Proposed changes to help stabilize the Affordable Care Act health insurance exchange markets should be enough to stop the bleeding, but further changes will likely be needed next year.
The rule (PDF), which was released a couple of months earlier than expected includes changes in 2018 to the ACA risk-adjustment program as well as changes to plan requirements.
The rule changes are a response to tumult in the exchanges as Aetna, Humana and UnitedHealth Group have all said they will be significantly scaling back their plan offerings in 2017. That and overall low enrollment from consumers has led some to question whether the exchanges can remain viable.
There have also been concerns about double-digit premium increases in some states, although the HHS released an analysis stating that coverage would still be affordable for most consumers who receive premium subsidies.
Bill Melville, an analyst at healthcare consulting firm Decision Resources Group, said that while the nearly 300-pages rule is still being digested, the insurance industry should be pleased to see the changes echo several of its recommendations from the past year.
They will be especially welcomed by smaller, regional plans that have less capital to weather uneven revenue, he said.
“I think without some of these changes it could have resulted in the death spiral we've all been on the lookout for,” Melville said.
The risk-adjustment changes are particularly key, as insurers have been saying consumers enrolling in the plans are sicker and have higher costs than expected. Risk adjustment will now factor in prescription drug data for disease such as hepatitis C, HIV/AIDS, end-stage renal disease and diabetes.
The CMS will certainly be on the lookout, however, for any evidence that the change is pushing doctors to write unnecessary prescriptions, Melville said.
Risk adjustment will also begin accounting for people who enroll outside of the open enrollment period. Insurers have said people are gaming the system by waiting until after they are sick to sign up for insurance. The Obama administration had already responded to some industry concerns by tightening the restrictions for signing up outside of open enrollment.
Elizabeth Carpenter, senior vice president at the consulting firm Avalere Health, said the administration is trying, with the little time it has left in office, to create more confidence in the exchange market. A stable market would, in turn, be good for consumers.
The next administration and Congress will likely have to make additional changes by the middle of next year to keep the exchanges afloat, such as network adequacy provisions, she said.
“The focus on the risk-management program really seems to imply that there's focus on the stability of the market right now,” she said.
Other changes in the proposed rule are focused on encouraging more young and healthy people to enroll by giving them more options for less costly plans that offer less coverage.
The CMS is proposing a standardized option, or Simple Choice plan, at the bronze level of coverage that qualifies as a high-deductible health plan that can be used with a health savings account. The rule states that high deductible plans are “an option valued by many consumers.”
Bronze plans will have to pay for only one major service before the deductible, such as primary-care visits, generic drugs or emergency room services. Preventive services will still be required to have zero cost sharing.
Melville said that while “anything you can do to make the market more attractive to the younger, healthier set is good,” the new options could raise the concerns of patient advocates worried that consumers will not understand what services aren't covered and what won't be paid for until the high deductible is reached.
“The complexity makes you wonder, is the consumer going to pick up on that or are they going to be left holding something that doesn't have a lot of value,” he said.
