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CMS final rule gives insurers greater options for benefit design on Obamacare exchanges

Shortened open enrollment period in final rule to increase consumer choice and encourage stability in health insurance market for 2018, CMS says.

Susan Morse, Senior Editor

The Centers for Medicare and Medicaid Services has issued the final market stabilization rule for insurers in the Affordable Care Act market that includes a shortening the open enrollment period for 2018.

Also, for the 2018 plan year and beyond, the final rule gives issuers greater benefit design in allowing additional actuarial value flexibility to develop more choices with lower premium options for consumers, CMS said. Currently under the ACA, insurers must offer the same coverage of essential benefits to all beneficiaries.

America's Health insurance Plans was quick to respond Thursday. President and CEO Marilyn Tavenner said the final rule adopts important changes to improve the individual market that have been needed for some time.

This includes tightening up rules for special enrollment periods, greater flexibility in product and benefit design, and simplified administrative processes.

"However, there is still too much instability and uncertainty in this market," Tavenner said. "Most urgently, health plans and the consumers they serve need to know that funding for cost-sharing reduction subsidies will continue uninterrupted. Without funding, millions of Americans who buy their own plan will be harmed. Many plans will likely drop out of the market. Premiums will go up sharply – nearly 20 percent –  across the market. Costs will go up for taxpayers. And doctors and hospitals will see even greater strains on their ability to care for people."

Tavenner's message was also given in a letter to President Trump and Congress Wednesday in a request for the administration to guarantee funding for cost-sharing reduction subsidies.

[Also: Insurers, providers decry Trump's threat to stop payment to insurers]

In an effort to get Democrats to the negotiating table for a repeal and replace plan, Trump has threatened to end the cost-sharing reduction payments to insurers. CSRs allow insurers to offer low-income beneficiaries lower deductibles in marketplace plans.

CMS has finalized open enrollment for 2018. It will start on November 1 and run through December 15 rather than through the end of January, as was the case for 2017 enrollment and in previous years.

[Also: Open enrollment 400,000 lower this year than last]

The shortened period is more closely aligned with that of Medicare and the private market and will encourage individuals to enroll in coverage prior to the beginning of the year, CMS said.

June 21 is the deadline for all insurers to submit rates for single risk pool coverage that includes a qualified health plan.

Other federal efforts to stabilize the individual and small group market include a requirement that individuals submit supporting documentation for special enrollment periods to ensure that only those who are eligible are able to enroll.

[Also: House Speaker Ryan pledges continuation of cost-sharing reduction payments while ACA is in limbo]

This encourages individuals to stay enrolled in coverage all year.

The final rule also allows issuers to require individuals to pay back past due premiums before enrolling into a plan with the same issuer the following year.

"This is intended to address gaming and encourage individuals to maintain continuous coverage throughout the year, which will have a positive impact on the risk pool," CMS said.

The rule is intended to keep insurers in the marketplace so that consumers have greater choice leading to lower premiums.

Numerous insurers have left the ACA market citing losses and now face market instability due to a change in the administration and the promise to repeal and replace President Obama's healthcare law.

Individuals obtaining coverage in the marketplaces have faced double-digit premium increases, fewer plans to choose from, and a market that continues to be threatened by insurance issuer exits, CMS said.

The final rule is not intended to answer all problems within the ACA market, CMS Administrator Seema Verma said by statement.

"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," Verma said.  "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 reduces waste of taxpayer dollars by eliminating duplicative review of network adequacy by the federal government.  Instead, the rule returns oversight of network adequacy to states.

Approximately one-third of counties in the country have only one insurer participating in their exchange for 2017, CMS said. Five states have only one insurer participating in their exchange for 2017.

The premium for the silver plan on Healthcare.gov increased by an average of 25 percent from 2016-2017.

Twitter: @SusanJMorse

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