Imagine That! CMS to implement SEP eligibility verification, may tighten grace periods
I wrote the following back in early December:
I guess the question here is just how much verification the HHS Dept. and/or the assorted state-based exchanges are doing of these claims. In cases like getting married/divorced, giving birth, becoming a citizen or getting out of jail, I would imagine the verification should be pretty easy. However, the "Tax Penalty Ignorance" exception was pretty much based on an honors system, and I don't know how easy/difficult it is for the feds to "verify" that your income has increased/decreased substantially...at least, not until you file your taxes the following year, which could be up to a year after the claim is made.
...So, what's the solution to this, assuming the problem is widespread? Well, I can think of some obvious tweaks to the rules, almost all of which involve simply reducing grace periods:
- Shorten the 90-day Payment grace period down to 30 or 60 days.
- Shorten the 95-day Residency Documentation data matching grace period down to 30 or 60 days.
- Shorten the 3-month Individual Mandate grace period to 1 or 2 months.
- Shorten the 60-day grace periods for having a baby, getting married, etc. down to 30 days.
Beyond that, I'd imagine it's just a matter of tightening up the verification of any/all of the above, assuming that it's not being checked very thoroughly at the moment.
Here's Paul Demko in Politico, today:
Insurers blame the problem on lax rules that allow more than 900,000 people to sign up for coverage outside the standard enrollment season — for instance, when they change jobs or move — without sufficient proof they are eligible.
Health plans also complain some customers are exploiting a three-month "grace period" — when they can keep getting subsidized coverage even if they’ve stopped paying their share of premiums.
...Andy Slavitt...acknowledged the problems and said the administration would tighten the rules for special enrollments — and terminate coverage for those who found to have signed up improperly.
"There are some [special enrollment periods] that we need to clarify because they're subject frankly to abuse," Slavitt said...the administration would spell out its plans in the next week, and stressed that people who want coverage need to get it by the Jan. 31 deadline for the regular signup period.
...But plans say that people don't have to document they've changed jobs or lost insurance through work. America's Health Insurance Plans, the industry’s main lobbying group, has identified 41 reasons consumers can use to sign up for coverage outside of the standard window.
As I noted earlier, the verification thing should be fairly easy to take care of in most cases; log into your HC.gov or state exchange account and upload a scanned copy of the appropriate document. This, after all, is how your identity is verified when creating the account in the first place (or at least it was in 2013...I remember having to scan my driver's license and uploading it to HC.gov; they may have changed this since then).
...health plans want the administration to shorten the 90-day grace period in which consumers with subsidized plans can continue to receive coverage. They note many people have figured out they need pay for only nine months to get a full year of coverage.
Unfortunately, when it comes to shortening the long grace periods (which I actually suspect is a larger part of the problem), I'm not sure if that can be done without changes to the law itself...which would require Congressional action, which obviously isn't gonna happen anytime soon. I could be wrong about this, however, in which case it's a pretty easy change to make, I would imagine.
Oh, one more thing. Again, from Demko's article:
Aetna estimates that 25 percent of its HealthCare.gov enrollments last year came through special enrollments...UnitedHealth Group said last year that it expected 30 percent of its exchange enrollments to come outside the normal sign-up window...
...Through June of last year, about 10 percent of total enrollees through HealthCare.gov, or about 940,000 individuals, had signed up for coverage through special enrollments, according to administration figures. But there's no obvious reason why certain insurers would attract a disproportionate share of those enrollees.
I think I can clear this issue up: Remember, that 940K figure only ran through the end of June...and included 214,000 people who took advantage of the 6-week #ACATaxTime SEP for people who claimed they didn't know about the mandate tax penalty. HHS has already stated that they won't be repeating #ACATaxTime this year, but the larger point is that when Aetna and UHC say that 25-30% of their enrollments came during the off-season, you have to include the second half of the year as well.
If you subtract the #ACATaxTime number, that's 730,000 off-season SEP enrollees from 2/23 - 6/30, or 5,700 per day via HC.gov states, which likely means around 7,600 per day nationally. Assuming that number held true the second half of the year (through 11/15, anyway; after that coverage wouldn't start until January anyway), you have to add another 1.05 million or so. That means around 1.7 million more off-season enrollees. In addition, the 940K figure for the first half of the year doesn't include the SBMs either (California alone had 117K from 2/23 - 5/10 alone).
In short, instead of 10% of the total, off-season SEPs were likely closer to 2.9 million out of (11.7 + 2.9 = 14.6 million) = 20% of the annual total, which is much closer to the 25-30% that Aetna and UHC are claiming.
UPDATE: A similar article from the Wall St. Journal includes a tiny bit more detail:
A top federal health official said Monday that the administration will eliminate some criteria for late sign-ups and make other criteria language clearer. Andy Slavitt, acting administrator of the Centers for Medicare and Medicaid Services, who made his comments during a J.P. Morganhealth-care conference, didn’t provide further details.
...The changes, he said, will ensure so-called special enrollment periods serve their intended purpose.
He also said the agency has created an enforcement task force to ensure that people are being honest, and said the task force has terminated coverage for some consumers who didn’t have legitimate reasons for enrolling outside the deadline.
Hmmm...that doesn't really sound like actually requiring official documentation to verify the SEP eligibility, but it's a step in the right direction...