  • 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.

This is an easy one: Until now, the initial deadline for filing to participate in the exchanges in 2018 was between April and May, just a couple of months from now. Given that the GOP is still farting around with their "replacement plan", HHS is now giving the carriers more time to decide whether they're in or out for next year.

  • 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.

Assuming the ACA is still in place at all by November, this will actually be the single most obvious change to the public: Instead of a 3-month window for Open Enrollment, they're slicing it in half down to just 6 weeks, from 11/01/17 - 12/15/17.

I have mixed feelings about this change. On the one hand, it's dramatically reducing the amount of time people have to sign up, which could leave a lot of people out. The end date has been 1/31 of the following year for 2 years straight now, so people are getting used to it; slashing the time in half will cause quite a bit of confusion.

On the other hand, it is true that most other Open Enrollment Periods (for large employers, Medicare and so on) are already much shorter than the ACA exchanges have been to date. The first open enrollment period ran a full 6 months due to it being a brand-new thing which no one was familiar with...and even then, it was bumped out by another two weeks due to the huge technical problems the exchanges had at launch. It was dropped back to 3 months (with 1 extra week tacked on) for 2015, and has been 3 months even for the past two years.

Furthermore, the 6-week change was already in the works for 2019 under the Obama administration, so all HHS is really doing here is bumping that up by a year.

Anyway, as I said, 4 of the 6 changes don't bother me much, and a couple I'm actually in favor of, but two of them are setting off big red flags for me.

What's also interesting here is what didn't make the cut: The silly "3.49 rounds down to 3" gimmick that they were planning on trying to pull in order to widen the range of what carriers are allowed to charge older people (right now they can only charge 64-year olds 3x as much as 18-year olds). I guess they realized there was no way in hell that would get past a judge, as Nicholas Bagley noted.

In short, as Larry Levitt of the Kaiser Family Foundation put it: