CMS Aims to Bolster ACA Marketplace Plans
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The public health insurance marketplaces created by the Affordable Care Act (ACA) generally limit sign-ups to a single enrollment period per year, but millions of additional sign-ups have occurred through SEPs. For instance, nearly 950,000 enrollees signed up for coverage through the federal marketplace using an SEP in the first half of 2015, according to a CMS report.
A growing number of insurers have complained that those SEPs are inflicting steep losses, however, because the sickest patients have the largest incentive to use them. Some insurers also have reported seeing widespread abuse of special enrollments, which can occur at any time if enrollees meet certain requirements.
"Now, SEPs play an important role for consumers, but we're making changes so that as the marketplace matures SEPs serve the purpose they were intended," Slavitt said in a
Such eliminations would build on the discontinuation of a 2015 tax-season SEP, which CMS credited with garnering nearly 144,000 enrollees in the federal marketplaces.
Slavitt declined to specify which SEPs will be eliminated, but said the list would include "certain other select sets" and would be announced later this week. The agency also will clarify other SEPs "to prevent bad actors from signing people up for insurance inappropriately."
"We've established an enforcement unit and have already terminated coverage for people who were improperly enrolled by certain brokers," Slavitt said.
The planned changes follow CMS's previously announced proposed plans to allow a marketplace to initiate cancellation or retroactive termination of an enrollee's coverage if it determines that the enrollment was due to fraudulent activity. The changes discussed by Slavitt were separate from those previously proposed changes, a CMS spokesman says.
Insurer Concern
Industry sources say SEP abuse is major concern for insurance companies offering plans in the ACA marketplaces.
Those concerns were highlighted by UnitedHealthcare when it announced in November that it expected to lose hundreds of millions of dollars on ACA marketplace plans in the fourth quarter, and was considering leaving the marketplace as a result.
Meanwhile, Aetna officials say the company was losing money on the exchanges and cite financial losses from people who enrolled during SEPs and then dropped their insurance after they received healthcare services.
"SEPs are negatively impacting the overall risk pool of exchange enrollees, resulting in higher costs for plans, and ultimately higher costs for all consumers," BCBSA writes in a
Other changes sought include CMS verification that enrollees who are granted an SEP because of a permanent relocation previously had coverage, and creation of a process to ensure that the SEP for loss of affordable coverage is not used by enrollees who lost coverage because they stopped paying premiums.
"We are concerned that the current risk pool is out of balance with a disproportionate number of people who need significant healthcare services and a growing population of individuals that do not enroll for 12 months of continuous coverage," BCBSA writes.
Enrollees during SEPs used up to 55 percent more services than their open enrollment counterparts, suggesting they were either sicker or waiting until they needed care to enroll, according to BCBSA.
The insurer group notes that SEP enrollment proportions among the 37 federal marketplaces are lowest in
Other Changes
Additional steps aimed at helping ACA marketplace plans include CMS's plans to provide early estimates of health-plan-specific risk-adjustment calculations.
"Along with the newly launched backend automation, this will give plans more timely information in order to facilitate informed rate setting," Slavitt says.
CMS also will host a
"We have the tools to make certain the proper incentives exist to insure sicker populations," Slavitt says.
Plan Evolution
Slavitt describes the ACA marketplaces as still in the early stages. "Consumers are still getting educated and health plans are experimenting with the right product and network designs," he says.
One part of that plan evolution appears to be toward limited provider networks. For instance, the share of HMO and EPO plans in the ACA marketplaces increased from 41 percent in 2015 to 52 percent in 2016, according to a Januaiy BCBSA report. Meanwhile, between 2015 and 2016, the share of PPO plans declined from 33 percent to 26 percent of the total. And during the same period, the share of counties where an HMO was the lowest-cost silver plan rose from 47 percent of counties to 58 percent.
"Those changes reflect the challenge of serving many members with previously unmet, ongoing health care needs by providing greater care coordination and cost-effective choices that enable consumers to have lower out-of-pocket costs," the BCBSA report states.
The report also identifies some erosion in the availability of ACA. plans, which declined from an average of 50 plans in 2015 to 44 plans in 2016 in urban markets and declined from 36 plans to 32 plans in rural markets.
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