HealthPocket asks CMS for short-term health help

Excepted benefits regulation

The short-term health battle could show how Seema Verma, shown above at a hearing, handles market stability concerns. (Photo: Allison Bell/LHP) The short-term health battle could show how Seema Verma, shown above at a hearing, handles market stability concerns. (Photo: Allison Bell/LHP)

Bruce Telkamp and Kev Coleman are hoping Centers for Medicare & Medicaid Services officials will find a way to ease a duration limit on short-term medical insurance policies imposed by the Obama administration's CMS.

Telkamp, chief executive officer of HealthPocket Inc., and Kev Coleman, head of research at the firm, ask for relief in a comment on new draft individual market stabilization regulations.

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President Donald Trump took the oath of office Jan. 20. He has said that he wants to repeal and replace the Affordable Care Act, but he has been open to the idea of keeping the existing system in place during a transition period. Trump's CMS published a draft of individual major medical market regulations last month.

CMS officials developed the regulations, which would affect the individual market this year and in 2018, in an effort to respond to health insurers' concerns about the stability of the market, and to keep insurers in the individual market this year and next.

Earlier, in October, Obama's CMS posted final regulations imposing a three-month limit on the duration of short-term health coverage.

Under the new regulations, which are set to take effect April 1, a consumer can use four or more short-term health policies to stay covered throughout the year, but an insurer cannot cover an individual for more than three months in a row.

Unlike issuers of individual major medical coverage, issuers of short-term health insurance can use medical underwriting to hold down costs. They can also impose annual and lifetime benefits limits, design benefits without complying with the Affordable Care Act major medical benefits mandates, and sell coverage outside the ACA open enrollment period.

CMS officials argued that the regulation would help stabilize the individual major medical market, by reducing the pressure for younger, healthier people to buy skimpier, but cheaper, short-term health insurance policies, rather than individual major medical coverage.

Telkamp and Coleman, who work for a company that's owned by Health Insurance Innovations Inc., a Tampla, Florida-based short-term health insurance distributor, write in their letter that insurance regulators have stated that shortening the maximum duration of short-term health insurance policies will have no effect on individual major medical market risk pools.

The new three-month duration limit conflicts with existing state laws, and it wil hurt consumers who miss the ACA open enrollment period, Telkamp and Coleman write.

Consumers who do buy short-term health insurance four times per year will face new deductibles each time they replace their coverage, and they will face new pre-existing condition exclusions for any conditions they developed during the previous three months, Telkamp and Coleman write.

CMS does not talk about short-term health insurance in the new draft regulations, but the agency does talk about the possibility of changing the end date for the open enrollment period for 2018 coverage, and a shorter open enrollment period could force more consumers locked out of the individual major medical market to buy short-term health insurance, Telkamp and Coleman write.

The Senate is preparing to vote Wednesday on Trump's nomination of Seema Verma to be the next CMS administrator.

If Verma is confirmed, what she decides to do, or not do, about the short-term health duration limit issue could be an early example of how she will handle conflicts between insurers' pleas for help with stabilizing the major medical market and other groups' interests.

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