By ALAN J. ORTBALS
United Healthcare will be leaving the Affordable Care Act insurance marketplace in Illinois at the end of the year, leaving seven providers participating in the Get Covered Illinois insurance exchange. The company’s Harken Health subsidiary will continue to sell health plans on the Illinois marketplace for 2017.
The announcement on May 30 came as no surprise as the company had previously told investors it planned to drastically cut its presence on the exchanges after expanding into 34 states for 2016. In April the company announced that it expected to lose $500 million this year on its exchange business.
United Healthcare sold plans in 27 Illinois counties through the Illinois insurance exchange and those Illinois members will have coverage through the end of the year.
“This change does not impact small or large group businesses or Medicare members,” said Maria Gordon-Shydlo, a company spokesperson. “Impacted individuals will need to choose new plans when the exchange opens in the fall to be sure they have coverage effective Jan. 1, 2017. Individuals will continue to have access to their current benefits through the end of 2016.”
Buying a plan on the marketplace is the only way consumers who qualify can get federal subsidies to help with the cost under the nation’s health-care law.
In June, the U.S. Department of Health and Human Services announced a series of actions to try to strengthen the Marketplace risk pool. These included changes to curb abuse of short-term plans; assist older enrollees to transition to Medicare; strengthen the rules regarding Special Enrollment Periods; and improve the process to get and keep younger, healthier people in the insurance pool.
Short-term limited duration coverage is health-care coverage issued for a short period of time and designed to fill only very short coverage gaps. Because of this, coverage is not subject to any of the key rules governing the ACA’s single risk pool: they can be priced based on health status, discriminate against consumers with pre-existing conditions, and do not have to cover essential health benefits. Some issuers have been offering short-term limited duration plans to consumers as their primary form of health coverage for periods that last nearly 12 months, allowing them to target only the healthiest consumers while avoiding consumer protections. By keeping these consumers out of the ACA single risk pool, such abuses of limited duration coverage increase costs for everyone else and they could have a greater impact over time if allowed to become more widespread.
In response, the Department of Labor, Department of Treasury, and Department of Health and Human Services issued a proposed rule to revise the definition of short-term, limited duration coverage. Under the new rules, short-term policies may be offered only for less than three months and coverage cannot be renewed at the end of the three-month period. The proposed rule also improves transparency for consumers by requiring issuers to provide notice to consumers that the coverage is not minimum essential coverage, does not satisfy the health coverage requirement of the ACA, and will not prevent the consumer from owing a tax penalty. They expect these proposed changes will help strengthen the risk pool by ensuring that short-term limited duration plans are used only as intended, to fill truly temporary gaps in coverage.
Moving older people from the individual market to Medicare has been a problem as people often don’t know that they are eligible for the senior citizen health insurance program. The Marketplace serves as a backstop for consumers as they transition between different types of coverage over their lifetime. Many early retirees access Marketplace coverage until they become eligible for Medicare when they turn 65. But once individuals turn 65, most people should end their Marketplace coverage and switch to Medicare. In fact, if consumers do not enroll in Medicare Part B when they turn 65, they could face financial consequences for years into the future because they could owe higher Medicare premiums. Meanwhile, the Marketplace is intended to serve consumers who are not Medicare eligible, and continued enrollment by individuals who are eligible for Medicare can raise costs for other consumers.
In an effort to help people make the transition and thereby remove them from the Marketplace risk pool and reduce costs, the government will start contacting enrollees as they near their 65th birthday. This outreach will provide consumers with the information they need to enroll in Medicare if they are eligible and end their Marketplace coverage if they choose to.
The Marketplace provides limited enrollment periods with the aim of preventing people from waiting until they get sick to take out insurance. Special Enrollment Periods are exceptions that allow people under special circumstances to enroll outside of the standard periods. Over the last several months, the Marketplace has taken a number of steps to ensure that Special Enrollment Periods (SEPs) are there for consumers when they need them while avoiding misuse or abuse. Changes in SEP rules make it harder for someone to take advantage. As of June 17 individuals enrolling in coverage through SEPs are being asked to provide certain documents to prove their eligibility.
Another problem has been in verifying data relative to qualifying for premium subsidies. When applicants can’t produce documentation to prove their eligibility, they sometimes are removed from the pool and lose coverage. In addition to the direct impact on consumers, avoidable terminations due to data-matching issues also negatively impact the risk pool, since younger, healthier individuals appear to be less likely to persevere through the data matching process. In fact, in 2015, younger open enrollment consumers who experienced a data matching issue were about a quarter less likely to resolve their problem than older consumers.
In response, the government has made several changes to the data matching process to help consumers avoid data matching issues in the first place and to help them resolve these issues once generated.
These changes come as the Kaiser Family Foundation released a report that projected a 10 percent increase in Obamacare premiums for 2017.
HHS, however, claims reports of premium hikes are overblown and has released a new report that claims premium changes from preliminary rate filings do not capture what Marketplace consumers actually pay. The report claims that, last year, the average cost of Marketplace coverage for people getting tax credits went from $102 to $106 per month, just a 4 percent increase, not the double-digit spike that had been reported. According to the report, averages based on proposed premium changes are not a reliable indicator of what typical consumers will actually pay because tax credits reduce the cost of coverage for the vast majority of people. Additionally, shopping gives all consumers a chance to find the best deal, and public rate review can bring down proposed increases.
“Our analysis highlights how different the premiums that people actually pay are from the rates that are initially proposed by issuers,” Richard Frank, assistant secretary for Planning and Evaluation at the U.S. Department of Health and Human Services said. “Consumers’ actual health insurance premiums depend on whether they shop around for the best deal and the availability of tax credits that lower premium costs, both of which changed the picture dramatically in 2016.”