Many health insurance agents are telling the Trump administration that one little well-intended Affordable Care Act procedure change could wreck their lives next fall.
The agents have sent comments to the Centers for Medicare & Medicaid Services to object to a proposal to have the open enrollment period for commercial individual major medical coverage for 2018 start Nov. 1 and end Dec. 15.
The Trump administration and Republicans hope to repeal and replace the ACA. They have not talked in detail about what they want to do with the ACA exchange system or the individual major medical market. Even if they make big changes in the market, they might put off the application date of the changes until after 2018.
Current regulations call for the open enrollment period for 2018 to start Nov. 1, 2017, and end Jan. 31, 2017.
Regulators, insurers and ACA public exchange managers set up the open enrollment period system, or limits on when people have an easy time buying health coverage, to give insurers to protect against claim risk.
Before Jan. 1, 2014, insurers could protect themselves by turning away sick people. If new enrollees had known health problems, insurers could exclude those problems from the coverage for a few months. Insurers could also impose annual and lifetime benefits payment limits.
The ACA eliminated all of those defenses.
In exchange, the ACA provided new premium subsidies, to help healthy people pay for coverage, and an individual coverage ownership mandate, to push healthy people to pay for coverage.
The open enrollment period system is supposed to supplement those ACA provisions, by discouraging healthy people from intentionally waiting until they get sick to pay for coverage. The system is supposed to leave healthy people with the fear that, if they wait to pay for coverage, they may get sick and run up huge bills at a time of the year when they cannot get coverage.
To buy health coverage outside the open enrollment period, consumers must show they have what the government thinks of as a good excuse to apply for coverage through a special enrollment period.
The Medicare Advantage program has a similar annual election period. The Medicare plan annual election period always runs from Oct. 15 through Dec. 7.
Insurers, and regulators, believe that making the ACA individual major medical open enrollment period shorter will make the system a more powerful defense against “free riders.”
A shorter open enrollment period is part of a package of proposals CMS officials developed in an effort to persuade insurers to sell individual major medical coverage in 2018.
Comments on the proposal aren’t due until March 7, but many insurance agents have already sent in letters. CMS officials are supposed to review comments before they complete work on proposed regulations.
In some of the letters, agents acknowledge that a shorter open enrollment period could help insurers reduce free-rider risk.
The agents say the change could also make their lives miserable. Here’s a look at five of the agents’ concerns about the proposed change.
Some agents say the proposed enrollment period change makes compensation cuts more painful. (Image: Thinkstock)
Mark Soderstrom, an agent, pointed out that the agents trying to help consumers sign up for coverage are already facing a terrible drop in compensation, and that the new proposal does nothing to help agents with that problem.
In Oregon, he writes, agents earn about $400 per year for each Medicare supplement or Medicare Advantage policy they write, but only about $144 per year in commissions for selling an individual policy through the ACA public exchange system.
Marcus Campbell, a North Carolina agent, says the low compensation level hurts consumers, by reducing their access to licensed professionals who can help them choose and understand coverage.