The Centers for Medicare and Medicaid Services announced today a policy that allows issuers to temporarily offer premium reductions for 2020 for all individuals covered in the individual and small group markets.
This new policy will be in effect through the rest of the year, according to CMS.
Before this policy, issuers were prohibited from changing premiums for health insurance coverage in these markets after the start of the benefit year. Now, premium reductions may be offered for one or more months in 2020, as long as it is consistent with state law.
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WHY THIS MATTERS
CMS created this policy in response to the COVID-19 public health emergency as a way to ensure that consumers can continue to be covered and receive care.
The COVID-19 pandemic has spread across the globe and caused major health implications. It has also had a massive impact on individuals' finances.
A study from the Commonwealth Fund found that one in five adults reported they and/or their spouse or partner were laid off or furloughed from their job because of COVID-19. Because of those job losses, about 40% of people who had been covered under their employer's plan no longer had insurance, according to the survey.
As a result, about 36% of people who lost their job as a result of the pandemic signed up for coverage with Medicare or Medicaid, or through a plan purchased via the individual market.
Still, many people struggle to pay for the cost of health insurance. One report found that 64% say they could not afford to pay out their full annual deductible if hospitalized for the treatment of coronavirus.
THE LARGER TREND
CMS has adopted several other policies intended to ease some of the financial burdens that COVID-19 has put on consumers.
One of these allows for issuers that use Healthcare.gov to offer coverage to extend premium-payment deadlines and delay cancellation for nonpayment premiums. Another permits insurers to prepay enrollees a portion or all of the estimated medical loss ratio rebate for the 2019 MLR reporting year.
ON THE RECORD
"Throughout the COVID-19 pandemic, the Trump Administration has taken a whole-of-America approach, including working with our private partners, to ensure that the entire healthcare system is activated in our efforts to protect the American people," said CMS Administrator Seema Verma. "Today's action is just the latest in a series of flexibilities CMS has extended to health insurers to help them support their enrollees during this unprecedented time."
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