CMS Issues New Rules to Ensure Market Stability

CMS issued final rule to increase choices and encourage stability in health insurance markets for 2018

The Centers for Medicare & Medicaid Services (CMS)recently released a new final Market Stabilization rule. With these new rules, CMS intends to help lower premiums and stabilize individual and small group markets. In doing so, they’ll increase healthcare choices for Americans. As it stands now with the Affordable Care Act, Americans have been facing double-digit premium increases and fewer options because insurance issuers have been consistently exiting the market. To combat this growing issue, CMS has announced a five-part plan that will provide relief to both issuers and consumers.

“CMS is committed to ensuring access to high quality affordable healthcare for all Americans and these actions are necessary to increase patient choices and to lower premiums,” said CMS Administrator Seema Verma. “While these steps will help stabilize the individual and small group markets, they are not a long-term cure for the problems that the Affordable Care Act has created in our healthcare system.”

The final rule makes several policy changes, which are listed below:

2018 Annual Open Enrollment Period

For 2018, the Open Enrollment period (OEP) will align with the Medicare enrollment period and the private market. As a result, consumers only have six weeks to enroll instead of a three-month enrollment period. Starting November 1, 2017, the next Open Enrollment will run through December 15, 2017, encouraging individuals to enroll in coverage prior to the beginning of the year.

Reduce Fraud, Waste, and Abuse

To qualify for a special enrollment period (SEP), individuals must now submit supporting documentation. By upholding integrity, this rule will ensure that those who are eligible will be able to enroll. Moreover, it encourages people to maintain coverage all year. If it’s more difficult to get an SEP, then people will be less likely to drop coverage, which will result in fewer penalties and lower premiums.

Promote Continuous Coverage

While SEP documentation encourages continuous coverage, back payments will also incentivize individuals to maintain coverage. The new rule allows issuers to require policyholders to pay back premiums that are past due before letting them enroll in another plan the following year. This will hinder people from gaming the healthcare system, and continuous coverage will have a positive impact on the risk pool.

Ensure More Choices for Consumers

For the 2018 plan year and beyond, issuers have additional actuarial value flexibility. With this flexibility, insurance companies can develop more choices with lower premiums for consumers in addition to offering existing plans.

Empower States & Reduce Duplication

To reduce the waste of taxpayer money, the final rule plans to eliminate duplicative reviews of network adequacy. Rather than the Federal Government, states now determine network adequacy. The rule deems the states more equipped to handle the reviews.

Recent Statistics Related to the Affordable Care Act:

  • Approximately one-third of counties in the U.S. have only one insurer participating in their exchange for 2017.
  • Five states have only one insurer participating in their exchange for 2017.
  • The premium for the benchmark second-lowest cost “silver plan” on increased by an average of 25 percent from 2016-2017.
  • In 2017, 500,000 fewer Americans selected a plan in the exchange open enrollment compared to 2016.
  • Many states saw double digit increases in their insurance premiums including:
    – AZ: 116%
    – OK: 69%
    – TN: 63%
    – AL: 58%
    – PA: 53%

Since insurance is oftentimes overwhelmingly confusing, we want to shed light on this industry by answering YOUR questions.  So if you have any questions or concerns, comment below and your question may be the topic of our next video!

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