Insurers, state exchanges demand CMS halt any changes to automatic re-enrollment

A signpost with the words Affordable Care Act
Insurers are pressing the Centers for Medicare & Medicaid Services to not make any changes to automatic re-enrollment for customers with advanced tax credits that pay zero dollars in premiums. (Getty/kroach)

Insurers, state regulators and providers are demanding the Trump administration not change the automatic re-enrollment process for the Affordable Care Act’s (ACA's) exchanges.

Several groups said in comments to the Centers for Medicare & Medicaid Services' (CMS') proposed Notice of Benefit Payment Parameters, which sets regulations for ACA plans for 2021, that any changes to automatic re-enrollment will cause consumer confusion and possible disruption in coverage. Stakeholders were also upset at the late filing of the critical regulation they use to craft qualified health plans.

The biggest concern among insurers was CMS’ flirtation with changing automatic re-enrollment for ACA customers that pay no premium after taking into account tax credits. The agency was concerned that automatic re-enrollment for such customers could be leading to inaccurate spending on advanced premium tax credits.

So, CMS said in the notice it wants customers with $0 premiums to return to the exchange and update their application during open enrollment. If the customer doesn’t do this, the tax credits could be canceled or reduced for the coming plan year.

Another option is that a fully subsidized customer would get fewer advanced tax credits, so they would owe a premium greater than zero dollars. Neither option seemed palatable to insurers.

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“Eliminating or reducing advance payments of the premium tax credit for enrollees with $0 premiums would create an arbitrary and discriminatory burden for the lowest income and most vulnerable enrollees,” said America’s Health Insurance Plans, the insurance industry’s leading lobbying group. “Either option would create unnecessary abrasion and lead to fewer people having coverage.”

Insurers also blasted CMS’ estimated scope of customers affected by the change.

“While CMS’ proposed changes are targeted to enrollees with zero-dollar premium plans and the agency projects 270,000 consumers being impacted, we are concerned that the actual number might be higher,” wrote ACA insurer Molina Healthcare in comments. “In 2019, Molina had 69,000 members who had zero-dollar premium plans.”

Molina said zero-dollar premium plans result from the process called "silver loading," a workaround insurers use to recoup the money they allocate for cost-sharing reduction (CSR) payments. A plan will put the cost of a CSR onto the benchmark silver tier plan that determines the amount ACA consumers get for income-based tax credits.

The practice, used since President Donald Trump canceled CSR payments to insurers in 2017, has led to some bronze or gold plans being available at zero dollars for some consumers because consumers would get more tax credits due to the higher-cost benchmark plan.

“The key point here is that zero-dollar premium plans are not the result of low-income members being given incorrect subsides, but rather that they are a perfectly predictable and understandable outcome of the current marketplace subsidy design, and competitive dynamics in some local markets,” Molina said.

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The Blue Cross Blue Shield Association, which represents 36 independent Blue Cross Blue Shield plans, said in comments CMS should instead improve existing communication campaigns and “program integrity measures for all re-enrollees rather than creating new campaigns and additional paperwork burdens specifically for re-enrollees without a premium responsibility.”

Provider groups were also concerned about the changes to automatic re-enrollment.

“Besides destabilizing the market, discontinuing automatic re-enrollment could negatively impact patient care since plan changes disrupt the patient-physician relationship and threaten longitudinal care,” said the American Academy of Family Physicians in comments. “Patients could be enrolled into a new plan which could lead to new prior authorization or step therapy hurdles that threaten an otherwise stable medication treatment plan.”

State-run ACA exchanges were concerned about the timing of making such a change to the automatic re-enrollment process.

“If promulgated as written the change would require the exchange to make technological code and rule changes while also absorbing a heavy administrative load, both of which create fiscal burdens with an unknown cost for the agency,” said Nevada’s Silver State Health Insurance Exchange in comments.

Another major problem is the timing of the regulation that outlines how ACA plans will be governed for the 2021 coverage year.

The regulation was published in the Federal Register on Feb. 6, and last year it was published on Jan. 24.  But the application window for qualified health plans to be offered on ACA’s exchanges starts April 23.

CMS still needs time to examine the comments and put out the final rule. Insurers and state exchanges are worried they won’t have time to absorb any final changes before the application period starts.

“CMS has compromised valuable time for issuers to prepare their product filings, and has left issuers without certainty regarding the rules that govern the market in which they are participating,” said the Pennsylvania Insurance Department.

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