The Center for Medicare and Medicaid Services, the agency of the U.S. Department of Health and Human Services that oversees HealthCare.gov, is proposing some big changes to stop the exit of commercial health insurers cutting out—or back—on the public exchange market.
The proposed changes still lack a lot of detail and won’t be coming in time for the 2017 benefits enrollment season that starts Nov.1, but the federal government on Monday said it wants to overhaul the risk adjustments limits, or how the mix of healthy versus sick policyholders is spread out among insurers on HealthCare.gov. The Center for Medicare and Medicaid Services also wants to standardize coverage on the public health exchange offered by health insurers, and better spread around the risk of high-cost plan enrollees.
The biggest proposed change is a better adjustment of providing coverage from plans with lower-risk enrollees to plans with higher-risk enrollees. Insuring high cost enrollees is the chief reason multiple big insurers including United Healthcare, Aetna and Humana cite for cutting back or eliminating participation altogether in the public exchange market.
“Along with helping issuers cover enrollees with more serious health needs, we also recognize the importance of balancing the mix of enrollees in the marketplace risk pool,” says HealthCare.gov CEO Kevin Counihan.
For the 2018 benefits enrollment season the risk adjustment program would be updated with more data on patient drug costs. Other proposed changes include
- Clarifying several special enrollment periods that are already available to consumers to ensure the rules are clear and to limit abuse.
- Clarifying coordination of benefit rules between Medicare, Medicaid and HealthCare.gov.
- Using prescription drug utilization data to improve the predictive ability of risk adjustment models.
- Establishing methods to better spread the risk of high-cost enrollees.
Going forward the Center for Medicare and Medicaid Services also is proposing standardizing coverage to make it easier for health insurers to write policies and continue to participate in HealthCare.gov. Specifically, based on analysis by the Kaiser Family Foundation, HealthCare.gov would offer six new standardized plan designs to enable consumers to better compare plans. The federal government is developing a simple choice plan at three levels bronze, silver and gold and three more silver options for people who qualify for cost-sharing reductions based on their income, Kaiser says.
In these plans, the deductibles and annual limits on out-of-pocket spending also would be standard, Kaiser says.
“As the marketplace continues to grow and mature, one of our most important priorities is to study data, listen to a range of market participants, test out different approaches and adapt to what we see and hear,” Counihan says.
The proposed rules will go through a review period by the healthcare industry, Congress and other government agencies before any—or all—of the proposed changes are made permanent by the Center for Medicare and Medicaid Services. A timetable has yet to be set.
The changes also come at a time when more healthcare insurance companies are pulling back from or altogether out of the public exchange market because of an inability to control costs and write profitable coverage.
When the Patient Protection and Affordable Care Act of 2010, also known as Obamacare, was passed and the public health exchange market was launched four years ago it was anticipated that greater numbers of younger and healthier consumers would sign up for coverage, says Pat Kennedy, founder of healthcare payments consulting firm PJ Consulting.
Of the 12.7 million consumers that signed up for new coverage or renewed existing coverage on Healthcare.gov for the 2016 benefits enrollment season, shoppers ages 18 to 34 only accounted for about 2.7 million consumers, or 21%, of all shoppers buying insurance online, says the U.S. Department of Health and Human Services.
“There’s not one big health insurer that I know of that’s making money on the public exchanges,” Kennedy says. “The number of younger and healthier people that were supposed to be buying insurance to offset sicker and older people buying coverage on the exchange never materialized.”
It’s too early to say if big insurers that have already pulled back or out of HealthCare.gov will return, say healthcare insurance payments analysts. In light of any proposed changes many insurance companies are adopting a “let’s wait and see” attitude toward public exchange markets. Even more change will come in the years ahead given the young age of the public exchange market, says Stanley Nachimson, principal of healthcare payments consulting firm Nachimson Advisors. “People tend to forget this is a brand new market,” he says.
Date: September 02, 2016