CMS Issues ACA Health Insurance Exchange Stabilization Rule

April 18, 2017 - CMS  issued the final version of the 2018 Market Stabilization rule for the Affordable Care Act (ACA) health insurance exchange.   The rule focuses on stabilizing the individual and small group health insurance markets while lowering premiums and increasing choices for the public.

In a statement accompanying the release of the new rule, CMS stated the revisions were necessary due to “double-digit premium increases, fewer plans to choose from, and a market that continues to be threatened by insurance issuer exits.”   

Seema Verma, CMS Administrator, noted that the new rule is intended to increase patient choice and decrease premiums. “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 document requires more stringent requirements for enrollment, including a shorter sign-up period and increased documentation for potential customers.  It also increases flexibility for insurers to create other variations of health plans, which are currently outside of ACA guidelines, as well as allows states to determine “adequate” levels of available health care.

However, consumers may experience negative impacts from the regulation.  Don McCanne, MD, of the Physicians for a National Health Program, said the new rules are “designed to improve the market for the insurers with a detrimental impact on potential enrollees of the insurance plans.”

One change will be to restrict the open enrollment period for individuals seeking to acquire coverage through the Healthcare.gov exchanges. The new rule will shrink that enrollment period from November 1^st to December 15^th of 2017, instead of the current enrollment end date of January 31, 2018.  This is a move that CMS claims will keep the marketplace more in line with Medicare and private carriers.

Another enrollment change will apply to individuals seeking to enroll during special enrollment periods.  These special enrollment periods currently include when an individual changes state of residence, ends a job, gets married or has a child. The new rule would require individuals to submit supporting documents of these events to ensure only eligible individuals are able to take advantage of the special enrollment periods.  

CMS states that this rule change should encourage individuals to reduce gaps in coverage and stay enrolled in plans for the entire year, a move it says would reduce individual mandate penalties and lower premiums.

In 2018, insurers will be able to demand past-due premiums before allowing individuals to enroll in the same plan for the following year.  The goal, according to CMS, is to once again encourage continuous yearlong coverage while also minimizing impact and improving the risk pool.

Also coming in 2018 will be significant leeway that “allows issuers additional actuarial value flexibility to develop more choices with lower premium options for consumers.”  This provision is expected to allow marketplace insurance payers to create reduced-cost plans for low-risk groups, such as millennials.  It would also open the door to allowing insurance companies to skirt minimum coverage requirements that are currently mandated within the ACA. 

The final rule would shift oversight of network adequacy back to the states.  This would allow states to decide how many health care options are deemed “adequate.”  McCanne warned that these “relaxed standards” could “impair” patient access to health care by potentially limiting choices to a smaller range of providers and hospitals.

Earlier this year, AHIP supported the proposal.  AHIP President and CEO Marilyn Tavenner commented “ While we are reviewing the details, we support solutions that address key challenges in the individual market, promote affordability for consumers, and give states and the private sector additional flexibility to meet the needs of consumers.”