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Friday, 14 April 2017 09:49

The Final Market Stabilization Rule

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There is much uncertainty around what will happen with the Affordable Care Act, and the Individual Exchanges created by the ACA have suffered from:

  • carriers exiting the marketplace (in part due to the uncertainty over subsidies and enforcement of the mandate);
  • skyrocketing prices in many areas; and
  • concerns over the risk pool the market is attracting.  

Stabilizing the individual and small group markets is a top area of concern, and HHS issued final regulations for market changes on April 13, 2017.  

Carriers have claimed that changes are needed to promote continuous enrollment and to dissuade members from enrolling only when they are sick, which is a key factor in stabilizing any insurance market.  The Marketplace needs to be able to also attract the healthy to balance the needs of the sick.  Below is a brief description of the policy changes being made:

  • Shorter Open Enrollment Period to align with Medicare: Enrollees will only be able to get a plan between November 1 and December 15, 2017 (unless they experience a life event that allows them a Special Enrollment Period), and those plans will have a January 1st effective date.
  • Guaranteed Availability Change and Promotion of Continuous Coverage: This provision allows for a carrier to collect premiums for past unpaid coverage before re-enrolling the member for the next year, and they can deny renewal to someone who has not paid their past years’ premiums with that same carrier. 
  • Limitations on Special Enrollment Periods: The definition of an SEP is now more restricted, insurers have the right to require more verification of eligibility, and mid-year plan metal level upgrades (for example Bronze to Gold), will no longer be allowed.
  • More Consumer Choice: Greater flexibility on the actuarial value of a plan was created, to be able to offer more lower-cost plans to attract the healthy individuals needed to stabilize the risk pool.
  • States in Charge of Network Adequacy and Plan Design: CMS will defer to states that have a good review process to determine network adequacy for residents of that state.  Many Exchange plans have a limited network, which helps the member save on premium but definitely limits their provider choice.  The rule states that certain “Essential Community Providers” such as hospitals in the area must be included in the networks.
  • Good Faith Compliance Policy: HHS will defer to state regulators to manage and review the status of qualified health plans, including benefits covered and cost-sharing measures.

Unfortunately, no mention was made in the regulations as to whether Congress will continue to support funding for cost sharing subsidies that help qualified lower-income individuals with their deductibles and out-of-pocket maximums. It is also unclear whether the individual mandate will be enforced going forward, which many believe may de-stabilize the markets further.

For more information about how these new rules could affect individuals, check out the article 5 Ways the New ACA Rules Will Change Health Insurance Sales. And as always, be sure to contact us with any questions at all!

Read 764 times Last modified on Friday, 28 April 2017 14:39
Tonya Young

Tonya is our Senior Account Manager and brings eleven years of prior insurance company expertise to Fall River, having worked at Anthem Blue Cross and Great-West Healthcare (now part of CIGNA). Tonya holds a Bachelor of Science in Psychology from Texas A&M University. Originally from Minnesota, she loves the Colorado outdoors and enjoys family time with her young daughter.