The Blue Cross and Blue Shield Association says the government could help make the public health insurance exchange application process more honest by developing, and using, special enrollment period (SEP) reason codes.
Justine Handelman, a vice president at the association, gave that recommendation in a comment letter sent to the Centers for Medicare & Medicaid Services (CMS).
CMS is putting the exchange application process through a federal Paperwork Reduction Act (PRA) review. The review process includes a public comment period.
In the Blues’ comment on the exchange application process, Handelman says CMS should:
- Reduce the number of SEPs available to public exchange users.
- Make the types of SEPs available to exchange users more like the types of SEPs available to Medicare Advantage users and commercial health coverage users.
- Have the public exchange system tell consumers more about SEP requirements.
- Let insurers use the kinds of validation processes they commonly use in other markets.
Handelman also talks about ways CMS could improve SEP integrity by setting up a better process for sharing SEP information.
CMS sets guidelines for SEP rules at all PPACA public exchanges. The agency actually runs the SEP program at HealthCare.gov, the public exchange enrollment and administration system that the U.S. Department of Health and Human Services (HHS) set up for states that are unwilling or unable to provide state-based public exchange services.
For the HealthCare.gov states, CMS should develop a separate code for each reason that a consumer could use to qualify for a SEP, Handelman writes.
CMS should then use the SEP reason code when it communicates with insurers about SEPs, Handelman says.
“This will allow issuers to better track and verify SEPs, and more effectively aid in CMS’ program integrity efforts,” she says.
Insurance regulators developed the SEP system in an effort to keep young, healthy people from using PPACA underwriting restrictions as an invitation to wait until they get sick to pay for coverage.
Consumers who want to buy individual commercial major medical coverage outside of the open enrollment period, which now runs from Nov. 1 through Jan. 31, are supposed to show that they qualify for SEPs. Common SEP triggers include loss of employer-sponsored coverage, a permanent household move, and the birth or adoption of a child.
Consumer groups say the exchange application process is already too complicated, and that low-income people who qualify for SEPs may have a hard time coming up with formal eligibility documentation.
Some insurers have reported that SEP abuse appears to be common enough to have a big effect on 2017 rates. Jeff Smith of Blue Shield of California said at a Covered California exchange meeting in April that SEP abuse could increase his company’s 2017 premiums by about 3 percent to 5 percent.
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