The options in HHS' proposal include a reduction in the reinsurance tax for individual plans sold on the exchanges if they can show they treat patients with higher-than-expected medical costs. The ACA levies a tax on all insurance plans to pay for reinsurance of individual plans sold on the exchanges.
The proposals were included in a wide-ranging rule that also outlines standards for the ACA's premium stabilization programs, the advance payment of premium tax credits and other measures.
The proposal justified the changes by noting that health insurance companies that developed plans for the exchanges established premiums with the expectation that all payers would be working with one risk pool. “An increase in expected claims costs could lead to unexpected losses,” according to the proposed rule.
If most of the people with canceled plans decide to keep those policies and exit the exchange risks polls, insurers offering plans on the exchanges are likely to be left with older and sicker patients whose costs will outstrip the amount collected from those beneficiaries. “If lower health risk individuals remain in a separate risk pool, the transitional policy could increase an issuer's average expected claims cost for plans that comply with the 2014 market rules,” the rule says.
So far, few insurers plan to actually renew the plans. In the wake of Obama's announcement, many warned that his about-face could destabilize the risk pool.
The proposed rule's release follows previously announced plans to push back the start of open enrollment on the exchanges for 2015 by one month to Nov. 15. The move was designed to give insurers more time to analyze the pool of exchange enrollees and set rates for 2015.
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