Screening for the Affordable Care Act
Scammers would seem to be everywhere these days, and the Affordable Care Act’s special enrollment periods are presenting some new and interesting ways for some of them to game the system. So interesting are these schemes, in fact, that the Centers for Medicare & Medicaid Services have decided the time has come for a crackdown.
The ACA’s special enrollment periods exist for just one reason: to make health care insurance available to those in extenuating circumstances who failed to obtain it during open enrollment. Such life-changing events as the loss of a job, the birth of a child or the dissolution of a marriage should allow them to qualify. Up until recently, these periods also gave this chance to individuals who lacked health insurance and would have otherwise been subject to penalties.
If one thing sets special enrollment apart, it’s the fact that ineligible persons need not apply. The problem is that sometimes, they do.
ACA Open Enrollment
During most years, ACA open enrollment runs from November 1 – January 31. It’s the period during which the majority of Americans are entitled to apply for individual health coverage. ACA regulations prohibit these people from obtaining coverage during the three-month interim hiatus that constitutes special enrollment.
Not everyone plays by the rules. Healthy individuals who see the chance sometimes wait until they find themselves ill and in need of costly medical care. They then sign up during special enrollment, run up sizeable bills and subsequently drop their coverage. Others who have already enrolled may take advantage of grace periods to continue receiving coverage despite having fallen behind in their premium payments.
CMS is on to these practices. In an attempt to stem the tide, it has reinterpreted the ACA’s definition of two key elements: guaranteed availability and automatic renewal of coverage. Under a new pilot program, CMS intends to require anyone attempting to obtain health insurance through HealthCare.gov during special enrollment periods to submit documents that prove their eligibility to do so. The prospective approval of their applications will hinge upon whether they can or cannot provide proof of the life-changing circumstances that allow a person to qualify.
The new regulations only involve the 38 states that currently participate in the federal healthcare marketplace. They will have no impact on those that operate independent exchanges. States that wish to fight this sort of abuse on their own have the option of adopting this approach themselves or investigating other federally permissible mitigation strategies.
In the meantime, the HealthCare.gov website has recently added warnings to discourage any inappropriate use of special enrollment periods. To cut down on this illegal utilization, regulators have tightened eligibility regulations for some and eliminated others entirely.
The Problems Caused by Those Who Game the ACA
People have complained in recent years that despite Obamacare’s supposed affordability, their healthcare premiums are on the rise. They naturally blame the insurance companies for this, but what they fail to realize is that much of this increase is the natural outcome of other peoples’ having bent the rules during special enrollment periods. Ineligible people who do succeed in signing up at these times often run up extensive costs, destabilize ACA marketplaces and force higher premiums on everyone else.
Since Obamacare prohibits insurers from denying coverage to people in need of expensive medical treatment, current scamming trends skew the risk pools in favor of sicker customers with higher medical costs. The verification program should minimize the current impact of these practices.
In contemplating the eventual scope of the screening program, the CMS hopes to obtain input from insurers and other stakeholders. Concerns currently center around the potential inclusion of geographical targeting or the sampling of current customers of HealthCare.gov. In the hopes of minimizing disruptions and lessening consumer burdens, the CMS also hopes to measure the pilot program’s potential impact on:
- Continuity of coverage.
- Compliance.
- Enrollment.
- Risk.
Despite wanting to meet the ACA’s goal of encouraging large numbers of people to sign up for health coverage, the CMS also needs to do what it must to position the exchanges as attractive markets in which insurers will want to compete.
Unfortunately, even the new verification procedures are unlikely to stop everyone who wants to engage in creative manipulation. There will always be those who do what they can to take advantage of insurance companies. In the end, policymakers may find themselves forced to reconsider the ACA’s special enrollment and grace periods. If mitigation measures fail to succeed, they may decide to play it safe and abolish them altogether.