GAO tests ACA exchange special enrollment defenses

Federal investigators found that, earlier this year, nine of 12 fake people it created were able to get Affordable Care Act public exchange plan coverage through special enrollment period applications.

The investigators, at the Government Accountability Office, conducted the test to see how well HealthCare.gov and state-based ACA exchange programs are screening people who apply for coverage outside the usual open enrollment period.

Mila Kofman, the executive director of one of the programs tested, the District of Columbia Health Benefit Exchange Authority, fired back in a response.

She argued in comments on the GAO findings that special enrollment period enrollees in the district are younger than other enrollees, and probably healthier.

What’s a special enrollment period?

The ACA now bans almost use of personal health information when health insurers are selling and pricing individual major medical coverage. People with cancer pay the same premiums as healthy people.

Insurance regulators, ACA exchange managers and insurers developed an open enrollment period system to keep people from treating the ACA limits on medical underwriting as an invitation to pay for coverage only when they feel sick.

Under that system, anyone can buy health coverage from Nov. 1 through Jan. 31.

People who try to buy coverage at other times of the year must show that they have what the government classifies as a good excuse, such as marriage or a move to a new town, to get a special enrollment period.

The ACA itself does not require exchanges to verify whether shoppers who say they qualify for special enrollment periods actually do.

Applicants must “attest,” or swear, upon penalty of perjury, that they have done their best to give complete, accurate information when they apply for special enrollment periods.

Insurers have complained that some consumers do seem to be waiting until they get sick to pay for coverage, and that claims for enrollees who have come in through special enrollment periods are higher than for other enrollees.

HealthCare.gov and some state-based exchanges have been beefing up special enrollment period documentation rules in recent months, to address insurers’ concerns that special enrollment fraud is driving up claim costs and throwing off claim projections.

GAO findings

The GAO found that exchange workers asked only six of the 12 fake applicants it created to provide documentation supporting their special enrollment period applications.

HealthCare.gov rejected two fake applicants. The applicants asked for special enrollments because of allegations about problems with applying for coverage during the open enrollment period. HealthCare.gov workers said the fake applicants had filed their requests for special enrollments too late, according to a GAO report about the investigation.

A state-based exchange rejected a fake special enrollment period applicant who complained about getting wrong information from an application counselor.

Mila Kofman responds

The exchange program that serves the District of Columbia was one of the two locally based exchanges included in the investigation.

Mila Kofman, the head of that exchange, said that the exchange program has helped to dramatically decrease the uninsured rate in the district, and that the GAO’s opposition to applicant self-attestation is unfounded.

Self-attestation is accepted in many other federal programs, such as the federal college student aid program, Kofman says.

Moreover, in the District of Columbia, “customers who enrolled through a SEP are younger than those who enrolled during the last open enrollment,” Kofman says.

That suggests that the district’s special enrollment period enrollees is healthier than its regular enrollees, she says.

“This means that there is no evidence of systemic abuse of SEPs,” Kofman says. “In other words, there is no evidence that people are waiting to get sick to enroll in coverage.”