Federal DHHS Issues ACA Market Stabilization Rules, Consumer Subsidy Concerns Unresolved
April 14, 2017
The Department of Health and Human Services (DHHS) issued a rule finalizing changes to help stabilize the Affordable Care Act (ACA) individual and small group marketplaces.
This final rule tightens enrollment periods and addresses actuarial requirements and network adequacy standards, all concerns raised by the insurance industry. However, it does not address a major issue impacting the ongoing viability of the marketplaces, whether the Administration will continue to provide subsidies intended to reduce out-of-pocket costs for individuals with incomes below 250 percent of the poverty line.
While the intent of the rule is to stabilize the ACA marketplaces, failure to fund cost-sharing subsidies could threaten the viability of the ACA individual and small group markets. These issues were addressed in a communication to HAP members earlier this week.
In summary, the new rule:
- Requires individuals signing up for insurance outside of the standard enrollment window to prove eligibility before getting coverage. Insurers have complained that previous rules relating to special-enrollment periods were too liberal, allowing individuals to wait until they became sick before enrolling.
- Shortens the open enrollment period from three months to six weeks. The opening day, November 1, would remain the same, but the enrollment window would close December 15, instead of the end of January. This rule may reduce Marketplace enrollment.
- Requires Marketplace consumers to repay past-due premiums from the previous 12 months before being granted new coverage if they sign up with the same insurer.
- Provides more actuarial value flexibility for insurers to create “metal tier” plans (gold, silver, bronze). A new formula permits larger variations around the average actuarial value requirements for the various tiers, providing greater flexibility to insurers to create plan options.
- Permits insurers to include fewer essential community providers in their networks. Previous rules required insurers to include at least 30 percent of area health care providers that care for “medically underserved” patients in their network. The new rule reduces that threshold to 20 percent.
The final rule acknowledged that some of the comments that DHHS received were critical of the proposed regulation changes. Concerns focused on the benefits to insurance companies that could weaken consumers’ access to affordable health coverage and weaken their protections under the ACA.
HAP continues to advocate for the continued funding of cost-sharing reduction subsidies. If you questions relating to this new rule, please contact Jeff Bechtel, senior vice president, health economics and policy.