Although much of the discussion regarding the success or failure of the Affordable Care Act has focused on enrollment through the marketplaces (or exchanges), there remains a large individual insurance market outside the marketplaces. Coverage sold off the marketplace is subject to most of the same requirements that apply to marketplace coverage, including requirements regarding:
- actuarial value,
- essential health benefits,
- medical loss ratio,
- guaranteed issue and renewal,
- premium review,
- out-of-pocket limits,
- age and tobacco rating, as well as
- the prohibition against health status underwriting, preexisting condition limitations, and annual or lifetime dollar limits.
Indeed, the entire individual market—on and off marketplace—must be considered as part of the same risk pool, so that off-marketplace premiums must be the same as on-marketplace premiums. Off-exchange coverage, however, does not qualify for premium tax credits or cost-sharing reductions, which are only available through the marketplaces. Off-marketplace coverage may well be much costlier, therefore, than on-marketplace coverage for those eligible for financial assistance.
On October 4, 2016, the HHS Assistant Secretary for Planning and Evaluation (ASPE) released an issue brief analyzing the potential number of individuals who are enrolled in and paying the full cost of off-marketplace coverage who would be eligible for financial assistance if they rather enrolled through the marketplaces. ASPE estimates that 6.9 million individuals are currently purchasing coverage in the off-exchange individual market. About 2.5 million of these individuals have incomes that would make them eligible for premium tax credits. About 1.1 million have incomes that would qualify them for cost-sharing reductions to help with their deductibles, coinsurance, copayments, and out-of-pocket costs.
An additional 1.9 million of the 6.9 million have incomes that would make them eligible for Medicaid in states that have expanded Medicaid or that would put them in the Medicaid gap in states that have not. Nearly half of the 5.1 million off-marketplace consumers with incomes above the Medicaid eligibility level are eligible to enroll in marketplace coverage with tax credits.
Counting both individuals enrolled through the marketplaces and eligible qualified health plan (QHP) off-marketplace consumers, about 70 percent of QHP-eligible individuals (that is individuals who are lawfully present in the United States and not eligible for Medicaid, CHIP, or a basic health plan, or in the Medicaid gap in non-expansion states) are eligible for tax credits that would reduce their premiums. An additional 10.7 million Americans are uninsured but eligible for QHP coverage. Of these, 9 million are potentially tax credit eligible. Therefore, 20.9 million of the 26.9 potentially QHP eligible Americans, 78 percent, are eligible for tax credits.
Why would people who are eligible for financial assistance not seek it? One answer is simple lack of knowledge. A recent Commonwealth Fund study found that almost half of the remaining uninsured were unaware of financial assistance through the marketplace. Others who were not eligible for premium tax credits may have become eligible because their premiums have gone up and tax credits cover the difference between a percentage of income and the cost of the second-lowest cost silver plan available.
It is also likely that some are not enrolled through the marketplace because they object to the ACA ideologically and others because they are enrolled through an agent or broker who has not helped them with marketplace enrollment. In any event, many potential enrollees should consider the marketplace before they take on the full cost of off-marketplace premiums.
A 2017 Open Enrollment Calendar
On September 30, 2016, CMS posted at its REGTAP.info website (registration required) a set of slides describing enrollment transactions during the 2017 open enrollment period in the federally facilitated marketplace. This information is not new; in fact, the September 30 slides are an update of slides released on July 18. The slides contain technical detail as to how the reenrollment process will be handled, including maintenance and function codes, which will not be described here.
But the slides also set out the calendar through which open enrollment 2017 will be handled, which is of more general interest. Between October 15 and November 4, 2017, CMS will send to insurers, in BAR (batch auto-enrollment) Wave 1, an enrollment transaction for every current enrollment with the particular insurers. This will include enrollments with open data matching issues but not special enrollments with plan selections after October 15 or active reenrollees who have started an application but not yet completed it. Beginning around November 21, 2016, CMS or a state Department of Insurance will start matching enrollees in discontinued plans to alternate plans. These enrollees can either accept the alternate plan by submitting a binder payment, choose a different plan, or drop coverage.
Finally, CMS will send a second BAR wave to insurers in December, including new special enrollments after October 15, applications that were earlier submitted but had not yet resulted in an enrollment, and alternate enrollments. The second wave will also include some enrollments sent out in the first batch that have been updated for changes in circumstances or tax reconciliation status.
In addition to the BAR waves, CMS will send insurers:
- Outreach files on October 15 covering individuals who will lose financial assistance for 2017 unless they actively reestablish eligibility; insurers are encouraged to reach out to this group, which includes individuals who:
- did not authorize CMS to access their tax data to determine eligibility for 2017,
- have incomes above 500 percent of the federal poverty level, failed to reconcile their taxes for earlier years, or
- enrolled in 2014 and were passively renewed for 2015 and 2016 but have no current tax data;
- Switch files daily from November 3 to December 22 for enrollees who have not yet been auto-reenrolled but have actively switched to a different insurer;
- Weekly cancellations for passive enrollments that duplicate active enrollments, and
- 834 cancel transactions for individuals who are terminated from 2016 coverage and do not actively reenroll.
Insurers are responsible for sending enrollees:
- Renewal notices prior to November 1;
- A bill for January coverage in December containing the updated premium tax credits applicable to the premium (but no summary of benefits and coverage until the insurer receives notice as to the appropriate cost-sharing reduction level for the enrollee);
- Communications encouraging enrollees to update their income information at the marketplace; and,
- Appropriate communications to new enrollees who have been directed to the insurer from a plan with a discontinued insurer.
from Health Affairs BlogHealth Affairs Blog http://ift.tt/2dsnVcn
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