HHS Proposed Rule Changes on Special Enrollment Periods

Health Insurance

September 27, 2016

The Affordable Care Act continues to draw debate from politicians, particularly as we head into the presidential election this November. Open enrollment for 2017 starts just a few days before the national election, so both candidates need to offer strong options for strengthening, revising or replacing the current health care law depending on their stances. Regardless of who becomes president, Obamacare will remain the law of the land at least through the upcoming enrollment season. As a result, the Department of Health and Human Services (HHS) wants to strengthen enrollment for this year while creating incentives for increased insurer participation in the future.

Enrollment is crucial to the success of the ACA. The health care law depends on young, healthy individuals supporting those with health problems who require extra care. So far, enrollment from the young demographic has not been as strong as the administration expected or hoped. For 2017 and going forward, the HHS and the Centers for Medicare and Medicaid Services (CMS) want to expand outreach efforts to boost enrollment.

The administration also wants to make sure that obstacles are removed that make insurer participation more taxing for carriers. In our final post on the HHS Notice of Benefit and Payment, we’ll discuss some of the proposals that the government hopes will enhance consumer enrollment and insurer participation in the future.

Strengthening Enrollment and Insurer Participation

Strong enrollment matters to the long-term effectiveness of Obamacare. The government is constantly looking for ways to enhance enrollment, especially among young and healthy Americans. There’s also been a recent push to encourage greater participation among insurers due to the exit of major players like Aetna, United Healthcare and Humana. As a result, the HHS notice calls for strengthening enrollment and insurer participation across the marketplace. Specifically, they want to:

  • Ensure that consumers understand the function of special enrollment periods
  • Clarify coordination of benefit rules among the exchanges, Medicare and Medicaid to limit abuse, and ensure that providers and consumers are aware of what’s going on
  • Develop a new outreach strategy targeted toward young adults
  • Get more information on suggestions that they’ve received from the medical community, insurers and consumers on ways to improve risk pool calculations
  • Gauge whether a certain percentage of fees from the federally facilitated marketplace should be used on outreach

Special enrollment periods (SEPs) allow consumers to sign up for health insurance outside of the normal enrollment season due to qualifying life events. So, for instance, if you move to a new state or have a baby, then you can sign up for health insurance without being penalized for late enrollment. It’s a great program for people who need the extra time, but it’s also a chance for people to game the system. Abuse happens.

To reduce misuse of SEPs, the government instituted a new confirmation process in 2016 that requires documentation for taking advantage of an SEP. This year, the CMS is requesting information on how to take additional steps to reduce instances of SEP misconduct. They also want to make sure that the laws and rules on SEPs are clear so that consumers understand their rights — and avoid unintentional or intentional abuse.

Along the lines of abuse, one of the goals of the ACA was to crack down on fraud as it relates to Medicare. To that end, this year the CMS is going to clarify the coordination of benefits rules across multiple sources of health insurance. When you have more than one health plan — for example, you have health insurance through Medicare while you’re also covered under your spouse’s work-sponsored plan — your doctors have to submit multiple claims, first going through your primary insurer and then billing a secondary payer to cover the total cost. This is called the coordination of benefits.

This system is designed so that insurers don’t overpay and beneficiaries get the coverage that they’re paying for. But the system isn’t perfect, and the government wants to make sure that people understand the coordination of benefits rules as they relate to the marketplace and government-sponsored programs, specifically Medicaid and Medicare. Clarifying these rules will also help insurers to avoid overpaying and losing money, which could in turn encourage them to participate more fully in the marketplaces.

The HHS notice also discusses outreach and enrollment, especially among young adults. Younger people tend to need fewer medical services compared with their older counterparts.  If more healthy individuals sign up for coverage, then insurers will be able to offset the cost of care across a wider pool of beneficiaries. This would presumably drive down prices and premium rates.

The CMS is asking for comments on suggestions that they’ve previously received from members of the medical community, insurance companies and consumers on how to improve the risk pool. They also want to know if allocating a percentage of fees, drawn from the federally facilitated exchange, for outreach is a good idea. Comments on the HHS notice are being accepted through early October, and the full text of the notice can be found on the Federal Register website.