BREAKING: CMS "Clarifies, Eliminates & Enforces" Special Enrollment Periods

Back in early December there was a lot of discussion/debate about whether or not people were using Special Enrollment Periods to "game the system". The idea is that people may be waiting until after Open Enrollment ends, ginning up a "qualifying life event" to enroll off-season, quickly arranging for a bunch of pricey healthcare services/procedures and then dropping their policy as soon as possible. By taking advantage of the various lengthy grace periods as well as loose enforcement of those qualifying events, the concern is that insurance carriers are losing millions of dollars due to people who, to put it diplomatically, aren't taking the "spirit" of the ACA's coverage requirements to heart, so to speak.

As I noted at the time and reiterated a week ago, my own solution to this issue (however extensive it may or may not be) was pretty straightforward:

...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.

Well, today CEO Kevin Counihan has posted a new blog entry which addresses these very issues:

One of the areas we have been reviewing closely is the special enrollment periods we offer. Special enrollment periods are an important way to make sure that people who lose their health insurance during the year or who experience a major life change like getting married or having a child, have the opportunity to enroll in coverage through the Marketplaces. People who experience these qualifying events have the opportunity to enroll in coverage outside of the normal Open Enrollment period from November 1 to January 31, similar to how enrollment works in the employer market. In addition, in the first two years of the Marketplace, a number of special enrollment periods were created for consumers who were still learning how to enroll in coverage for the first time.

As the Marketplace matures and consumers learn more about how and when to enroll, we continue to review the rules around special enrollment periods in order to keep them fair for consumers and for issuers. We are taking initial steps in adjusting how special enrollment periods work – and will continue to make further adjustments in the future based on what we learn from continued monitoring and analysis of special enrollment period usage and compliance.

The action we are taking today announces the elimination of several unnecessary special enrollment periodsclarifies the definitions of other special enrollment periods, and provides stronger enforcement so that special enrollment periods serve the purpose for which they are intended and do not provide unintended loopholes.

OK, sounds good...let's hear the specifics:

Eliminating Unnecessary Special Enrollment Periods: Last month, we announced that the Tax Season special enrollment period will no longer be offered. Today we are announcing the elimination of six other special enrollment periods that are no longer needed. Just as the Marketplace evolves, so too does consumer behavior. The rules we use to operate the Marketplace need to keep up with these changes. As such, special enrollment periods are no longer available for:

  • Consumers who enrolled with too much in advance payments of the premium tax credit because of a redundant or duplicate policy
  • Consumers who were affected by an error in the treatment of Social Security Income for tax dependents
  • Lawfully present non-citizens that were affected by a system error in determination of their advance payments of the premium tax credit
  • Lawfully present non-citizens with incomes below 100% FPL who experienced certain processing delays
  • Consumers who were eligible for or enrolled in COBRA and not sufficiently informed about their coverage options
  • Consumers who were previously enrolled in the Pre-Existing Condition Health Insurance Program

I'll be perfectly frank: I didn't even know any fo the above were considered a "qualifying life event", although most of them seem to fall into the general category of "bugs in the system" on CMS's part. Still, fine; if those problems don't exist any longer and they aren't relevant anymore, chuck 'em to the curb.

Clarifying Eligibility: Our review of current special enrollment periods also showed that some of the eligibility guidelines need to be further clarified so consumers can understand the intent and so they will not be abused. Today we are updating guidance to more clearly define the special enrollment period that is available to consumers who permanently moved, and as a result, gained access to new health plans. Specifically, we clarify that this special enrollment period cannot be used for a short-term or temporary move where the consumer doesn’t plan to stay in their new location, including situations in which a consumer is admitted to a hospital for treatment in a different area. This clarification is intended to assist consumers, brokers, issuers and others in understanding who is eligible for this special enrollment period.

Huh. It sounds like this refers to a situation where, for instance, you live in Detroit and are scheduled for treatment for a few months at the Mayo Clinic in Minnesota, so you arrange for an apartment to live at until your treatments are done. Yeah, I get their point; that really doesn't "count" as "moving" in my book, either, and yeah, you really should've arranged for coverage before "moving" to Minnesota. Again, not something would have even thought of.

Enforcing the Rules: Finally, we will take steps to make sure that consumers understand and comply with the rules. We will conduct an assessment of plan selections that are made through certain special enrollment periods to evaluate whether consumers properly accessed coverage. Our program integrity team will pull samples of consumer records nationally and may request additional information from some consumers or take other steps to validate that consumers properly qualified for these special enrollment periods. The findings from the assessment will help us to inform future policy and operational improvements to enhance program integrity. Additional details will be provided in the coming weeks.

 We will also emphasize more strongly to applicants that the law requires that consumers provide accurate information to the Marketplace, and they may be subject to penalties under federal law if they intentionally provide false or untrue information.

It sounds like this is likely to be make the biggest difference of the above. I figured they'd require everyone to upload a scanned copy of their documentation (marriage certificate, employment termination notice, jail release notice, etc), but apparently they're gonna go with more of a "random IRS-style audit" sort of thing, which I suppose could work as well.

Worth noting: CMS doesn't say anything about shortening any of the grace periods (which I actually suspect is the bigger part of the problem, however large/small it is). This strongly suggests that those can't be shortened without actually modifying the wording of the ACA itself, which would, of course, require Congressional action, which obviously isn't gonna happen anytime over the next year at lest.

Even so, all of these changes are welcome, and announcing them now (when there's still 12 days to go in the Open Enrollment Period) is a smart move. Mr. Counihan has now officially put any potential "gamers" on notice that they're gonna be on the lookout for this sort of thing this year, so it'd be a smarter idea to go ahead and sign up now instead of stretching things out until March or April and hoping to jerry-rig together an exception.