The insurance industry cheered the Trump administration’s proposed rule to shorten the sign-up period for Americans to choose health plans under the Affordable Care Act while also allowing premiums to be put toward past unpaid debts.
And why wouldn’t insurers be thrilled? The Trump administration did exactly what Aetna, Anthem, Blue Cross and Blue Shield plans and other insurers asked. The Obama administration had already begun to narrow periods that Americans could sign up for coverage and the Trump administration, through Health and Human Services Secretary Tom Price, is pacifying the insurance industry with even more favorable rules.
For example, the fall open enrollment for individual Obamacare coverage in 2018 will be cut in half to Nov. 1 to Dec. 15 of this year from Nov. 1, 2017 to Jan. 31, 2018.
“This change would require individuals to enroll in coverage prior to the beginning of the year, unless eligible for a special enrollment period, and is consistent with the open enrollment period established for the open enrollment periods for 2019 and beyond,” the proposed rule, posted by the U.S. Department of Health and Human Services, says. “We anticipate this change could improve the risk pool because it would reduce opportunities for adverse selection by those who learn they will need services in late December and January.”
Insurers say actuaries need to know who is paying the premiums, their health issues, ages and other characteristics to manage premiums and expenses that are paid in claims from risk pools. Allowing additional sign-up periods messes with insurer risk planning.
“We commend the administration for proposing these regulatory actions as Congress considers other critical actions necessary to help stabilize and improve the individual market for 2018,” said Marilyn Tavenner, CEO of America’s Health Insurance Plans (AHIP), the powerful health insurance lobby.
Insurers that include Aetna, Humana and UnitedHealth Group have scaled back participation in certain areas of the country after being unable to successfully manage the costs of sick patients signing up for coverage. They have all cited the need to reduce enrollment periods and prevent people from signing up for insurance only when they are sick and then later dropping coverage when they no longer need it.
Under the Trump administration proposal, which still faces a public comment period, those who signed up will also be vetted more closely for eligibility and insurers can also tack on a “premium payment to an individual’s past debt owed for coverage from the same issuer enrolled within the prior 12 months” as a way to cut down on people waiting until they are sick to sign up for coverage.
“We believe this proposal would have a positive impact on the risk pool by removing economic incentives individuals may have had to pay premiums only when they were in need of health care services,” the proposed rule says.
Just two weeks ago, during Anthem’s fourth-quarter earnings call CEO Joe Swedish offered “suggested changes” that included decreasing “the number of special enrollment periods, and requiring pre-verification of eligibility; address challenges with nonpayment of premium, grace periods, by requiring consumers to pay outstanding premiums before enrolling in new coverage with the same health plan.” The Trump administration’s proposed rule does all that.
On the same day Aetna chairman Mark Bertolini proclaimed Obamacare was in a “death spiral” at a Wall Street Journal forum he later praised new rules proposed by the Trump White House. “Secretary Price and the administration have taken some good initial steps with the proposed regulation,” Bertolini said in a statement.
But consumer groups see the insurance-friendly rules as an effort to “sabotage the Affordable Care Act, especially by making it much more difficult for people to enroll in coverage,” Ron Pollack, executive director of Families USA said. “By making it harder to enroll, they are creating their own death spiral that would deter young adults from gaining coverage, thereby driving up costs for everyone.”
Providers of medical care say it remains unclear whether giving the insurance industry the ability to charge more and offer less coverage will benefit consumers.
“We believe many of today’s proposals have the potential to make participation in the marketplaces more appealing to insurers and consumers, such as allowing insurers to offer less-expensive options,” Tom Nickels, executive vice president of the American Hospital Association said. “However, we will be reviewing them in more detail to ensure that they both improve consumer access to coverage and maintain important consumer protections including maintaining access to essential community providers.”
Date: February 13, 2017