CMS final rule benefits insurers, not patients

CMS issues final rule to increase choices and encourage stability in health insurance market for 2018

Centers for Medicare &  Medicaid Services, April 13, 2017

The Centers for Medicare & Medicaid Services (CMS) today issued the final Market Stabilization rule, to help lower premiums and stabilize individual and small group markets and increase choices for Americans.

The final rule makes several policy changes to improve the market and promote stability, including:

* 2018 Annual Open Enrollment Period: The final rule adjusts the annual open enrollment period for 2018 to more closely align with Medicare and the private market. The next open enrollment period will start on November 1, 2017, and run through December 15, 2017, encouraging individuals to enroll in coverage prior to the beginning of the year.

* Reduce Fraud, Waste, and Abuse:  The final rule promotes program integrity by requiring individuals to submit supporting documentation for special enrollment periods and ensures that only those who are eligible are able to enroll. It will encourage individuals to stay enrolled in coverage all year, reducing gaps in coverage and resulting in fewer individual mandate penalties and help to lower premiums.

* Promote Continuous Coverage: The final rule promotes personal responsibility by allowing 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.

* Ensure More Choices for Consumers:  For the 2018 plan year and beyond, the final rule allows issuers additional actuarial value flexibility to develop more choices with lower premium options for consumers, and to continue offering existing plans.

* Empower States & Reduce Duplication:  The final rule reduces waste of taxpayer dollars by eliminating duplicative review of network adequacy by the federal government. The rule returns oversight of network adequacy to states that are best positioned to evaluate network adequacy.

“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,” said CMS Administrator Seema Verma. “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 (139 pages):



By Don McCanne, M.D.

Would people prefer that their health care coverage be adequate and affordable or would they prefer that their insurers thrive in the market even if to the detriment of the beneficiaries? That’s a ridiculous question though the Trump administration has given a ridiculous answer: cater to the private insurers and forget the patients.

The open enrollment period is essentially the only time individuals can enroll in the plans, and they are cutting the eligibility time in half. Further, they are closing the enrollment period two weeks before the end of the year which ensures that procrastinators who wait until the last two weeks before coverage begins are out of luck since they are prohibited from enrolling at all. This will have an obvious detrimental impact to those who tend to put things off or are simply unaware of the early cutoff date. The insurers can target their marketing to healthy populations and get them in quickly and then close the door before the sick people get wind of the short open enrollment period.

Documentation requirements are being increased for special enrollment periods. Since many of those seeking to enroll outside of the open enrollment period do have medical problems that they need to have covered by insurance, the more stringent requirements will allow insurers to refuse coverage for this more expensive population simply because of inevitable difficulties that patients would have in complying with these requirements. Insurers benefit, and people who need care will go without.

People who are unable to pay their premiums because of often unavoidable circumstances, such as loss of employment, will be denied coverage until the delinquent premiums are paid. The insurers get to clear their rolls of poor credit risks while those who do have such problems may have them compounded by being denied insurance coverage.

The rule allows insurers to tinker with the actuarial values of the plans to allow “more choices” (of stripped down plans that offer less protection) and “lower premium options” (for those deficient plans). The insurers get more sales of plans that pay fewer benefits whereas the patients face greater financial hardship should they need health care.

The adequacy of provider networks is a serious problem now, and yet the new rule abandons the federal role in providing oversight of the adequacy off these networks, leaving it to the states, many of which show little regard for such oversight. The insurers profit by ratcheting down the numbers and fees of providers while the patients are left with less certainty that they can access the care they need.

Though we know what increasing choices and lowering premiums really means, our new CMS Administrator, Seema Verma, describes this as “ensuring access to high quality affordable healthcare for all Americans.” It is insurance, not health care, that they are trying to make more affordable, and they certainly are not making actual access to care affordable with the increases in out-of-pocket cost sharing.

We should be particularly concerned with Verma’s statement that these steps “are not a long-term cure for the problems that the Affordable Care Act has created in our healthcare system.” Listening to her answers to questions at her confirmation hearing, she was heavy on the “choice,” “higher quality at lower cost,” and “access” rhetoric while refusing to reveal any real policies that she had in mind. We only know that she, in her own words previously, wants patients to “have more skin in the game.” How can they when so many of them already have been skinned alive?