Coffee CAHC is a twice-weekly newsletter where we round up and comment on the latest health coverage policy developments both nationally and here in Maine. We hope you find these updates helpful!
115th Congress, 1st session
128th Maine Legislature, 1st session
April 14, 2017
Happy Friday! It’s a gorgeous sunny day out there, and a long weekend ahead, and the Trump administration took a huge step yesterday to make it harder and harder for consumers to be well-served by the ACA, and the forecast for the weekend looks warm and beautiful…
(I tried to help by sandwiching the bad thing in the middle of all the good stuff, did it help?)
I’ll start with the “simpler” thing. Yesterday, President Trump threatened to halt cost sharing reduction payments as a negotiating tactic to force Democrats to work with him on repealing/replacing the ACA.
I make a sincere and careful effort to try and keep Coffee CAHC free of too much blatant editorializing, but I want to be very, very clear about what we think of this threat. CSRs, as I’ve mentioned in previous Coffee CAHCs, are a vital, crucial component of making coverage affordable and accessible for lower-income consumers.
Publicly toying with the idea of stopping those payments isn’t some wily, canny bargaining chip play: it’s a fundamental, existential threat to not only the Marketplaces themselves, but the millions of consumers who rely on the ACA for their coverage. And I don’t mean only those consumers who receive CSRs. Insurers have been explicit that if CSR payments go, many of them will abandon the Marketplaces entirely. It’s shocking that any President would blithely express such cavalier disregard for the health, safety, and wellbeing of the millions of Americans who depend on the ACA.
As it turns out, the threat seems to have backfired. Condemnation was swift, and Congressional Democrats are furious. And in case the President hasn’t noticed, Americans are pretty clear about who they will blame if the ACA collapses now: you break it, Mr. President, you buy it.
But, hey, as we’ve said before, it doesn’t take Congressional action on wholesale repeal/replace for the Administration to do enormous damage to the ACA. Remember a month or two back, when we were talking about a proposed rule from HHS that would make some pretty significant changes to the Marketplaces? That rule went from “proposed” to “finalized” yesterday, and it’s a doozy. I’ve been browsing all 139 pages this morning to give you the highlights.
- The enrollment period has been shortened for this year. It was originally scheduled to go from November 1, 2017-January 31, 2018. Now the window is down toNovember 1, 2017-December 15, 2017.
- 100% of “special enrollment period” (SEP) enrollments will now require verification, and SEP eligibility will have to be verified before benefits start. SEPs are when consumers need to enroll in a plan outside of the regular open enrollment period – typically because they moved to an area that has different plans available, or lost other coverage for some reason. Currently, some consumers have to verify their eligibility, but their plans can take effect while everything is verified, and they have 90 days to submit documentation. Now, consumers will have only 30 days from enrollment to get documentation in for verification, and their plans will be “pended” until that documentation is confirmed. This is huge, huge, huge (and, obviously, bad, bad, bad), especially since we deal with lots of cases on our HelpLine every year with consumers who encounter difficulty getting the Marketplace to correctly receive and verify their documentation. Throwing a massive amount of new work at the Marketplace verification center seems certain to go poorly.
- Consumers will no longer be able to change “metal levels” if they qualify for an SEP. “Metal levels” are the Bronze, Silver, and Gold designations for plans that are basically shorthand for how much you pay in premiums vs. out of pocket costs (bronze plans: lower premiums but higher deductibles, gold plans vice-versa). Right now, enrollees are able to change metal levels mid-year under certain circumstances, but the new rule seems to preclude that.
- Insurers will now be allowed to apply premium payments to any overdue balance from the past 12 months before applying it to new premiums. This is bad for consumers who may have missed premium payments in the past for various reasons who try to re-enroll down the road.
- Now, the most complex thing! The rule as adopted messes with the allowed “de minimis” variation in actuarial value. This gets really wonky and math-y, but in a nutshell it means insurers can get away with making less generous plans.
“Actuarial value” is what percentage of costs “for an average population” are paid by the plan instead of the enrollee. When we say a bronze plan has a “60% actuarial value”, insurers are currently allowed some wiggle room on that 60%: their plans can be within 2 percentage points above or below 60. This is because costs change year to year, hitting a precise target is difficult, and there’s benefit to having a variety of products available within the same metal level (slightly lower premiums for slightly higher out of pocket costs, or vice versa, among different bronze plans, for instance).
But the new rule allows pretty massive huge variations: instead of +2/-2, plans can go -4/+2. That’s a 6% range – and remember, there’s only a 10% difference between the metal levels as is (Bronze “60%”, silver “70%”, gold “80%”). So a silver plan could in fact have an AV range between 66% and 72%. That means lower premiums, but higher out of pocket costs, if they dip down to 66%.
And as Tim Jost points out, that could mean lower tax credits for everybody. If the benchmark plan is one of these lower-premium-but-less-generous silver plans, that will knock premium assistance down for everybody who gets it. Yikes.
- Finally, HHS is going to allow plans to have skinnier, narrower networks than what is currently allowed, by changing the percentage of “essential community providers” that a plan is required to contract with. ECPs are facilities that “serve predominantly low-income, medically underserved individuals” (thanks, Tim Jost!). Think FQHCs and hospitals. Right now, plans have to contract with 30% of ECPs in their network area. HHS is knocking that down to 20%. They’re also leaving network adequacy review up to the states.
Anybody who’s interested in reading the whole thing can check it out here. The overall impact, we feel, will be making it a lot harder for consumers who need coverage to enroll at times when they often need it the most.
Insurers love to talk about “fraud” with SEP enrollments, but their only “evidence” of fraud is that SEP enrollees tend to cost more than general enrollees. Well, sure: SEP enrollees are often in periods of significant fluctuation, they’re usually coming in to the market because they’ve lost other coverage (most come in because they lost employer-based coverage), and there’s reason to think that only the people most motivated to keep coverage – e.g. people who need their coverage – are the ones who are going to follow the process through to make sure they keep it.
There’s also this idea that somehow, SEP enrollees are “gaming” the system. Uh, yeah, about that…
We make it our jobs at CAHC to study and understand the system and help people through it. You know what? It’s a complicated, complex, at times opaque system even for a dedicated staff with special training in how to navigate it. We get calls all the time from smart, savvy people who have done all of their homework to try and figure it out and are still at a loss. There are protections in place to detect, report, and take action against fraud. There are already safeguards in place to require documentation from SEP enrollees to verify their eligibility. I am baffled by this idea that there is this huge pool of sick supergeniuses who have figured out a way to “game” the system. I just don’t see it.
And the “funny” thing (not “ha ha” funny, more *facepalm* funny) is this: even though insurers say these new rules were necessary to help stabilize the risk pool (e.g. make sure those “fraudulent” people who are “gaming the system” and driving up costs stay out), we think this will have the exact opposite effect. Only the sickest, most expensive people – the ones who truly, desperately need their coverage – will be the ones who stick through this process to make sure they stay covered. Anybody who’s healthy and just wants coverage for peace of mind, or to avoid the penalty? They’re gonna throw their hands up and say “forget it.” We think there’s much greater potential for these rules to cause harm than good.
Don’t worry, no huge budget-process lessons in here today! Nothing much to report since Wednesday.
Last night, yours truly was part of a community forum in Belfast about the future of health care. Big, big kudos to the organizers, and to the thirty or so midcoast residents who turned out on a Thursday evening to talk about health care. I was so impressed by the questions from the attendees. It does me some good to see that folks are not only paying attention to what’s going on with the future of health care in Maine and the U.S., but are taking it upon themselves to stay active and engaged in the process to safeguard our health care system.
Would you like to know more?
Tim Jost, as always, knocks it outta the park with his analysis of the finalized rules.
Here’s some great info from the Center on Budget and Policy Priorities about why insurer claims about “fraudulent” SEPs are to be taken with a huge chunk of salt.
Until next time, friends, I remain,