Attempts by the CMS to limit the use of special enrollment periods to obtain exchange coverage do not go far enough to ensure that the circumstances won't be abused by those seeking to game the system, according to health plan critics.
In May, the CMS issued an interim final rule (PDF) which stated that as of July 11 there will be only six circumstances in which a person can buy coverage outside of open enrollment: losing other health coverage; changes in household size due to marriage or birth; moving to a new home; changes in eligibility for financial assistance; errors made by marketplaces or health plans; and cases of moving between Medicaid and the marketplace or leaving Americorps coverage, according to the CMS.
Plans remain concerned about some cracks in the rulemaking, which they say bad actors attempting to game the system could slide through. For instance, the interim rule requires proof from an individual that they qualify for one of the six circumstances to obtain coverage outside of open enrollment. However, consumers can simultaneously enroll in coverage while supporting documents are being reviewed.
“Without requiring upfront documentation, individuals can purchase health insurance when they need medical care and obtain care in the weeks or months prior to verification” of their special enrollment eligibility, said Kris Haltmeyer, vice president of health policy and analysis for the Blue Cross Blue and Shield Association, a national federation of 36 plans, in a comment letter to CMS.
Plans would rather see coverage start once it's verified that the consumer is eligible to gain coverage via a special enrollment.
“This approach would limit financial exposure that can arise for consumers if they enroll, pay their premium, access services, and then are subsequently canceled for lack of documentation,” Heather Kanem, CEO of the public exchange marketplace at UnitedHealthcare, said in a comment.
The rule also stated that an individual had to be enrolled in coverage for at least one day during the previous 60 days.
Since the launch of the federal and state marketplaces in 2014, consumers have been able to gain coverage outside of open enrollment if they relocated, regardless of whether they had coverage on the marketplace before they moved.
There are some exceptions in the interim rule, such as individuals who move to the U.S. from outside the country or from a U.S. territory, since there was no way they would have had exchange coverage where they previously lived. Health plans want to make sure these individuals submit proof that they are indeed currently living in the U. S., such as a utility bill or lease agreement.
“We believe such requirements could help deter incidences of medical tourism, where individuals move to the United States and claim residency in a state solely to obtain coverage to receive care,” David Schwartz, head of global policy at Cigna Federal Affairs, said in a comment.
The rulemaking was meant to address concerns by the America's Health Insurance Plans and major insurers, which claimed that people gaining coverage via special enrollment have higher medical claims and may be gaming the system by enrolling only when they need care.
In the first two years of the exchanges, up to one-third of enrollees gained coverage through special enrollment periods, according to Haltmeyer of the Blues association.
Moreover, these enrollees typically incur higher costs than those who gain coverage during the standard open enrollment period. The actuarial firm Oliver Wyman found that individuals obtaining coverage through special enrollment periods amassed 24% more in healthcare costs during their first three months of coverage in 2014 compared with those coming in during the standard enrollment period.