Insurance Industry Split On Key Biden Exchange Proposals

Inside Health Policy

July 30, 2021 9:31 pm

Two of the nation’s key health insurance lobbies — AHIP and the Blue Cross Blue Shield Association — strongly oppose CMS’ plans to create a new monthly enrollment period for subsidy-eligible people earning 150% or below of poverty and to extend the open enrollment period for a month. But the lobbies representing community health plans that offer Medicaid managed care and exchange products back the SEP, and while they have differing opinions on the final deadline, they also support extending open enrollment for 30 days.

The agency had proposed these and numerous other policies, including upping exchange user fees, expanding navigator responsibilities and more in a draft rule out June 28 that CMS refers to as the third installation of the 2022 Notice of Benefit and Payment Parameters rule.

AHIP, BCBSA, Association for Community Affiliated Plans (ACAP) and Alliance of Community Health Plans (ACHP) responded to the proposals in comments due July 28.

Monthly SEP

CMS proposed a new, monthly special enrollment period (SEP) that would be limited to people earning up to 150% of poverty who generally have access to no or low-cost ACA coverage due to the increased tax credits in the American Rescue Plan. CMS says the SEP will help make sure that individuals able to stay on Medicaid due to a ban on redeterminations can easily transition into an exchange plan once the public health emergency ends.

In their comments on the rule, AHIP warns the policy could destabilize the market and urges HHS to reconsider the proposal. “Despite guardrails, like metal level restrictions, we have significant concerns this would create a revolving door of enrollment, result in adverse selection, and lead to higher premiums and fewer plan options,” AHIP says.

The health insurance industry has already dealt with significant churn as enrollees switch plans to access certain providers and the SEP would exacerbate the problem, AHIP say. The lobby also says the SEP would impact premiums more than the 0.5% to 2% increases that HHS assumes in the draft rule. Allowing consumers to switch plans could also result in their deductibles resetting, and disrupt plan efforts to help patients manage care, AHIP says. The lobby also worries that some providers might try to steer patients to certain plans at the point of service.

AHIP says federal and state officials and other stakeholders should instead increase outreach to ensure people disenrolled from Medicaid know about other coverage and help then sign up through existing SEPs. The loss of minimum essential coverage (MEC) already triggers a 60-day SEP, the lobby points out. Instead of monthly enrollment, HHS could extend that window for 30 days.

The Blue Cross Blue Shield Association (BCBSA) similarly asks HHS not to finalize the proposal, and instead focus on ensuring consumers are aware of existing enrollment opportunities. BCBSA also says CMS potentially could extend the existing MEC enrollment window.

AHIP and BCBSA both say if CMS does choose to finalize the proposal, it should include several additional guardrails to prevent destabilization. BCSA says consumers should not be allowed to switch plans once enrolled, or drop coverage and reenroll, and CMS should limit the SEP to the first few months of the year. AHIP says enrollment should be limited to those who are uninsured, and consumers should be required to enroll in silver-level coverage with the most generous cost-sharing reductions. Both lobbies say the SEP should not be effective prior to Jan. 1, 2023, because that would be too late for the 2022 plan year. BCBSA and AHIP also say that if the increased premium tax credits under the American Rescue Plan are not extended or made permanent, the SEP should also expire.

AHIP-member Centene also raised concerns about the policy during its second quarter earnings call this week, saying a SEP could create adverse selection.

But ACAP and ACHP say the SEP should move forward.

ACAP says the SEP will be useful for the potentially large numbers of Medicaid beneficiaries that will be disenrolled after the public health emergency and might need additional time to sign up. ACAP believes risk of adverse selections is low since most people have $0 premiums and no incentive to drop coverage. However, CMS should closely monitor implementation, ACAP says.

ACHP also backs the SEP but asks that the administration consider potential risk pool implications.

Open enrollment

CMS proposes to keep the Nov. 1 start date for open enrollment but extend the deadline for an additional month — from Dec. 15 to Jan. 15. The extension would bring the enrollment period closer to the Nov. 1– Jan. 31 timeframe in effect during the last three years of the Obama administration. The later deadline was also meant to help people who might have been automatically reenrolled in a plan with higher premiums and currently have no chance to find another option. HHS also asked stakeholders to comment on whether a special SEP should be created for that population as an alternative to the deadline extension.

AHIP and BCBSA both say CMS should maintain the current dates. “A single enrollment deadline creates a consistent message and allows issuers, agents and brokers, and other enrollment assisters to reinforce the deadline through streamlined messaging,” AHIP writes. The lobby also worries that many consumers may wait until after Dec. 15 to enroll, which means their plan would not be effective until February, which could create gaps.

AHIP supports CMS’ alternative proposal of a SEP for people auto reenrolled into a higher cost plan.

BCBSA also says that a broad extension of the open enrollment period is not needed to solve the problem that CMS is attempting to address.

“Instead of lengthening the annual open enrollment period for all enrollees in all exchanges, we recommend, starting in 2023, allowing auto-renewed enrollees who face premium increases to change their coverage up until Jan. 31,” BCBSA writes. The lobby also urges CMS to increase targeted outreach to that population and to ensure that consumers are getting accurate information on subsidy-levels as early as possible.

But ACAP supports the open enrollment extension. In addition to issues CMS discussed in the rule, ACAP says its plan have noticed some consumers are not reenrolled because they have been in a grace period for non-payment, and these enrollees may not realize their coverage been terminated until after Dec. 15. The extra 30-day enrollment period would give these consumers a chance to find a new plan and enroll in coverage for at least 11 months of the year, ACAP says.

ACA also urges CMS to draft rules that require any non-ACA compliant health plans to have a coverage term ending Dec. 31 and to ban sales of such plans during open enrollment.

ACHP supports giving consumers another 30 days to enroll in ACA coverage, but suggests CMS consider moving the start date from Nov. 1 back to Oct. 15, and setting a Dec. 31 deadline for coverage effective Jan. 1.

“The current proposal would push the enrollee coverage start date to Feb. 1, resulting in a consumer having just 11 months of coverage, “ACHP writes.

The Jan. 1 start date would have fewer operational burdens, help with marketplace stability, and ensure Americans are offered a full 12-month coverage period, which is the basis of plan benefit actuarial design and pricing, ACHP says. — Amy Lotven (