Officials at the Centers for Medicare & Medicaid Services (CMS) have helped health insurance agent and broker groups understand how much they appreciate state insurance regulatory oversight.
CMS, an arm of the U.S. Department of Health and Human Services (HHS), brought about a wave of producer group reflections on the importance of state insurance regulators in November, when it released “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017.”
In the document, CMS officials proposed a variety of rules and programs related to how the Patient Protection and Affordable Care Act (PPACA) might apply to the commercial health insurance market, and the PPACA health insurance exchange system, in 2017.
The packet includes proposals for a new family of easy-to-compare standardized option (SO) plans; having the fourth annual PPACA open enrollment period run from Nov. 1, 2016, through Jan. 31, 2017; setting the 2017 out-of-pocket maximum at $7,150 for an individual and $14,300 for a family; requiring navigators to tell consumers about PPACA tax provisions without providing “actual tax assistance or advice”; and creating a new disciplinary process that HealthCare.gov would use to handle allegations of wrongdoing by HealthCare.gov producers.
CMS received more than 500 comments on the packet.
Some of the comments came from producers and producer groups. The list of commenters from the producer community includes Charles Symington Jr., a senior vice president at the Independent Insurance Agents & Brokers of America Inc. (IIABA), which has about 250,000 members; B. Ronnell Nolan, president of Health Agents for America Inc. (HAFA), a new agent group with members in 39 states; and Janet Stokes Trautwein, chief executive officer of the National Association of Health Underwriters (NAHU).
NAHU has about 100,000 members, has advised the managers of some of the state-based exchange programs, and runs a training program for would-be HealthCare.gov producers.
For a look at some of what Symington, Nolan and Trautwein said about the proposed 2017 rules, read on.
Symington focused mainly on the navigator and HealthCare.gov producer discipline provisions in his letter.
He said the idea that exchange navigators, who are supposed to be independent, non-commissioned ombudsmen, could tell consumers much about PPACA tax implications without “providing actual tax assistance or advice” is “confusing and poorly defined.”
Symington blasted a proposal that would let HealthCare.gov shut a producer out of the market for 90 days without also creating a fast, well-defined appeals system, or requiring HealthCare.gov managers to immediately notify the state insurance regulators in charge of overseeing the producer.
The proposal “fails to provide the measure of due process required by the U.S. Constitution,” and it ignores the concept that state insurance regulators have been, and continue to be, the primary regulators of the health insurance marketplace, Symington said.
“Insurance regulators have a long and unparalleled record of protecting consumers,” Symington said. “IIABA cannot imagine a scenario in which state insurance officials would fail to swiftly address the type of troubling criminal or fraudulent misconduct that is apparently contemplated.”
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Nolan objected in her letter to the idea that CMS proposed an extensive new section on producer discipline without proposing a comparable section for the exchange program’s own representatives.
“Are you aware that marketplace representatives remove agent information from applications, and it happens across the nation?” Nolan asked. “I don’t remember seeing threat of penalties or loss of income for the marketplace representatives providing wrong information or removing the agent/broker.”
Nolan said producers are working harder these days for less money and are already required by state regulators to meet background checks, fingerprinting, continuing education, and errors and omissions insurance requirements.
“I am asking that you consider allowing the state government to continue to regulate agents and brokers, and I am asking that you stop creating an unfair playing field,” Nolan said. “We are only asking for fairness.”
Trautwein also emphasized the value of state regulation of producers, and of due process, in the NAHU letter.
The proposal “specifies that state regulators will only be notified in the case of an adverse determination against a broker,” Trautwein wrote. “Given that state regulators are the primary regulators of broker conduct across all market spheres, we believe that state officials should be involved and alerted to suspected misconduct immediately, so that they, too, can take appropriation if needed.”
States also have long-established processes for handling potential broker misconduct, Trautwein said.
The existing enforcement framework should be suitable for handling most cases of potential misconduct, Trautwein said.
HHS also needs to clarify how it would handle the proposed 90-day suspension timeframe, Trautwein said.
“Ninety days is almost the length of the entire open enrollment period,” Trautwein said. “If a broker was in fact innocent of wrongdoing, they could be shut out of helping consumers altogether for the season if their case was not resolved quickly.”
Trautwein also commented on proposed provisions designed to reduce the risk that consumers will wait until they are sick to pay for coverage.
Regulators, insurers and exchange managers are trying to use an “open enrollment period” system, or tight limits on when consumers can apply for coverage, to discourage from acting as “free riders” and waiting until they need health care to get insured.
Consumers are supposed to be able to buy coverage outside the open enrollment period by showing they qualify for a special enrollment period (SEP). Consumers can qualify for SEPs if they have moved, gotten married, had babies, or gone through other qualifying life events.
NAHU likes a CMS proposal to let an exchange cancel or retroactively terminate coverage if it finds that an enrollment occurred because of fraudulent activity, Trautwein said.
The provision would also let an exchange cancel a consumer’s coverage if the consumer gained coverage as a result of “error, misconduct or fraud perpetrated by someone else,” Trautwein said.
“However, we caution that this is just a small percentage of special enrollment fraud,” Trautwein said. “In general, based on our members’ experience in directly helping individuals obtain coverage, NAHU members note that people who have a medical condition for which they seek treatment commonly perpetuate simple special enrollment period fraud through baseless applications or applications that contain small falsehoods, since they want medical care and did not obtain coverage during the appropriate open enrollment window. This is the essence of adverse selection and must be stopped.”
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