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Life Health > Health Insurance

What if your health client is new in town?

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New public exchange program enrollment rules could give sick people an extra incentive to move to states that expanded Medicaid.

Beth Deines, a legal analyst at Connect for Health Colorado, has shown why that might be the case in a summary of the new special enrollment period (SEP) guidance from the Centers for Medicare & Medicaid Services (CMS).

CMS has tried to fight SEP abuse by imposing new restrictions on consumers who move from one exchange market to another exchange market.

Under the old rules, which are still in effect today, any consumers who move from one exchange market area to another can sign up for exchange plan coverage at their new address, whether or not they have ever had any health coverage before.

Starting July 11, new rules will apply to most people who move during the exchange nap period and want to buy exchange plan coverage at the new address using a SEP. To qualify for a SEP, those people will have to show that they had “minimum essential coverage” (MEC) — major medical coverage — for at least one day in the 60-day period before they moved.

Deines told the board of Connect for Health Colorado, a state-based PPACA exchange, that there are three exceptions to the prior-coverage requirement.

One is for people who were incarcerated before they moved, and another is for people who moved to the United States from another country.

The third is for the low-income and moderate-income people who are moving from a non-Medicaid expansion state to a Medicaid expansion state and are newly eligible for the PPACA advance premium tax credit (APTC) subsidy program.

Those people “will still have the ability to access an SEP even if they were not previously enrolled in MEC,” Deines writes.

The exception could be helpful to uninsured people who live in a non-Medicaid-expansion state and fail to qualify for APTC help. If those people fall ill outside of the open enrollment period, they may still be able to get exchange plan coverage quickly, by moving to a state that has expanded Medicaid.

Regulators set up the open enrollment period system to protect insurers against the effects of the PPACA underwriting rules, and benefits mandates took effect in January 2014.

To give healthy consumers some incentive to pay for coverage when they are feeling good, insurers let consumers sign up for individual commercial coverage on a true guaranteed-issue basis only from Nov. 1 through Jan. 31.

Consumers who buy coverage the rest of the year are supposed to show they qualify for a SEP, because they have gone through a major life change or face a serious, unusual problem. Consumers who are uninsured outside of the open enrollment period and fail to qualify for a SEP could get stuck with having to pay big medical bills out of their own pockets.

Insurers have complained that some consumers have been abusing the SEP system, by buying coverage outside the open enrollment period without showing that they really qualify for SEPs.

CMS updated the SEP rules in an effort to tighten the rules for some types of SEPs and to beef up documentation requirements.

See also: How the ‘liar plan’ hot potato could knock you out


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