Some analysts are wondering whether any health insurers made money on the public exchange system in 2014, but the U.S. Department of Health and Human Services (HHS) is already setting the parameters for the exchange system and other Patient Protection and Affordable Care Act (PPACA) programs for 2016.
The Centers for Medicare & Medicaid Services (CMS), the HHS division in charge of the exchange program and other PPACA programs, is preparing to publish the 476-packet of regulations in the Federal Register Friday.
The new packet is a final version of a draft packet posted in November.
A preliminary version of the packet includes regulations affecting:
The 2016 major medical open enrollment period calendar.
The PPACA “three R’s” risk-management program, including the reinsurance, risk-adjustment and risk corridors programs.
Requirements for major medical plan benefits and provider networks.
The PPACA major medical minimum medical loss ratio (MLR) and rate review systems.
What exactly counts as minimum essential coverage (MEC), or coverage that can get consumers out of the penalties PPACA calls for the Internal Revenue Service (IRS) to impose on many consumers who fail to have MEC for the right amount of time. In one brief section, for example, CMS classifies coverage from any state high-risk health insurance pool in existence as of Nov. 26, 2014, as MEC.
For a look at some of the provisions of interest to health insurance agents and brokers, read on.
1. CMS has no intention of aligning the PPACA open enrollment period with the personal income tax filing deadline.
Regulators and insurers created the major medical open enrollment period system to keep consumers from using the PPACA ban on use of personal health information on decisions to issue coverage to let consumers wait until they get sick to pay for coverage.
For 2015, CMS was going to have the open enrollment period last from Nov. 15 through Feb. 15. Officials ended up creating a new special enrollment period (SEP) for consumers who pay the no-MEC tax penalty for 2014 and say they learned about the no-MEC penalty only when they filed their 2014 taxes. The tax season SEP is supposed to last from March 15 through April 30.
Originally, CMS proposed that the 2016 open enrollment period would last from Oct. 1 through Dec. 15.
CMS have declined to align the 2016 enrollment period with the calendar year or the traditional April 15 income tax filing deadline, but they said they heard from many commenters that starting the enrollment period Oct. 1 would create problems. They ended up deciding that the enrollment period should run from Nov. 1, 2015, through Jan. 31, 2016.
That will help ease coverage transitions by offering some overlap between the Medicare and major medical open enrollment periods, while relieving insurers from the burden of having the enrollment periods overlap more, officials say.
Having the enrollment period extend past December should help consumers focus better on enrollment and overcome holiday-related lack of cash, officials say.
CMS says letting state-based exchanges set their own open enrollment periods would be confusing and is not letting state-based exchanges do that.
2. CMS is proceeding on the assumption that insurers will pay enough cash into the risk corridors risk-management program to make the numbers work.
The risk corridors program is supposed to last for three years.
PPACA calls for HHS to use risk corridors payments from insurers that earn solid profits from selling PPACA-compliant individual major medical coverage in 2014 to help insurers that report weak 2014 individual major medical results.
Republican in Congress have forbidden HHS from using taxpayer money to help the individual coverage issuers with weak results, and some analysts are questioning whether many insurers did well enough to pay money into the risk corridors program.
In the preamble to the new regulations, CMS officials say of the program, “We anticipate that collections will fully offset payments over the three-year duration of the program.”
If insurer payments fall short, “HHS will use other sources of funding for the risk corridors payments, subject to the availability of appropriations,” officials say.
3. CMS has a Web-based strategy for handling exchange plan issuers.
If an insurer lacks the financial capacity to continue to sell exchange coverage, HHS will “suppress” it from the HealthCare.gov database, officials say in a section on exchange plan entry suppression.