Heading off Jan. 1 ACA chaos

The Obamacare transition to 2014 is likely to be chaotic for insurers and consumers using the state and federal insurance exchanges.

HHS officials announced a series of policy changes last week to ensure that everyone who signs up for private exchange coverage that is supposed to be active on Jan. 1 will be covered on that date, even if they don't pay their premium until the day before coverage begins. The moves are designed to prevent problems for consumers—and another political fiasco for the healthcare reform law—at the start of the new year.

HHS announced last week that roughly 365,000 individuals had selected plans through the state and federal exchanges in October and November. That's barely 5% of the 7 million enrollments projected by the Congressional Budget Office by the end of the open enrollment period March 31.

That undoubtedly means there will be a flood of enrollments in late December as individuals whose plans are being canceled or are currently uninsured seek coverage that will start Jan. 1. The Washington Post reported that the federal exchange had more than 50,000 enrollments in the first three days of December, although HHS hasn't confirmed that figure. Covered California reported last week that it averaged 7,100 enrollments per day during the first week of December. At that pace, more than 200,000 individuals would sign up for coverage by the end of the month.

On Thursday, HHS officials announced changes designed to ensure that everyone who signs up for a plan is actually covered on Jan. 1. For one, insurers will be required to accept payments through Dec. 31 for plans effective Jan. 1, 2014.

In addition, HHS is giving people enrolled in the Pre-existing Condition Insurance Plan—a program that was supposed to end Dec. 31—the option of extending their PCIP coverage through January. That announcement, praised by patient advocacy groups, will allow them additional time to shop for standard coverage through the exchanges.

HHS also is pressing insurers to make additional, voluntary changes. It is asking them to deem healthcare providers that have been dropped from their networks as in-network providers if they were listed as in-network during the open-enrollment period. That would address situations where subscribers sign up for a plan on the basis that their doctor is in the network only to discover later that their doctor is not included.

The federal agency also is encouraging insurers to extend the deadline for paying premiums beyond the new required federal deadline of Dec. 31, and to provide coverage to individuals who have made only partial payments. At least one firm, Aetna, which is selling plans in 16 states, has indicated a willingness to make accommodations. The company's customers will have until Jan. 8 to provide their first payment for coverage.

“The steps we're taking today will help ensure that Americans seeking quality affordable health coverage can do so with even more peace of mind and with even more confidence it will be there when they want and need it,” HHS Secretary Kathleen Sebelius said on a call with reporters Thursday announcing the changes.

But America's Health Insurance Plans, the main insurer trade group, responded warily. “With only weeks to go before coverage begins, continued change to the rules and guidance could exacerbate the challenges associated with helping consumers through the enrollment process,” AHIP President and CEO Karen Ignagni said in a written statement.

Similar accommodations were made in 2006 when problems developed during the rollout of Medicare Part D prescription drug benefit. Many seniors showed up at pharmacies and found there was no record of their coverage or the drugs they needed weren't covered by their plan. The CMS had to issue additional guidance to ensure that seniors were able to get their prescriptions filled.

The accommodations HHS is now making in response to problems with the Patient Protection and Affordable Care Act rollout are similar, said Jack Hoadley, a professor at the Georgetown University Health Policy Institute's Center on Health Insurance Reform. “In some ways doing these in December is getting ahead of the game,” he said.

With HealthCare.gov functioning relatively effectively since the administration's Dec. 1 reboot, the most pressing concern remains inaccurate, missing or duplicative 834 forms containing data on new exchange enrollees.

CMS officials and insurance industry representatives say they are working closely to eliminate as many problems as possible. At an AHIP conference last week in Washington, Jane Good, Aetna's program director for service operations technology solutions, indicated they are seeing substantial progress on that and other issues.

“We're still in the trenches,” Good said. “We're thinking happy thoughts.”

Follow Paul Demko on Twitter: @MHPDemko