The Obama administration on Friday announced changes to ObamaCare sign-up rules that are intended to cut down on people gaming the system and address a complaint from insurance companies that they say is causing them to lose money.
The Centers for Medicare and Medicaid Services announced that it is tightening the rules for enrolling in one of ObamaCare’s extra sign-up periods.
The CMS unveiled an interim final rule late Friday that could help the Affordable Care Act’s struggling co-op plans. The rule also responds to insurers’ complaints that people are abusing special enrollments in the exchanges.
The CMS tightened the use of special enrollments, specifically making the rules around moving to a new home more restrictive to avoid any gaming of the system. Co-ops also can seek outside funding from investors to build up their capital, something that was outlawed previously.
Using a combination of subsidized premiums for Marketplace coverage, an individual mandate, and expanded Medicaid eligibility, ObamaCare has increased insurance coverage rates. The authors of this study assess the relative contributions to insurance changes of these different provisions in the law’s first full year.
Their four key findings include:
- Insurance coverage was only moderately responsive to price subsidies, but the subsidies were still large enough to raise coverage by almost one percent of the population; the coverage gains were larger in states that operated their own health insurance exchanges (as opposed to using the federal exchange).
- The exemptions and tax penalty structure of the individual mandate had little impact on coverage decisions.
- The law increased Medicaid coverage both among newly eligible populations and those who were previously eligible for Medicaid (the “woodwork” effect), with the latter driven predominantly by states that expanded their programs prior to 2014.
- There was no “crowdout” effect of expanded Medicaid on private insurance. Overall, we conclude that exchange premium subsidies produced roughly 40% of the ACA’s 2014 coverage gains, and Medicaid the other 60%, of which 2/3 occurred among previously-eligible individuals.
Insurers — who might not be allowed the huge rate increases they need to stay solvent — are looking to save money by eliminating so-called Bronze-level plans.
One problem, according to the article, is risk adjustment–as CMS data indicate bronze is the only metal level for which insurers of all sizes in the individual and group markets had to pay into the program. Federal officials are considering some changes to the risk adjustment program, which some say unfairly penalizes smaller insurers.Already, filings show a CareFirst BlueCross BlueShield subsidiary in Virginia will transform its bronze plans into silver-level plans for 2017, according to Inside Health Policy, and experts tell the publication this could set a troubling precedent for the industry.