Special enrollment periods costly and open to abuse, insurers warn

Among the slew of criticisms highlighted in recent comment letters about proposed Affordable Care Act marketplace reforms, one major theme emerges--insurers are very concerned about consumers' use of special enrollment periods (SEPs).

"SEPs are negatively impacting the overall risk pool of exchange enrollees, resulting in higher costs for [health] plans, and ultimately higher costs for all consumers," the Blue Cross Blue Shield Association wrote in its letter commenting on the 2017 Notice of Benefit and Payment Parameters.

In fact, Blues plan users who enroll during SEPs use 55 percent more services than those who sign up during standard open enrollment, the BCBSA says. For Aetna, those who enroll during SEPs remain insured through the plans they purchase about half as long as their open enrollment counterparts, the insurer said in its letter.

In addition, the National Association of Insurance Commissioners pointed out that some consumers abuse the SEPs, which are intended to allow individuals to enroll in ACA plans when they experience "qualifying life events" such as getting married.

Some whose policies were canceled because they didn't pay their premiums were allowed to choose a new plan during SEPs; others with severe medical conditions were allowed to purchase coverage mid-year "simply by checking the right box or using the right language;" and some gamed the system by applying for Medicaid knowing they would be rejected so they can they could then apply for private coverage under the SEP, the group says.

Some consumer advocates doubt that many individuals are trying to break the enrollment rules. "Most consumers are confused by the rules on special enrollment periods and do not understand the system well enough to try to game it," a lawyer at Vermont Legal Aid argues, according to the New York Times.

Yet for its part, the BCBSA recommends that "CMS require exchanges to verify that applicants actually qualify for their attested SEPs, define SEPs more clearly, and minimize the number of SEPs to align more closely with Medicare and HIPAA."

UnitedHealth, which recently cited the high cost of SEP enrollees in its revised earnings outlook due to losses on the ACA exchanges, also has suggested that the Centers for Medicare & Medicaid Services be stricter about who is allowed to enroll outside of the standard open enrollment periods, FierceHealthPayer reported.

To learn more:
- access the BCBSA letter
- here's the NAIC letter
- download the Aetna letter
-  read the New York Times article

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