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February 18, 2015 at 12:23 PM
The federal government is putting off the day when it checks to see which health insurers got too much money, and which got too little money, from the Patient Protection and Affordable Care Act (PPACA) cost-sharing reduction (CSR) program.
The program helps PPACA exchange plan users with incomes under 250 percent of the federal poverty level — the core of the exchange plan market — pay deductibles, co-payments and coinsurance amounts.
The Centers for Medicare & Medicaid Services (CMS), an arm of the U.S. Department of Health and Human Services (HHS), has been paying the insurers cost-sharing reduction money in advance. Eventually, insurers and CMS are supposed to go through a cost-sharing reduction reconciliation process, to correct any payment errors that might have occurred because of inaccuracies in enrollee income information or other information.
CMS created one simplified CSR payment calculation system for big plans, and another simplified CSR calculation system for smaller plans.
The CSR calculation system for the smaller plans is working poorly, and many insurers are having trouble upgrading their systems quickly enough to use the more complicated standard system this year, according to officials at the Center for Consumer Information & Insurance Oversight (CCIIO), the arm of CMS in charge of handling PPACA rules and programs that affect commercial health insurance.
To help plans cope with the calculation programs, CMS is pushing the reconciliation date for the 2014 plan year to April 2016, from this April.
Timothy Jost, a law professor who represents consumer interests in proceedings at the National Association of Insurance Commissioners, wrote about the delay in a blog entry on the website of Health Affairs, a health finance academic journal.
The delay affects subsidy payments for relatively low-income people who may not be big buyers of high-end personal protection insurance, and it involves payments from the government to issuers of PPACA public exchange plans, not insurers’ payments to consumers.
